ANEGASAKI, Japan (Reuters) - Japan's No.2 oil refiner, Idemitsu Kosan ( IDKOF ) plans to build a large-scale plant for lithium sulphide, a key material for all-solid-state batteries, at its Chiba refinery, near Tokyo, the company said on Thursday.

Automakers and battery suppliers worldwide are racing to develop solid-state batteries, touted as crucial for longer-lasting, safer, and more affordable EVs amid slowing EV growth.

The project builds on Idemitsu's partnership with Toyota Motor ( TM ) to commercialise next generation batteries and support the automaker's goal of launching electric vehicles with all-solid-state batteries by 2027-2028.

Toyota ( TM ) aims to introduce the batteries to drastically improve the driving range of EVs. Solid-state batteries also offer shorter charging times than traditional lithium-ion packs.

Idemitsu plans to complete the new plant by June 2027, with an estimated cost of 21.3 billion yen ($143 million).

The facility will have a production capacity of 1,000 metric tons of lithium sulphide annually - enough to supply solid electrolyte for 50,000-60,000 EVs, Idemitsu Executive Officer Tetsuji Mishina told reporters at the Chiba refinery.

Idemitsu plans to make a final investment decision on building a large-scale pilot factory for solid electrolyte, a key ingredient for solid-state batteries, in the fiscal year 2025, which ends in March 2026, Mishina said.

It is also seeking stable lithium supplies from Australia and other overseas sources.

"A major challenge for global adoption of solid-state batteries is lowering solid electrolyte costs," Mishina said, with the aim to reduce costs so they match those of liquid lithium-ion batteries.

Idemitsu plans to supply solid electrolyte to Toyota ( TM ) first, expanding to other customers later. The company is currently developing two different types of solid electrolyte, Mishina said.

($1 = 149.3200 yen)