(Yicai Global) Sept. 24 -- Shares in Chengxin Lithium Group soared by the exchange-imposed limit today before retreating after the Chinese lithium giant said that it will invest USD390 million in two overseas projects in Indonesia and Argentina to increase capacity.

Chengxin Lithium’s share price [SHE:002240] closed up 5.1 percent at CNY69.90 (USD10.8) today. Earlier in the day it had reached CNY73.16.

The Shenzhen-based firm will spend USD350 million to build a lithium ore-processing plant in the Indonesia Morowali Industrial Park with an annual capacity of 50,000 tons of lithium hydroxide and 10,000 tons of lithium carbonate, Chengxin Lithium said yesterday.

It will also pay USD36.8 million to take over Argentine miner Salta Exploraciones [S.A.] from Huayou International Mining (Hong Kong), Chengxin said. Salta Exploraciones holds the operating rights to the SDLA project in the South American country which has a yearly output of 2,500 tons of lithium carbonate.

The Indonesian project will greatly boost the group’s profitability and revenue as well as increase its global market share, said Chengxin Lithium, which at the moment is producing around 25,000 tons of lithium carbonate and 15,000 tons of lithium hydroxide a year. The Argentine project will help expand the firm’s upper-stream lithium resources.

Salta Exploraciones also holds half of the exploiting rights to two other mineral resources, which have not yet been exploited, with Potasio Y Litio de Argentina owning the other 50 percent, Chengxin Lithium said.

Editor: Kim Taylor