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Xinxiang Tianli Lithium Energy Will Invest RMB 6 Billion in Lithium Project That Encompasses Prospecting, Mining, and Ore Sorting

published: 2023-03-20 9:30

On March 12, Xixiang Tianli Lithium Energy entered into a cooperation framework agreement with the government of Yecheng (Kargilik) County. Under the agreement, Tianli will set up a lithium project that comprises prospecting, mining, ore sorting, lithium salt production, and battery material production. The project is expected to be completed within three years and entails a total investment of RMB 6 billion. Yecheng is located in China’s Xinjiang Uyghur Autonomous Region.

According to Tianli’s announcement on the cooperation framework agreement, this project will achieve 5 million tons in annual production capacity for lithium ore sorting, 30,000 tons in annual production capacity for lithium salt, and 100,000 tons in annual production capacity for materials used in Li-ion batteries. The facilities for ore shorting, lithium salt production, and battery material production are set to cost RMB 1 billion, RMB 2.5 billion, and RMB 2.5 billion respectively. A formal contract has been signed for the first phase of the lithium salt section. The construction of the first phase is scheduled for completion within one year. As for the other sections of the project, their development schedules will be formulated later in accordance with resource availability and market demand.

Once the project is completed and reaches full-scale production, it is projected to generate an annual total output value of RMB 35 billion. Based on current market prices, the sections for ore sorting, lithium salt production, and battery material production are projected to generate annual output values of RMB 10 billion, RMB 10 billion, and RMB 15 billion respectively.

Tianli has also set up an independent business entity in Yecheng as a primary investor in the said entity. Tianli and the entity will make investments that are primarily related to materials used in Li-ion batteries, energy storage technologies, lithium salt, and lithium ores. They are also open to forming partnerships with other local business entities and organizations that are responsible for managing local resources. Together, they will pursue joint ventures related to lithium mining, ore sorting, lithium salt processing (e.g., lithium carbonate, lithium hydroxide), and battery material production.

Tianli is fully committed to investing within the vicinity of Yecheng and will accelerate efforts to form local joint ventures that in turn can successfully obtain prospecting and mining rights. At the same time, Tianli is also seeking local support to build its lithium project.

If Tianli encounters a resource gap in the development and operation of the lithium project, the government of Yecheng will coordinate with relevant parties to give priority in addressing this issue. The local government is expected to do its utmost to meet the material- and investment-related demand from the project. Furthermore, Tianli expects its own lithium demand to be given priority as long as the company complies with all the relevant laws in exercising its prospecting and mining rights.

Also, Tianli stated that various geopolitical, macroeconomic, and policy-related factors caused significant fluctuations in the prices of the raw materials that it needs during 2022. This, in turn, affected its cost management and pricing strategy to a certain extent. Hence, this cooperation framework agreement is designed to do these three things: (1) strengthen Tianli’s presence in the upstream sections of the industry chain for new energy technologies, (2) increase shareholders’ returns, and (3) support Tianli’s long-term growth strategy.

Established in March 2009, Tianli was formally listed on the GEM board of the Chinese stock exchange on August 29. The company develops, manufactures, and sells ternary precursors and ternary cathode materials. Its offerings are NCM333, NCM523, NCM622, and NCM811 etc. for a wide range of battery-related applications.

Tianli has been focusing on the market segment for small-sized Li-ion power batteries for e-mobility. Its customers in this market segment include PHYLION, Tianneng, Changhong Energy, Highstar, DMEGC, Sungrow, and Great Power. At the same time, Tianli is expanding into the market segment for NEVs. In this market segments, its products have been shipped to PHYLION, SVOLT, CALB, DMEGC, and Great Power. Its production of NEV power batteries has now reached a certain scale.

This article is a translation of a Chinese article posted by Marry at TrendForce. It contains information that is either sourced from other news outlets or accessible in the public domain. Some Chinese names are transcribed into English using Hanyu Pinyin.

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