Japan's Sumitomo Metal Mining Co said on Tuesday it would spend 47-billion yen ($424-million) to boost production capacity of cathode materials for rechargeable batteries used in electric vehicles (EVs) to meet burgeoning demand.
Japan's biggest nickel smelter will build a new plant of nickel-based cathode materials in Besshi, Ehime prefecture in western Japan, and expand production capacity of precursor material at its Harima refinery in Hyogo prefecture in western Japan, with an aim to complete the work in 2025.
Out of the 47-billion yen spending, 40-billion yen will go to the new plant and the remainder will be used in Harima.
Nickel is a key component of the lithium-ion rechargeable batteries used to power EVs, sales of which are expected to soar in coming years as the world moves towards a low-carbon future.
Sumitomo Metal, which supplies nickel-based cathode materials for Panasonic's lithium ion batteries that are used in Tesla EVs, aims to boost its capacity of cathode materials to about 7 000 t/m in 2025 from about 5 000 t/m now, a company spokesman said.
The company has said it aims to increase its production capacity of cathode materials to 10 000 t/m in 2027.
"We see signs of greatly expanded demand for our nickel-based products," the company said in a statement.