(Yicai Global) July 21 -- Ganfeng Lithium’s shares fell after the Chinese battery materials supplier said the first phase of a previously announced plan to build a factory that will make 20 gigawatt hours of lithium batteries a year will cost CNY6 billion (USD834 million).

Ganfeng Lithium [SHE: 002460] finished 2.5 percent lower at CNY58.44 (USD8.14) a share in Shenzhen today, after falling by as much as 3.3 percent at one time. The benchmark Shenzhen Component Index ended little changed.

Jiangxi Ganfeng Lithium Battery Technology, in which Ganfeng Lithium has a 65.5 percent stake, will build the first phase of the plant in Tumed Left Banner, a county-level division in Hohhot, the capital of China’s Inner Mongolia Autonomous Region, the Xinyu-based firm said yesterday. Construction will begin this month and end by December next year, it added.

Gannfeng Lithium has been expanding into lithium battery production since last year. Between January and May, the company said it intended to build plants in Chongqing, Dongguan, Suzhou, and Xiangyang. The firm unveiled plans for the Hohhot project in April.

The project will be built in two phases, each with an annual capacity of 10 GWh, it added. According to an announcement by the Hohhot government at that time, the company will invest CNY10 billion (US1.4 billion) in the project.

In addition to the plant, Ganfeng Lithium will also build a battery check and safety testing center and other supporting facilities, the firm added yesterday, noting that building work on the second phase will depend on the demand situation.

Editor: Futura Costaglione