Posco Chemical Co., a South Korean manufacturer of industrial materials, said Wednesday it has begun construction of its second factory for synthetic graphite anode materials in the country's southeast.

Posco Chemical broke ground on the plant at its key manufacturing complex in Pohang, 272 kilometers southeast of Seoul, on Tuesday, the company said in a release.

The construction is part of a plan to boost the production capacity of the key anode materials to 18,000 tons a year by the time the second factory is established in the second half of next year. The amount is enough to power 470,000 electric vehicles (EVs) with a maximum power of 60 kilowatt hours.

Anodes are one of the key components for EV batteries that determine the battery life span, charging speed and energy density.

Anodes made with synthetic graphite, the most widely used type, tout stability as they are manufactured at a high temperature that makes the EV battery more durable and faster to charge.

Posco Chemical completed the construction of the 8,000-ton phase 1 synthetic graphite anode plant in December 2021, becoming the first South Korean company to have succeeded in the localization of the material highly dependent on China.

Posco Chemical has been accelerating the push for EV battery material production as a company that produces both cathodes and anodes.

Posco Chemical clinched a 939.3 billion-won ($763.1 million) deal to supply artificial graphite to Ultium Cells LLC, the U.S.-based joint venture between South Korea's LG Energy Solution Ltd. and General Motors Co., for six years beginning this year.

It has bagged two other supply deals, worth a total $17.8 billion, to provide cathode materials to GM.

Posco Chemical said it plans to expand the global production capacity of anode materials to 320,000 tons by 2030 from the current 82,000 tons. (Yonhap)