(Yicai Global) Dec. 10 -- Shares of CNGR Advanced Material jumped after the Chinese precursor supplier said it plans to spend CNY10 billion (USD1.6 billion) building a plant to expand its lithium battery materials capacity.

CNGR’s stock price [SHE: 300919] finished today 2.9 percent up at CNY176.78 (USD27.75), after earlier gaining as much as 4.2 percent.

The new plant will be built in phases in Kaiyang, a county in China’s southwestern Guizhou province, and will have the capacity to produce 200,000 tons of lithium iron phosphate and upstream materials a year, the Hunan province-based firm said late yesterday. Construction is expected to take 33 months.

The supply of lithium iron phosphate is becoming tight as battery manufacturers are more inclined to make lithium iron phosphate batteries, CNGR said, adding that it is necessary to expand the firm’s business scope in this field to fully meet the demand for diversified materials.

CNGR will also build units for upstream phosphate mining, iron phosphate, and multiple phosphorus chemical by-products, it said.

CNGR also announced on Nov. 30 that it plans to team up with Easpring Material Technology to jointly build a lithium iron phosphate and upstream materials production plant  in Guizhou with annual output of 300,000 tons.

Editor: Futura Costaglione