BUCHAREST- Canada's Rock Tech Lithium could invest 400 million euros ($436.16 million) to build its second European lithium converter and refinery in Romania, the state's energy ministry and the company said on Monday.

The company, which aims to start construction of its first European facility in Germany in April, plans a second site in Romania.

On Monday, it signed a memorandum of understanding with Romania’s energy ministry.

"We're very happy the government is granting us support for our project here," chairman Dirk Harbecke told reporters in capital Bucharest.

Harbecke said the plant would generate some 700 direct and indirect jobs and produce enough to supply 500,000 cars with lithium-ion batteries per year. He did not say when a decision would be taken to go ahead with the Romanian plant.

Carmakers and battery cell players, including Volkswagen and China's CATL, as well as Tesla, are expanding production capacity in Germany, Europe's top economy, as they bank on an expected mass roll-out of electric vehicles.

"With this plant, Romania could be put on the map of battery producers, and lay ... the groundwork for building up this industry here," Romanian Energy Minister Virgil Popescu said, adding Romania can grant state aid to battery investors under its EU-funded recovery and resilience package.

($1 = 0.9171 euros)

(Reporting by Luiza Ilie; Editing by Barbara Lewis)