Galaxy considering lithium-ion battery plant

Lithium company Galaxy Resources (ASX:GXY) is evaluating the creation of a lithium-ion battery production division, while preparing for a dual-listing in Hong Kong

Lithium company Galaxy Resources (ASX:GXY) saw its shares spike eight per cent today, after it revealed it is considering establishing a lithium-ion battery manufacturing plant.

The company is evaluating opening a factory in the Jiangsu Zhangilagang High Technology Park in China, and has already signed an MoU for the supply of turn-key equipment for the plant.

The venture would initially concentrate on the development of rechargeable battery packs for battery-powered electronic bicycles, or e-bikes, which are proving increasingly popular in developing markets including China.

But it would also serve as a vehicle for further investments in the lithium-ion battery manufacturing industry.

Lithium-ion batteries are used in consumer electronics devices ranging from mobile phones to laptops to cameras.

Galaxy is meanwhile pursuing a secondary listing on the Hong Kong stock exchange, and expects to complete the process in the first quarter of calendar 2011.

The company has appointed Morgan Stanley and BNP Paribas as joint bookrunners for the proposed listing.

“The dual listing will afford Galaxy greater access to capital sources, significantly improve liquidity and provider greater alignment between our investor- and customer-base,” Galaxy managing director Iggy Tan said.

Between the listing and the new manufacturing plant, the company aims to become a vertically integrated lithium producer. Operations will be split into three separate divisions - resources, chemicals and battery manufacturing.

GXY shares jumped 8.22 per cent during Thursday's trading period to $1.580.

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