Chinese EV battery maker Gotion High-tech has launched new lithium battery material projects with an expected total annual production capacity of 100,000 tons of lithium carbonate and an annual output value of more than RMB 10 billion ($1.55 billion).

Gotion signed a contract with two county governments in Yichun, southern China, on Tuesday and Wednesday, marking the launch of its two lithium carbonate projects.

The project in Yifeng County covers an area of 600 mu (0.4 square km). Phase I includes the preparation of 20,000 tons per year of lithium materials and the development and utilization of its 3 million tons per year of extracted ore, while Phase II includes 30,000 tons per year of lithium materials and the development and utilization of its 5 million tons per year of extracted ore.

Power battery maker Gotion launches new lithium battery material projects-CnEVPost

After the completion of the project, the annual output value is expected to reach RMB 5 billion. Phase I of the project will start construction in the third quarter and be put into operation by the end of 2022.

The project in Fengxin County covers an area of 600 mu, and the arrangement of Phase I and Phase II is exactly the same as that of Yifeng County.

Power battery maker Gotion launches new lithium battery material projects-CnEVPost

(Photo source: Gotion Hi-Tech)

Upon completion of the project, the annual output is expected to reach RMB 5 billion. The first phase of the project will start construction within the year and be completed and put into operation in 18 months.

The transaction price of battery-grade lithium carbonate was at RMB 90,000 - 93,000 per ton on August 4, and the average price level rose to RMB 91,500 per ton, up 3.4 percent from 14 days ago, according to data provider Baiinfo.

Lithium carbonate prices are expected to reach RMB 180,000 per ton in the second half of the year, the same level as the previous record high, according to a recent research report released by Guotai Junan Securities.

Tight supply and demand in the lithium industry will intensify and may enter a "hard shortage" in the second half of the year, the report said.

As downstream companies' lithium purchases increase, their attitude toward purchases will evolve into a scramble for supplies, the report said.

At press time, Gotion's Shenzhen-traded shares were up at the 10 percent intraday limit, after rising about 70 percent in the past two months.

Power battery maker Gotion launches new lithium battery material projects-CnEVPost

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