Shanghai (ZXZC)- On Sept. 13, Chinese power battery giant CATL signed a cooperation agreement with Yichun Municipal Government to build a lithium-ion battery manufacturing base in the city of China's Jiangxi province, the company announced via its WeChat account.

CATL, Yichun Minicipal Government signing agreement; photo credit: CATL

Under the agreement, the production base will cover an area of 1,300 mu (about 867,000 square meters) and involve a total investment of around 13.5 billion yuan ($2.094 billion). The construction is expected to be completed within 30 months.

CATL said the investment is made to further improve its development of production capacity and meet the demands of future business development and market expansion. It is of important significance to the company's long-run and stable development and is in line with the interests of all shareholders despite the increase in capital expenditure and cash outlay.

The pact was signed after CATL inked a framework cooperation agreement with Jiangxi Provincial Government and Yichun Municipal Government at the end of July. According to the earlier agreement, the battery giant planned to build a lithium-ion battery manufacturing base and a production base for relevant upstream materials like lithium carbonate at Yichun Economic & Technological Development Zone and related counties, cities, and districts.

Notably, Gotion High-Tech, another main automotive lithium-ion power battery supplier in China, celebrated in late May the foundation stone-laying ceremony for its lithium-ion battery project in Yichun, which is scheduled to go into operation at the end of 2022.