(Yicai) Sept. 5 -- China's Yahua Industrial Group said it has renewed its long-term lithium battery materials supply agreement with Contemporary Amperex Technology, the world's biggest maker of electric vehicle batteries.

Yahua recently penned a lithium salt deal with CATL to supply it with battery-grade lithium hydroxide and lithium carbonate from January 2026 to December 2028, the Chengdu-based company announced late yesterday.

Lithium hydroxide is the main raw ingredient used for ternary lithium-ion battery cathode, while lithium carbonate is mainly used to make cathode for lithium iron phosphate batteries.

The delivery amount and product price will be determined each year based on the agreement between the two companies, Yahua noted, without disclosing further details.

Since becoming CATL's direct supplier in March of last year, Yahua has racked up CNY1.1 billion (USD148 million) in sales revenue from the Ningde-based firm as of Dec. 31, accounting for about 11 percent of its annual lithium salt products sales.

Yahua signed its first long-term lithium salt supply agreement with CATL on Aug. 1 last year, agreeing to provide 41,000 tons of battery-grade lithium hydroxide products through the end of next year.

Yahua also renewed its battery-grade lithium hydroxide supply agreement with Tesla for seven and a half years in August last year, with the pair also inking a three-year battery-grade lithium carbonate supply agreement in June. Yahua had bagged about CNY5.8 billion in sales revenue from the US electric vehicle giant as of the end of last year.

Yahua, an industrial and civil explosives maker, has rapidly expanded into the power battery sector's upstream supply chain in recent years. Income from its lithium salt business accounted for 70 percent of its total revenue last year, while its civil explosive business only about 29 percent, with the rest coming from its transportation service business, according to its annual financial report.

Besides producing lithium salts, Yahua is also a partial owner of a lithium mine in Sichuan. Since 2020, it has signed several long-term battery-grade lithium hydroxide supply deals with major ternary battery suppliers such as Tesla, SK On's Chinese unit, and LG Chem.

Shares of Yahua [SHE: 002497] closed up 0.7 percent to CNY8.75 (USD1.23) in Shenzhen today, after jumping by as much as 4.1 percent in the morning trading session.

Editor: Martin Kadiev