CATL's joint venture with Guangdong Jiayuan will build projects with an annual capacity of 100,000 tons of high-performance copper foil.

(Image credit: Guangdong Jiayuan Technology)

In addition to partnering with downstream carmakers, Chinese power battery giant Contemporary Amperex Technology Co Ltd (CATL) is also working with upstream raw material suppliers.

Shanghai-listed Guangdong Jiayuan Technology said in a statement Wednesday that it has signed a memorandum of understanding with CATL (SHE: 300750) to set up a joint venture to build projects with an annual capacity of 100,000 tons of high-performance copper foil.

The joint venture will have an initial registered capital of RMB 500 million ($79 million), with Jiayuan contributing RMB 400 million and CATL contributing RMB 100 million. The total capital can be increased to RMB 2 billion in the future, depending on the project construction needs.

The planned project will be built in two phases, with the first phase having an annual capacity of 50,000 tons, which will be realized within 33 months from the date of completion of the first registered capital payment.

Its second phase will have an annual capacity of 50,000 tons, with a start and completion date to be determined. The site for the projects is yet to be determined.

Jiayuan is one of the world's largest suppliers of thin copper foil, with a share of more than 30 percent of the market for electrolytic copper foil for lithium-ion power batteries in China.

Previously Jiayuan was not only a supplier to CATL, but also supplied products to a number of other power battery manufacturers including BYD.

All products produced by Jiayuan's joint venture with CATL will be supplied to the latter on a priority basis, the statement said, implying that CATL has locked in 100,000 tons of copper foil capacity per year in the future.