Chinese battery cathode producer Hunan Yuneng plans to invest 982 million yuan ($135.5 million) to build a 50,000 tonne per year lithium iron phosphate (LFP) production plant in Spain's Extremadura region.

The company aims to complete construction of the new facility within 15 months after obtaining regulatory approval. Yuneng will establish a subsidiary, Yuneng International (Spain) New Energy Battery Material, to develop this project.

Yuneng stated that this investment is intended to strengthen the company's position in the global market and meet growing demand for LFP cathodes from overseas consumers, particularly in Europe, driven by the development of new energy vehicles outside of China. 

In 2023, Yuneng produced 504,400 tonnes of LFP cathodes, up 50% year-on-year, with sales also rising 56% to 506,800 tonnes over the same period. The company has achieved an LFP production capacity of 700,000 tonnes per year as of the end of 2023. 

Yuneng is also expanding capacity for another emerging battery cathode material, lithium manganese iron phosphate, which offers higher energy density, better winter performance, and lower manufacturing costs compared to LFP.