By Daewoung Kim and Hongji Kim

HWASEONG, South Korea (Reuters) - A powerful explosion set on fire a lithium battery factory in South Korea on Monday, killing 22 workers, most of them Chinese nationals, local fire officials said.

The fire, which has largely been extinguished, ripped through a factory run by battery manufacturer Aricell in Hwaseong, a major industrial cluster about 90 minutes southwest of the capital Seoul.

Eighteen Chinese workers and one Laotian were among the dead. The nationality of the remaining deceased worker was not yet confirmed, Kim Jin-young, a local fire official, told reporters, citing information from company officials.

The blaze began at 10:31 a.m. (0131 GMT) after a series of battery cells exploded inside a warehouse with some 35,000 units, Kim said. What had triggered the explosion remains unclear, he added.

A Reuters witness saw firefighters moving up to six bodies out of the factory. Due to the intensity of the blaze, rescuers were finding it difficult to identify the dead, Kim added.

Two people were being treated for major burns, officials at the scene said.

Live TV footage showed firefighters spraying the damaged steel and concrete building. Parts of the upper level had collapsed, and large chunks of the building looked like they had been blown out into the street by an explosion. Aerial footage showed massive smoke clouds billowing from the structure.

Kim Jae-ho, Fire and Disaster Prevention professor at Daejeon University, said the fire had probably spread too quickly for workers to escape.

"Battery materials such as nickel are easily flammable," he said. "So often, there is not enough time to respond, compared to a fire caused by other materials."

President Yoon Suk Yeol was monitoring the situation, his office said, while Interior Minister Lee Sang-min called on the local authorities to take steps to prevent any hazardous chemicals from contaminating the surroundings.

Established in 2020, Aricell makes lithium primary batteries for sensors and radio communication devices. It has 48 employees, according to its latest regulatory filing and its Linkedin profile.

Calls to Aricell offices were unanswered.

The company is not listed on South Korea's stock market but is majority owned by S-Connect, according to Aricell regulatory filing. S-Connect is registered on the junior Kosdaq index and its shares closed down 22.5%.

South Korea, a major industrial economy, has made efforts to improve its safety record after several past accidents, many of which have been blamed on negligence.