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Chinese Companies Ramp Up Investment in Lithium Batteries

EV battery maker CALB targets $1.47 billion Hong Kong IPO
A rechargeable lithium ion battery made for Volkswagen. Photo: Reuters

• Country wants to cut its dependence on lithium imports for EV batteries

• Ganfeng Lithium to invest $1.3bn in two projects as EV demand soars


Companies in China are moving to boost production of lithium batteries amid a desire to reduce the country’s dependence on foreign imports of lithium as the production of electric vehicles expands.

Two major producers of lithium batteries announced plans on Thursday to expand their production.

Ganfeng Lithium, the world’s biggest lithium company by market capitalisation, said on Thursday its subsidiary would invest a total 8.4 billion yuan ($1.3 billion) in two projects that will make “new-type” lithium batteries.

And EVE Energy plans to build a production facility for power and energy storage batteries in Jingmen in the central province of Hubei, according to a report by Argus Media.

These announcements follow a report by China’s Global Times last month that said the country’s “lithium supply chain is about to enter a turning point as the nation strives to reduce its reliance on foreign suppliers such as Australia”.

China is the world’s largest consumer of lithium but the bulk of it is imported, mostly from Australia, plus Chile and Argentina.

The report said China “wants to build a greener and more secure domestic supply chain” and suggested that it will boost its extraction and production of lithium from salt lakes in the country’s west.

Batteries for Tesla

Ganfeng is best known as a supplier of battery-grade lithium to clients including electric vehicle (EV) maker Tesla, but also makes batteries and last week secured 973.1 million yuan of investment in battery unit Ganfeng LiEnergy, including from electronics giant Xiaomi, Reuters said.

Ganfeng LiEnergy will spend 5.4 billion yuan to set up an industrial park in Chongqing, southwest China, with annual battery production capacity of 10 gigawatt hours (GWh) and an advanced battery research institute, Ganfeng said in a filing.

It did not say what the “new-type” batteries would be, although it said the institute would provide technical support for “various solid-state batteries,” which use solid electrolytes rather than flammable liquid ones.

First production is expected within two years of the start of construction, which is slated to begin within three months, the company said.

The second project will see Ganfeng LiEnergy spend another 3 billion yuan on a 5 GWh battery plant in Ganfeng’s home province of Jiangxi, which will be put into operation in October 2023.

The 15 GWh total planned capacity marks a major escalation in Ganfeng’s battery ambitions as demand for EVs grows.

China‘s top battery maker, Contemporary Amperex Technology Co Ltd (CATL), currently has 69.1 GWh of production capacity and another 77.5 GWh under construction.

Ganfeng, which has this year splashed out some $900 million on lithium assets at home and overseas as rising prices swell its coffers, said in May it would explore setting up a battery plant in Argentina.

The company’s Shenzhen shares are up around 82% year-to-date, giving Ganfeng a market capitalisation of 252.63 billion yuan, according to Refinitiv Eikon data.

The EVE project has a design capacity of 30GWh/yr, including 15GWh/yr for lithium iron phosphate batteries used in logistics vehicles and household energy storage and 15GWh/yr for ternary batteries used in electric passenger cars.

Jim Pollard and Reuters


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