The site, some 100 kilometres southwest from the capital Oslo, will become a headquarters for Elkem's Northern Recharge project, which aims to produce graphite for emerging battery markets. A final investment decision on the plant is expected by 2021.

"The production of battery materials represents one of Elkem's biggest growth opportunities," said chief executive Michael Koenig.

"The demand for batteries is surging, as a result of the rapid growth of electrification in transport and increasing need for energy storage in a sustainable future. This requires new production capacity for battery materials, and we see significant opportunities for a specialised product with a green footprint," said Koenig.

Elkem plans to leverage the company's expertise in carbon-based materials while targeting the battery sector.

"This is a massive opportunity, a fast-growing market where we can use our heritage from being one of the world leaders when it comes to high-temperature processes, and making these efficient," Inge Grubben-Strømnes, head of carbon, told a company podcast.

"If we combine that with our more than 100 years of experience in carbon materials, then we stand a good chance." 

The plant decision comes after Elkem invested NOK65 million (US$5.5 million) in a pilot plant for battery graphite in its industrial site at Fiskå, Kristiansand, in June 2019.