(Yicai Global) Aug. 27 -- Shares in Tibet Mineral Development nudged upwards today after the Chinese mining and metals firm said it plans to invest CNY2 billion (USD308.5 million) to more than double production capacity of lithium carbonate, a key raw material used to make new energy vehicle batteries, at its mine at the Zabuye Salt Lake.

Tibet Mineral’s share price [SHE:000762] closed up 1.07 percent today at CNY63.99 (USD10). The stock has gained nearly five-fold since the start of the year and hit an all-time high of CNY68.85 earlier this week.

Unit Tibet Shigatse Zabuye Lithium High-Tech will be in charge of the expansion project, which will produce around 12,000 tons of the raw material a year, on top of the current output of over 8,000 tons, the Lhasa-based firm said yesterday. Some 9,600 tons of this will be battery-level lithium carbonate and the rest industrial grade. The second phase will also manufacture potassium chloride and some rare metal salt compounds once up and running in late 2023.

The Zabuye Salt Lake on the Tibetan plateau is the world’s third-biggest lithium salt lake and China’s biggest lithium mine with proven reserves of 1.8 million tons. In terms of brine concentration, Zabuye is only second to Chile’s Salar de Atacama. It is up to 70 percent cheaper to extract lithium carbonate from salt lakes as opposed to mines.

The funds will come from a mixture of sources, said Tibet Mineral, which was bought by steel giant China Baowu Steel Group last year. Between CNY700 million (USD108 million) and CNY1.2 billion will be raised through a private placement scheme, another CNY450 million (USD69.4 million) to CNY950 million will be borrowed from banks and the remainder will come from its own funds.

It will also be necessary to build photovoltaic power stations to provide the mine with the electricity and industrial steam it needs as these utilities are in short supply on the remote Tibetan plateau, it added.

China’s NEV boom has driven up the prices of the raw materials needed to make car batteries. The spot price of battery-level lithium carbonate has doubled since last October to CNY90,000 (USD13,882) per ton as of June 4, Tibet Mineral said, citing data from the Shanghai Metals Market.

Editor: Kim Taylor