(Yicai Global) Nov. 4 -- Shares in Leary New Material Technology jumped today, before receding as investors cashed in, after the Chinese functional coating film material maker said that it is linking arms with electrolytic aluminum supplier Henan Sunho Group to build a facility that produces the carbon-coated aluminum foil used in electric car batteries to meet surging demand.

Leary New Material’s share price [SHS:688683] was trading up 0.4 percent at CNY24 (USD3.30) as of 1.20 p.m. China time today. Earlier it soared 5.4 percent to CNY25.18.

Leary New Material and Sunho will invest up to CNY500 million (USD68.6 million) to build a plant next to Sunho’s existing aluminum foil factory in central Henan province, Leary New Material said yesterday, citing the agreement inked between the two parties.

The facility, which will be run by a joint venture between the two companies, will produce 60,000 tons of fine carbon-coated aluminum foil a year, the Foshan, southern Guangdong province-based company said. The first phase of construction should be completed by June next year. No further details on the equipment installment timetable nor on the two parties’ shareholding ratios in the JV were given.

Carbon-coated aluminum foil adds a uniform layer of nanometer-level conductive graphite on the surface of conventional aluminum foil, which can hugely improve lithium cells’ performance and greatly lower the production costs of batteries at the same time, it said.

The partnership with Shangqiu-based Sunho will greatly boost Leary New Material’s carbon-coated foil capacity, guarantee the steady supply of raw materials and ensure the stable quality of its products, Leary New Material added.

Sunho’s Henan plant has a yearly output of 50,000 tons of aluminum foil. The second phase, which will increase annual capacity by 60,000 tons, should start construction soon, it added.

Editor: Kim Taylor