The plant will produce cathode active material, a key component in lithium-ion batteries used in electric vehicles and for energy storage, said Easpring Finland New Materials, a company co-owned by Finnish Minerals Group and Beijing Easpring Material Technology.

It said the investment was worth 800 million euros ($868 million).

The announcement came one week after a bankruptcy filing by Swedish battery maker Northvolt, which had planned to develop cathode production but dropped those plans to focus on battery cell production as it fought for survival.

Easpring Finland New Materials said commercial production was expected to begin in 2027.

The plant, to be located in Kotka in southeast Finland, will initially produce 60,000 tonnes of cathode active material annually.

At full production capacity, it could supply cathode material for the production of around 750,000 electric vehicles annually, the company said.

Matti Hietanen, the chief executive of Finnish Minerals Group, said the investment created an "entirely new kind of industry in Finland related to the production of lithium-ion batteries" and represented a European "spearhead project for the industry."

The new plant will employ 270 people and an area of around 80 hectares had been reserved for its construction.