(Yicai Global) Nov. 30 -- CNNC Hua Yuan Titanium Dioxide has bought a stake in a firm that owns the mining rights to a salt lake in western Qinghai province to ensure stable supply of lithium carbonate, a raw material needed to make the batteries of electric cars, the Chinese chemicals company said yesterday.

CNNC Hua Yuan will pay CNY200 million (USD31.4 million) for a 4.39 percent stake in Qinghai Jintai Potash Fertilizer, which will extract around 7,000 tons of lithium carbonate a year from its mine at Balun Mahai once it is fully up and running, the Guangzhou-based firm said.

CNNC Hua Yuan has agreed to purchase no less than 2,000 tons of lithium carbonate a year at 97 percent of the market price from 2023, it said. It will buy 20 percent of Jintai’s lithium salt products and 20 percent of its bittern raw materials.

Titanium dioxide giants already produce a key ingredient needed to make the battery cathode material lithium iron phosphate. A byproduct of titanium dioxide, which is an inorganic chemical pigment widely used in paper, plastics, chemical fibers and other products, is ferrous sulfate that is used to make ferric phosphate. Ferric phosphate and lithium carbonate are the main raw materials of lithium iron phosphate.

CNNC Hua Yuan’s share price [SHE:002145] closed up 1.04 percent at CNY13.57 (USD2) today.

Editor: Kim Taylor