South Korean steelmaker Posco has announced plans to builds a lithium-ion cathode plant in the southern port city of Gwangyang, as it looks to meet growing global demand for rechargeable batteries for various applications including automotive.

The company has acquired a 50,000-square-meter site in the Gwangyang Bay Free Economic Zone, where it will build a facility with an initial capacity to produce 6,000 metric tons of cathode material per year.

The initial phase is scheduled to be completed in 2019, but a second phase of expansion will see capacity increased by 50,000 tons per year by 2022, giving the company an overall lithium-ion cathode material production capacity of 62,000 tons per year.

Posco will also build a 30,000-ton lithium-processing plant at this site and a 20,000-ton nickelprocessing facility.

The company's board last week approved an increase in the capital of its battery component making subsidy, Posco ESM, of KRW113bn (US$105m).

South Korea's upstream energy and industrial companies are positioning for capacity boosts in key battery technologies as demand for products such as automotive powertrain batteries grows sharply over the next five years.