AsianFin -- Contemporary Amperex Technology will make a 1.5 billion yuan (USD211 million) upfront payment to Jiangxi Shenghua New Materials, in which it is a top shareholder alongside Fulin Precision, to secure supplies of lithium iron phosphate cathodes and other key battery materials.

CATL will provide Shenghua with 500 million yuan (USD70.3 million) this month and 1 billion yuan in November to finance new production lines for LFP cathodes and other battery materials, which will later be supplied exclusively to the Chinese battery giant, Fulin Precision said yesterday. Shenghua will repay CATL through product deliveries within three months from next March.

The advance will enable CATL to lock in the supply of LFP cathodes and help Shenghua complete the construction of new production lines for LFP cathodes and its raw materials as scheduled, Fulin Precision pointed out, adding that if the project goes well, it will help Shenghua increase its production capacity for LFP cathodes and boost sales.

Shares of Fulin Precision [SHE: 300432], an auto parts and cathode materials producer, finished 3 percent higher at 16.35 yuan (USD2.30) apiece in Shenzhen today, while battery giant CATL gained 0.4 percent to close at 368.49 yuan (USD51.81).