(Yicai Global) July 26 -- Shares in Yongxing Special Materials Technology soared by the exchange-imposed limit today after the Chinese electric car battery materials supplier said it will invest CNY503 million (USD74 million) to construct another lithium ore beneficiation plant to meet surging downstream demand.

Yongxing’s stock price [SHE:002756] jumped by the exchange-imposed daily limit of 10 percent to finish at CNY161.48 (USD23.92).

The new plant will process lithium ore into lepidolite and other byproducts, the Huzhou, eastern Zhejiang province-based company said yesterday. Lepidolite is the main raw material used to make lithium salt, an important mineral needed in battery cathodes.

Located in lithium-rich Yichun, eastern Jiangxi province, the facility will have an annual processing capacity of three million tons of ore and is scheduled to be completed next year.

Yongxing bought an almost 94 percent stake in Jiangxi Yongcheng Lithium Technology in 2018, giving it access to rich lithium resources and paving the way for its entry into the EV battery materials field. The firm also has supporting ore mining and dressing capabilities.

The firm has been ramping up output to meet surging demand for battery materials as new energy vehicle sales boom. This year, Yongxing’s lithium salt capacity is expected to more than double from last year to 30,000 tons.

Yongxing’s plan to raise CNY1.1 billion (USD162.9 million) through a private placement of new shares was given the green light by Chinese regulators last month. Most of this will go towards building a lithium carbonate plant with an annual capacity of 20,000 tons and a beneficiation factory capable of processing 1.8 million tons of ore a year.

Editor: Kim Taylor