(Yicai Global) Oct. 14 -- Zangge Mining, Jiangxi Special Electric Motor, and other producers of lithium battery materials anticipate sharp profit increases for the first three quarters of the year due to rising lithium carbonate prices.

Net profit at Zangge Mining, China’s second-largest potassium chloride producer, likely jumped by as much as 413 percent to at least CNY4.2 billion (USD586 million) in the nine months ended Sept. 30 from a year earlier, the firm said late yesterday. Its stock [SHE: 000408] jumped 6 percent today to finish at CNY29.08 (USD4.04).

Jiangxi Special Electric also said yesterday that it expects net profit to have soared 662 percent to 742 percent to between CNY1.9 billion and CNY2.1 billion in the same period. The company’s shares [SHE: 002176] rose 3 percent to CNY19.67 (USD2.73).

In the first half, Zangge Mining turned a CNY2.4 billion profit, versus CNY450 million (USD62.6 million) a year earlier. Jiangxi Special Electric’s profit skyrocketed nearly 650 percent to CNY1.3 billion in the period.

They attributed the gains to the rapid development of the new energy vehicle industry increasing demand for power battery raw materials, which in turn drove up lithium carbonate product sales and prices. The average price of battery-grade lithium carbonate was CNY525,000 (USD73,060) a ton yesterday, up 2.8 times on a year ago, according to the latest data from Shanghai Metals Market.

Jiangxi Special Electric said late last month that the sharp and rapid rise of lithium carbonate prices was mainly due to insufficient production capacity and strong demand from a rapidly growing new energy sector. Prices depend on factors such as national policies, upstream mining capacity, and downstream demand, it added.

Zangge Mining has an annual production capacity of 10,000 tons of lithium carbonate. It recently announced that in the first half of this year its output reached 4,770 tons. Jiangxi Special Electric owns or controls more than 100 million tons of lithium resources, and can produce 25,000 tons of lithium carbonate and 10,000 tons of lithium hydroxide a year.

China’s annual lithium carbonate capacity was about 500,000 tons, and that of lithium hydroxide was around 260,000 tons, according to the China Nonferrous Metals Industry Association. The top two producers are Tianqi Lithium and Ganfeng Lithium Group, the CNMIA noted.

Editor: Futura Costaglione