(Yicai Global) March 23 -- China’s southwestern province of Yunnan recently announced a campaign to scrutinize the safety of photovoltaic and lithium battery material-related firms.

Provincial regulators will inspect firms in the new energy supply chain, such as silicon material suppliers, solar panel makers, and producers of cathode materials for ternary lithium batteries and lithium iron phosphate batteries and anode and separator materials for lithium batteries, according to a plan unveiled on March 20 by Yunnan’s emergency management department. If potential risks are found, firms will be told to halt operations and rectify the issues.

Yunnan has abundant reserves of lithium and phosphorite. It mainly relies on renewable energy sources for its electricity, which is relatively cheaper in the province. But the lithium battery and new energy sectors are connected with the smelting, chemicals, machinery, and electronic materials industries, which use hazardous chemicals and there is a risk of explosions.

In 2021, an explosion occurred at the lithium iron phosphate plant of Qujing Lintie Technology, a joint venture between Chinese battery giant Contemporary Amperex Technology and nanomaterials firm Shenzhen Dynanonic, that hurt 12 people and attracted much attention.

The checks, expected to be completed before the end of June, aim to verify whether companies have implemented safety management and control measures and identified and dealt with hidden dangers in a timely manner, and make sure that any hazardous and outsourced operations, stored dangerous chemicals, and explosion risks all comply with regulations. 

Combined revenues at companies involved in Yunnan's new energy battery industry reached CNY7.6 billion (USD1.1 billion) in the first half of last year, a 507 percent surge from a year earlier.

Thirty-one major lithium battery projects are under construction in province, with total investment near CNY100 billion (USD14.6 billion), according to The Paper. Several lithium battery giants, including Yunnan Energy New Material, Dynanonic, Shanshan, and Eve Energy, have all invested in Yunnan.

Editor: Futura Costaglione