(Yicai Global) April 10 -- Swedish power lithium-ion battery supplier Northvolt signed a raw material supply agreement with China’s Kedali Industry to ensure the supply of key production raw material at the Swedish company's super lithium-ion battery plant in the north of the Nordic nation that will start operation next year.

This is the second deal with a Chinese battery accessory maker the Swedish fire has signed in less than one month.

Kedali will exclusively provide it's production line for lithium-ion batteries with square battery cases, per a statement the Chinese battery parts supplier issued today.

The Shenzhen-based company will set up a wholly-owned local unit to take charge of the project's implementation. The two agreed that the subsidiary will rent a work area in the 40-gig await annual capacity power lithium-ion battery plant Northvolt is building in Skellefteå to make the containers, per the statement.

Kedali will supply all lithium-ion battery cases the Skellefteå plant needs for its production, and the firm’s Swedish factory must provide all its output to Northvolt, the statement added, but omitted details as to financial arrangements, merely mentioning that the supply price will be jointly fixed based on a transparent cost+profit model.

Chinese lithium-ion battery diaphragm supplier Shenzhen Senior Technology Material also signed a contract with Northvolt, the Chinese supplier announced last month. It will invest in and build a plant in Sweden to make lithium-ion battery diaphragms and accessories, prioritizing supply of these products to Northvolt, with the firm's plants in China to take charge of the supply before the Swedish facility is completed, per the announcement.

The Skellefteå factory is expected to start mass production in 2021, and have a total annual lithium-ion battery capacity of 32 GWh in the initial post-construction phase, with that figure eventually growing to 40GWh, per the plan. Northvolt and Germany’s Volkswagen Group established a joint venture last year to build a lithium-ion battery complex with an annual output of 16GWh, which will start mass production in 2024 in Germany.

Siemens, BMW, Vattenfall, Vestas Wind Systems, Asea Brown Boveri and other leading European firms are also Northvolt partners in electric vehicles and energy storage.

Kedali’s shares [SHE:002580] closed 2.10 percent down at CNY5.14, bouncing back from a three percent-plus decline in the morning. All major indexes declined sharply today.

Editor: Ben Armour