(Yicai Global) March 29 -- Shares of Senior Technology Material jumped after the Chinese producer of lithium battery materials announced a CNY3.34 billion (USD509.4 million) long-term supply deal with Swedish power cell startup Northvolt.

Senior Technology [SHE:300568] closed up 6.1 percent today at CNY28 (USD4.30). The stock had climbed as much as 7.4 percent earlier in the day.

Under their agreement, Senior Technology will supply Northvolt for six years, the Shenzhen-based company said in a statement on March 26. It did not disclose further financial details.

Senior Technology will supply Northvolt’s plants in Germany and Sweden, according to a partnership agreement they sealed last March. The Swedish facility is expected to begin mass production this year, and the German plant in 2024.

To meet demand, Senior Technology said last September that it would invest CNY2 billion to build production bases in Sweden and Germany, with output due to begin between 2023 and 2025. 

The bases will meet over half of Northvolt’s demand for separators and major accessories. The first phase of the Swedish site is scheduled to be completed and put into operation next year. Senior Technology’s plant in the eastern Chinese city of Changzhou will supply customers until then.

Founded in 2003, Senior Technology’s notable clients include South Korea’s LG Electronics. Northvolt, set up in 2016, is becoming a major power cell supplier in Europe, with the backing of Goldman Sachs, European Investment Bank, Volkswagen, BMW and others.

Overseas media reported earlier this month that Northvolt would sign a more than USD14 billion contract to supply power batteries to Volkswagen for 10 years.

Editor: Peter Thomas