Posco Chemical Co., the refractory and secondary battery materials arm of South Korea’s steel giant Posco, will invest 217.7 billion won ($181.4 million) to build an artificial graphite anode material factory in Korea, as part of localization efforts for key materials used in electric vehicle batteries.

Posco Chemical announced Thursday it broke ground for the synthetic graphite anode material production facilities capable of producing 16,000 tons per year on a space of 78,535 square meters in Pohang, South Gyeongsang Province.

The company plans to complete the construction by 2023. Once completed, the annual capacity is enough to manufacture 60 kwh high-performing batteries for 420,000 electric cars.

Anode material is a core material in making a secondary battery, and most of lithium-ion batteries use graphite as key material. Graphite materials are either synthetically produced or naturally mined from the ground.

Artificial graphite anodes stand out in structural uniformity and stability due to high-pressure crystallization and they contribute to high performance battery features like longer battery life and rapid charging.

Korean battery makers have so far relied entirely on imports for artificial graphite supply.

The ground-breaking ceremony was held in the presence of Posco CEO Choi Jeong-woo, Posco Chemical CEO Min Kyung-jun, Pohang City Mayor Lee Kang-deok and Kim Myung-hwan, president of LG Chem’s battery R&D unit.

Posco Chemical shares rose 0.91 percent to close Friday at 77,400 won in Seoul.

By Won Ho-sup and Lee Ha-yeon

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