China’s XTC New Energy Materials has announced plans to invest at least CNY10bn ($1.55bn) in a lithium battery materials project in Sichuan province.
The investment will be made to construct a plant that will have a capacity to produce 100,000 tonnes of lithium iron phosphate and 60,000 tonnes of ternary materials annually.
In a filing, XTC New Energy stated that it has signed a letter of intent with Yaan Economic and Technological Development Zone in Sichuan, southwest China, for the plant, Reuters reported.
Yana is currently a lithium production base for Tesla supplier Yahua.
XTC New Energy will invest CNY1.2bn ($190m) in the first phase project, which is expected to have an annual production of 20,000 tonnes of lithium iron phosphate component.
The first phase, which is anticipated to commence operations in 2023, will allow the company to begin producing lithium iron phosphate, which is not currently in its portfolio.
Involving an investment of CNY2.2bn ($340m), the first phase of the ternary materials component is expected to enter into operations in 2024. The phase will have a production capacity of 20,000 tonnes per year.
Ternary refers to a mix of three metals, which include as nickel, cobalt and manganese, used in lithium-ion battery cathodes.
It will also include a 10,000 tonnes-per-year nickel and cobalt smelter for battery recycling.
XTC New Energy, a unit of metals and rare earths producer Xiamen Tungsten, said that the subsequent investments will be made taking into market conditions.
The company still has to submit a feasibility study to its board and the project is expected to be funded from bank loans.
Separately, the battery materials producer has signed an agreement with CNGR Advanced Materials for the supply of cobalt tetroxide and ternary precursor materials.
Under the agreement, CNGR will supply 20,000-25,000 tonnes per year of cobalt tetroxide to XTC New Energy from 14 September 2021, to 31 December 2023.
