(Yicai Global) Sept. 27 -- Shares of Tibet Summit Resources were moving wildly after the Chinese mining company said it intends to raise up to CNY8 billion (USD1.2 billion) via private placement to mostly support its lithium production in Argentina.

Tibet Summit's stock price [SHA: 600338] climbed as much as 5.9 percent intraday but was 7.8 percent down at CNY36.19 (USD5.60) in the afternoon. The shares have more than tripled in value this year amid the surging lithium carbonate prices.

The Chinese minerals company will issue new shares to as many as 35 investors, the firm that is based in the Xizang Autonomous Region said in a statement yesterday.

Prices of battery raw materials have been rising this year amid the booming electric vehicle sector. Currently, Chinese battery-grade lithium carbonate costs between CNY143,000 and CNY176,000 (at least USD22,137) per ton, up as many as four times from last November, according to commodity data provider SunSirs. The price hikes have prompted upstream supply chain firms to increase their output.

Tibet Summit has three destinations in mind for the money. The firm will spend almost half of the private placement proceeds on the Sal de los Angeles lithium project in northern Argentina, with an expected output of 50,000 tons of battery-grade lithium carbonate.

The investment should result in increased profit. The lithium plant should generate CNY4 billion in annual revenues and CNY1.4 billion in net profit based on a market price of CNY90,000 (USD13,932) per ton.

Secondly, the firm intends to invest CNY100 million (USD15.5 million) to explore salt flat Salar de Arizaro in north-western Argentina in the next 12 months, it said. The intentions include completing a feasibility study before applying for a mining permit.

The licensed area of 338.5 square kilometers in the above-mentioned salt flat is the biggest for Tibet Summit in Argentina, it said. In comparison, the firm has a right to develop almost 99.5 sq km of land in the Sal de los Angeles project.

Finally, some CNY1.8 billion of the private placement proceeds should be spent to increase the annual capacity of a lead-zinc ore project in Tajikistan to six million tons from the current four million tons, the company concluded.

Editor: Emmi Laine, Xiao Yi