Chinese battery maker EVE to invest in lithium production

Chinese battery maker EVE Energy said on Friday it would take a stake in a small lithium producer and establish a joint venture to build a lithium chemicals project costing up to 1.8 billion yuan ($277.8 million).

Picture for representation. (Bloomberg)
Picture for representation.

The move is EVE's latest tilt to secure ingredients for batteries used in electric vehicles, such as lithium. It previously took a small stake in cobalt producer Zhejiang Huayou Cobalt and a 17% interest in a $2.1 billion nickel and cobalt project alongside Huayou in Indonesia.

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EVE, based in Huizhou in southern China, said in an exchange filing it planned to take 28.1% equity in Jinkulun Lithium Industry Co, which makes lithium metal in China's northwestern Qinghai province, known for its lithium salt lakes.

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The two companies agreed to set up a Qinghai-based venture 80% owned by and 20% owned by Jinkulun to build a plant to make 30,000 tonnes per year of battery chemicals lithium carbonate and lithium hydroxide, EVE said.

First-phase output would be 10,000 tonnes, it added, putting the total project construction time at no more than 36 months.

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EVE said the venture was "conducive to improving the stability of the company's supply chains" and could reduce the adverse impact of raw material price fluctuations.

Prices for battery-grade lithium carbonate in China, as assessed by Asian Metal, have fallen about 2% in the past month but are still up more than 65% so far in 2021 as demand roars back after a three-year downturn.

First Published Date: 10 Jul 2021, 18:30 PM IST
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