In December, the quoted price of lithium carbonate rose from RMB 200,000 per ton at the beginning of the month to an average price of RMB 280,000 per ton, an increase of up to 40 percent.
As the new energy vehicle (NEV) industry grows, the rapid rise in raw material prices has forced power battery makers to increase their efforts to extend their reach upstream.
A subsidiary of Contemporary Amperex Technology Co Ltd (CATL), China's largest power battery maker, recently set up a mining company with another company with a registered capital of 800 million yuan ($12.6 million).
The company, called Guizhou Shidai Mining Co Ltd, was established on December 31, 2021, according to data provider Qichacha.
It is 90 percent owned by CATL Guizhou, a subsidiary of CATL (SHE: 300750), and 10 percent by Guizhou Phosphate Chemical Group.
The company's business scope includes mining of mineral resources, mineral washing and processing, sales of metal ores, sales of non-metallic ores and products, and manufacturing of non-metallic mineral products.
Just a day before the company was established, on December 30, Sichuan Shuneng Minerals Co, Ltd was established with a registered capital of RMB 500 million.
The company has four shareholders, with the largest shareholder being Sichuan Road & Bridge Co Ltd, with a 67 percent stake, and BYD holding 1 percent.
Data released by the China Automotive Battery Innovation Alliance in December showed that CATL had 11.45 percent GWh installed in China in November, with a 55 percent market share, while BYD had 3.46 GWh installed in November, ranking second with a 16.6 percent share.
(Graphic by CnEVPost)
These moves come at a time when the prices of raw materials used in batteries are rising in tandem with rising sales of NEVs.
According to Mysteel Group, the price of battery-grade lithium carbonate rose by RMB 10,000 per ton today to an average price of RMB 290,000 per ton, with the highest price quoted topping RMB 300,000 per ton.
In December, lithium carbonate was quoted at an average price of RMB 280,000 per ton from RMB 200,000 per ton at the beginning of the month, a one-month increase of up to 40 percent and more than 410 percent from December 2020.