Gotion Hi-Tech announced on May 20 that its sub-subsidiary “Yichun Gotion Mining Co. Ltd.” has made a successful bid to obtain the rights to prospect for lithium at a site in Yifeng County of China’s Jiangxi Province. The winning bid price is RMB 460 million. Yifeng is also a part of Yichun, a prefecture-level city in Jiangxi.
The site is within a local mining zone known as “Nankuangduan” and under the administration of Huaqiao Township. It is rich in porcelain stone and kaolinite, which are mineral materials that could also contain lithium. The area size for lithium prospecting comes to 0.26 square kilometer. The amounts of porcelain stone and accompanying lithium oxide held within the site are currently estimated to reach around 55.076 million metric tons and 181,750 metric tons respectively.
Gotion stated that obtaining the prospecting rights in this mining zone is a major achievement that will help stabilize lithium carbonate supply and lower procurement cost. Having plenty of upstream raw materials is crucial for Gotion to maintain its position in the market for EV batteries. All in all, securing more lithium prospecting and mining rights not only satisfy the company’s immediate demand but also fits into the company’s development strategy.
According to TrendForce’s investigation, Gotion has obtained two separate prospecting rights in Yichun. Earlier in March, Yichun Gotion Mining became the controlling shareholder of “Huali Mining Co. Ltd.” by acquiring a 51% stake in the company. Huali Mining has the prospecting rights in the “Baishuidong” mining zone, which is also located within the vicinity of Yichun. The amount of lithium oxide held within the site that Huali Mining is prospecting is estimated to reach 26,200 metric tons.
The development of Gotion’s lithium extraction operation in Yichun can be traced back to February 2021, when the company and the city government inked a strategic cooperation framework agreement. Gotion is investing RMB 11.5 billion into a lithium battery industry cluster that is being formed within the local economic development zone. Gotion has also established a wholly-owned subsidiary known as “Jiangxi Gotion New Energy Technology Co. Ltd.” to accelerate the process.
Currently, the first phase of Gotion’s lithium carbonate project in Yichun has completed pilot production and successfully shipped out its battery-grade product. The total production capacity of this project will come to 20,000 metric tons per year. At the same time, Gotion continues to add new production capacity for lithium carbonate in Jiangxi. Two new projects respectively located in Yifeng and Fengxin (which is another county that makes up the city) are scheduled to enter small-scale production this fourth quarter. Each of them has a production capacity of 50,000 metric tons per year.
Gotion is also aggressively capturing sources of raw materials outside China. On May 9, Gotion signed an agreement with Jujuy Energía y Minería Sociedad del Estado (JEMSE) for comprehensive strategic cooperation. Under the agreement, JEMSE will provide Gotion with the prospecting and mining rights over an area of around 17,000ha in Argentina’s Jujuy Province. Furthermore, the two parties will jointly build a local lithium carbonate refinery.
Turning back to China’s Jiangxi Province, numerous Chinese battery manufacturers besides Gotion have set up shops there. CATL, in particular, has also set up a lithium extraction operation in Yichun. Earlier on April 20, one of CATL’s subsidiaries made a successful bid to obtain the rights to prospect for lithium at a site in a mining zone between Yifeng and Fengxin. The winning bid price came to RMB 865 million. The area size for lithium prospecting totals 6.44 square kilometers. The amounts of porcelain stone and accompanying lithium oxide held within the site are estimated to reach 960.251 million metric tons and 2.65678 million metric tons respectively.
Commenting on its operation in Yichun, CATL stated that it will accelerate exploration and mining in areas with lithium reserves. At the same time, the company will pursue these activities in accordance with the national regulatory framework and industrial strategy that ensure a stable supply of strategic mineral resources. By helping to increase lithium supply, CATL hopes to push prices of lithium and other related raw materials back down to “a reasonable level”.
This article is a translation of a Chinese article written by Martin 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.