(Yicai Global) Jan. 17 -- Shares of China's Fengyuan Chemical, which counts BYD and battery maker Guangzhou Great Power Energy & Technology as some of its clients, hit the daily limit-up after the chemical manufacturer revealed its second expansion plan of battery materials in less than two months.

Fengyuan's stock price [SHE: 002805] jumped by 10 percent to CNY34.56 (USD5.50) intraday. The shares have more than doubled in value over the past 12 months.

The oxalic acid producer will construct a facility in southwestern China's Yunnan province to make 200,000 tons of cathodes per year, the Shandong province-based firm said in a statement yesterday, without disclosing the scale of investment.

China's rapidly growing electric vehicle demand has driven that of battery raw materials. Before the latest three projects announced or kicked off since last November, Fengyuan’s total annual output of cathode materials was only 25,000 tons, including 15,000 tons of ternary cathode materials and 10,000 tons of lithium iron phosphate, according to its website.

Besides lithium iron phosphate, the plant in Yunnan province should produce 1,000 tons of lithium clay per year. The project includes a lithium technology research institute.

The latest project will be built in three phases. The first phase should require an investment of CNY1 billion (USD157.5 million). After construction begins in March, an annual capacity of 50,000 tons of lithium iron phosphate should be reached by December 2023.

The firm is quickly increasing its output. Last November, Fengyuan said it will invest CNY3 billion to build a lithium iron phosphate plant in its home town Zaozhuang. The facility that should make 75,000 tons of such battery material is planned to be ready within 24 months.

In November 2021, Fengyuan started building another new lithium iron phosphate project. The plan was to spend CNY920 million (USD144.9 million) to produce 50,000 tons of the material in Anhui province's Anqing.

Editor: Emmi Laine, Xiao Yi