(Yicai Global) Feb. 3 -- Jiangxi Special Electric Motor plans to expand its lithium battery material capacity by building a new plant in the Chinese city of Yichun, also known as ‘Asia’s lithium capital.’

Jiangxi Special Electric will invest up to CNY650 million (USD96 million) on a lithium carbonate plant with an annual capacity of 30,000 tons, the Jiangxi province-based firm said late yesterday. Construction is expected to start within six months and wrap up next year, it added.

Yichun produced 81,000 tons of lithium carbonate in 2021, accounting for more than a quarter of China’s total. Jiangxi Special Electric owns two lithium mining rights and five exploration rights in Yichun. The firm owns or controls more than 100 million tons of lithium resources.

Because of strong demand for power batteries, the price of battery-grade lithium carbonate surged fivefold in 2021 and more than doubled to a record CNY590,000 (USD87,475) a ton last November from CNY270,000 at the start of 2022. Prices later began to fall, and now stand at about CNY470,000 a ton.

Because of the higher lithium carbonate prices, Jiangxi Special Electric said on Jan. 31 that it expects net profit to have skyrocketed 483 percent to 561 percent to between CNY2.3 billion and CNY2.6 billion (USD333.7 million and USD378.2 million) last year. Management predicted last May that the firm’s annual production capacity of lithium carbonate would reach 20,000 tons to 27,000 tons.

Last April, the firm also made public a plan to invest CNY2 billion (USD300 million) to build a mining and selection plant with an annual processing capacity of three million tons of lithium ores and a lithium salt production plant with an output of 20,000 tons a year. 

Shares of Jiangxi Special Electric [SHE: 002176] closed down 1.2 percent at CNY19.30 (USD2.86) each today.

Editor: Futura Costaglione