(Yicai Global) Oct. 23 -- Guangdong Weihua’s share price jumped over 6 percent this morning after it announced a plan to invest CNY1.2 billion (USD 180 million) to build a lithium hydroxide production facility to meet rising demand from the electric vehicle industry.

The new facility in Shehong in southwestern Sichuan province is designed to turn out 30,000 tons of lithium hydroxide annually.
Weihua's shares [SHE:002240] had shot up by 6.17 percent to CNY12.73 (USD1.91) at 11.00 a.m. on the news.

The project’s first phase, which will have an annual production capacity of 20,000 tons and is expected to cost CNY850 million (USD127.5 million), is set to start construction by year’s end, the company added, but without specifying a date for it to start running.

Shenzhen based Weihua currently operates a 40,000-ton-per-year lithium salt facility in Deyang Sichuan province. Its products include battery grade lithium carbonate, lithium hydroxide monohydrate and lithium chloride.

The Deyang facility operator signed a two-year lithium hydroxide supply deal in August with Seoul-based LG Chemical, one of the world’s biggest makers of lithium-ion batteries, with 1,500 metric tons to be shipped before the end of the year.

LG Chem’s new factory in Nanjing in eastern Jiangsu province started mass producing lithium-ion cells earlier this year.

Editor: Ben Armour