China's top lithium battery manufacturer Sunwoda Electronic said Dec. 8 it would invest a minimum Yuan 16.5 billion ($2.4 billion) to build a 50,000 mt/year lithium carbonate project in the Yichun city of Jiangxi province that would allow the company to secure supply of upstream resources and lower its production costs.
A 50 GWh recycling and a 300,000 mt/year cathode materials project will also be built as part of the project, it added.
China wants to make the transition towards renewable energy a success, seeing the surge in EV demand in the country. Chinese firms are racing against time to lock in lithium supplies to meet the rising EV demand.
Sunwoda said it will establish a joint venture with municipal state-owned Yichun Mining to explore mines that were under the control of Yichun Mining.
Yichun will also form a joint venture with Sunwoda to establish lithium salts and cathode materials projects, with respective shareholding ratios of 35% and 65% in the two projects.
According to data released by the China Automotive Battery Innovation Alliance, Sunwoda's power battery loading volume in the first 10 months of this year was 5.5 GWh, with a market share of 2.5% in the same period.
The city of Yichun has large reserves of lepidolite, a raw material used to extract lithium. The city has been attracting market attention as a tight supply of lithium salts and high prices keep rattling lithium markets.
Yichun is projected to have lithium oxide reserves of 2.58 million mt, or 23.6% of the national total, the state-run Jiangxi Daily reported.
A series of measures have been issued in east China's Jiangxi province to strengthen its leading position in the new energy industry and promote the development of its lithium industrial chain.
The province vowed to provide significant support for key projects such as cathode, next-generation anode materials, and power battery projects for land use, energy use, electricity use, and gas use.
Expanding Lithium Production
China's lithium chemicals output is likely to increase in 2023, which may help alleviate the tight supply situation this year to some degree and put pressure on domestic prices, several sources said.
Propelled by sky-high lithium chemical prices coupled with strong demand, Chinese lithium converters began to broaden production or mount new projects from 2021.
China's second-largest lithium chemical producer, Tianqi Lithium, said Dec. 7 that the first phase of its lithium hydroxide project in Kwinana, Australia, with a capacity of 24,000 mt/year, has attained commercial production ability since Nov. 30.
Lithium chemical producers help change the material that holds lithium forms into lithium carbonate or hydroxide, which are far more refined versions of the material that are used to assemble the batteries that power electric vehicles.
China’s lithium carbonate prices should receive some support ahead of China’s New Year holidays at the end of January, as production will fall to some extent due to maintenance and cold weather factors, sources said.
Lithium prices have declined over the past two weeks as buyers have nearly completed stocking, while previous peak prices also led to suppressed buying activities.
Battery-grade lithium carbonate was assessed at Yuan 563,000/mt on a delivered duty paid China basis Dec. 7, down Yuan 12,000/mt on the week.
