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Fangyuan Group Plans to Raise RMB 1.886 Billion for Funding Project Related to Battery Materials

published: 2023-06-17 9:30

On June 11, Guangdong Fangyuan New Materials Group announced that it plans to raise no more than RMB 1.886 billion. This amount will be used to do two things. First, a large portion of it will be used to fund the first phase of a project related to the manufacturing of lithium carbonate and the recycling LFP batteries. Second, another portion will be used to supplement the company’s working capital.                                   

Fangyuan Group wants to fast track into the market for LFP batteries. The first phase of the lithium carbonate and battery recycling project will entail an investment of RMB 1.696 billion. The development of the project will be carried out by Jiangmen Fangyuan Lithium Technology and take about 24 months. Once the project is in operation, it will be able to output 30,000 tons of battery-grade lithium carbonate per year and 46,000 tons of iron phosphate per year.

TrendForce points out that Fangyuan Group has been involved in the manufacturing of cathode materials for nickel batteries and high-nickel ternary cathode materials for Li-ion batteries for many years. The company employs a wet-process metallurgy method to produce high-quality metallic raw materials including nickel, copper, and cobalt. Besides cathode materials and raw materials, the company also offers ternary precursors. It continues to develop new solutions to adapt to the evolution of battery technologies from lead-acid batteries to NiCd batteries, NiMH batteries, and Li-ion batteries.

In recent years, Fangyuan Group has increased its production capacity for ternary precursors in order to meet growing market demand, address production capacity constraint, and improve its capability to supply products. Currently, the company is making investments to attain 50,000 tons per year for high-end ternary precursors (for NCA and NCM cathodes) and 10,000 tons per year for battery-grade lithium hydroxide. The company also continues to optimize its strategies for ternary precursors and the comprehensive utilization of Li-ion batteries.

Fangyuan Group said the lithium carbonate and battery recycling project represents the company’s first step into the market for LFP cathode materials. The LFP material business will be grow simultaneously with the company’s existing businesses related to ternary cathode materials and precursors. The company will thus expand its offerings and improve its position in the field of new energy solutions.

The development of the lithium carbonate and battery recycling project will draw on the resources and know-hows that Fangyuan Group has accumulated over many years in processing non-ferrous metals and manufacturing of functional materials. Furthermore, Fangyuan Group believes that the establishment of a LFP material business will add more high-quality clients to its existing client bases. Going forward, the company seeks to integrate into the global industry ecosystem for NEV power batteries. This will be done by having set up major hubs for the production of high-end cathode materials, the production of precursors, and the recycling and comprehensive utilization of NEV power batteries. Ultimately, Fangyuan Group wants to become a supplier that can exert significant influence over the entire global market for battery materials.

Regarding the announcement on June 11, Fangyuan Group also mentioned that it has signed a letter of intention with a major Chinese carmaker for collaborations in the manufacturing and processing of battery-grade lithium carbonate. Fangyuan Group therefore will be supply lithium carbonate for the batteries used in this carmakers’ vehicle models.

Originally, Fangyuan Group wanted to set up a project can recycle 300,000 tons of LFP batteries per year and manufacture 80,000 tons of LFP cathode materials per year. However, the announcement on June 11 revealed that the company has modified its plan. The first phase of the project is set to manufacture lithium carbonate instead of LFP cathode materials. Also, the production capacity and the recycling capacity have been scaled back. Fangyuan Group has also adjusted the total investment in the project, raising the cap of the investment from RMB 2 billion to RMB 3 billion (including working capital).

The development of the whole is divided into two phases. The second phase of the project mainly comprises 40,000 tons per year for LFP cathode materials.

Fangyuan Group said the changes made to the project are in response to the trends related to market demand and clients’ needs. The changes also align with the company’s strategy for sustaining long-term growth, meeting the demand from the new energy sector, and positioning in the wider technological competition. The project is expected to contribute to the expansion and optimization of the company’s product portfolio. Moreover, it will scale up the company’s operation and help create opportunities for raising profitability.

This article is a translation of a Chinese article posted by 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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