(Yicai Global) Feb. 23 -- Zhite New Materials, a lithium miner backed by Chinese power battery giant Contemporary Amperex Technology, has won the exploration rights to a lithium mine in China’s Xinjiang Uygur Autonomous Region with a bid of CNY6.1 billion (USD885 million).

Zhite’s offer for the 105-square-kilometer mine in Ruoqiang county was nearly 400 times the starting price of CNY15.8 million (USD2.3 million), the local government said in a statement on Feb. 21. The five-year rights can be renewed, it added.

The mine has more than 8 million tons of lithium carbonate equivalent and 1.56 percent of lithium oxide, higher than the average for such mines in China, based on preliminary estimates, according to a report by Essence Securities.

Lithium resources have become the focus of competition among battery makers because of the rapid development of the new energy vehicle market. CATL, the world’s largest battery maker, has in recent year won the rights to lithium mines at home and abroad via investments or partnerships. Last November, it said it would spend CNY6.4 billion to participate in Yajiang Snowway Mining Development’s reorganization plan.

Lithium carbonate prices have plunged in China this year along with a decline in NEV sales in the country. Battery-grade lithium carbonate is averaging CNY422,500 (USD61,300) a ton, down nearly 30 percent from the record high in the fourth quarter of last year, according to figures on the website of steel and commodities data provider Mysteel.Com.

Zhite was founded last November. Its largest shareholder is Zhicun Lithium Group, which owns 49 percent of the company. Zhicun Lithium’s second-biggest shareholder is Ningde-based CATL, with a 23 percent stake.

Zhicun Lithium started construction work on a battery-grade lithium carbonate plant with an annual capacity of 120,000 tons in Ruoqiang county last year. The firm’s lithium carbonate shipments totaled 60,000 tons in 2022, according to its website. It plans to raise that to 200,000 tons this year and 500,000 tons in 2025.

Editor: Futura Costaglione