Posco Chemical said Monday it will invest 217.7 billion won ($178 million) to produce key materials for electric vehicle batteries.

According to the company, its board of directors has approved the investment to construct a production facility for synthetic graphite anode for EV batteries.

“Demand for synthetic graphite anodes for EV batteries is expected to spike as the market size is expected to grow from 194 GWh in 2020 to 3,066 GWh in 2030. It’s essential to be equipped with production capacity to prepare for the future,” a Posco Chemical official said.

Posco Chemical’s new facility will be built on a 78,535 square-meter plot inside Pohang Blue Valley National Industrial Complex in North Gyeongbuk Province with annual capacity of 16,000 metric tons of anodes, which can supply for 360,000 EV batteries of 50kWh.

The construction will begin this year and the target completion date is 2023.

Synthetic graphite anodes have more consistency than natural graphite anodes as they are artificially designed and have more stability, being -- processed at much higher temperature,” the Posco Chemical official said.

Also, synthetic graphite anodes have advantage in EV batteries as they last longer and are capable of rapid charging.

Anode is one of the four main parts of a lithium-ion battery including cathode, electrolyte and separator.

By Kim Byung-wook (kbw@heraldcorp.com)