LG Chem Ltd., South Korea's leading chemical materials producer, said Tuesday it will build a new factory in South Korea to produce high-nickel cathode materials for electric vehicle (EV) batteries as it further pushes to upgrade the key battery component materials.

The construction for the new cathode plant broke ground on the 60,000-square-meter site in Gumi, an industrial city located about 260 kilometers southeast of Seoul, the company said.

Cathode is a key component that determines the capacity and average voltage of a lithium-ion battery.

The company will spend about 500 billion won ($418.8 million) to secure an annual production capacity of 60,000 tons by 2025, enough to make batteries for some 500,000 EVs, it said.

The new factory will primarily produce cathode materials with nickel, cobalt, manganese and aluminum, more commonly known as NCMA cathode, which LG Chem has been focusing on its next-generation product.

LG Chem's NCMA cathode features 90 percent nickel content, enabling higher energy density and strengthening safety.

LG Chem is pushing to expand its global cathode production by 260,000 tons a year by 2026, from the current 80,000 tons. It is also developing technologies to make cobalt-free EV batteries in order to reduce price fluctuation and single crystal cathodes for all solid-state EV batteries. (Yonhap)