China’s Contemporary Amperex Technology (CATL) said on Thursday a subsidiary had won the rights to a lithium mine in the country’s southern Jiangxi province for 865 million yuan ($134.76 million).
The mine will supply a new lithium battery production and manufacturing base in Yichun, which CATL agreed to build with the local government last year, the company said in a WeChat post.
An index of global lithium prices compiled by Benchmark Mineral Intelligence surged 280% in 2021 and another 127% in the first quarter as supply is squeezed by booming demand for EVs.
On Tesla’s quarterly earnings call Wednesday, Chief Executive Officer Elon Musk appealed for more investment in lithium mining, saying it is the “fundamental limiting factor” for EV adoption worldwide.
Related Article: Musk appeals for more lithium production to meet battery demand
“CATL will speed up the exploration and development of lithium mineral resources and increase the supply of lithium in a bid to bring the prices of lithium-related raw materials back to a reasonable level,” the company said in the statement.
The win builds on an agreement CATL signed with the Yichun municipal government to jointly construct a new lithium-ion battery production base to better coordinate across the EV supply chain.
CATL last week announced it was partnering with state-owned Indonesian firms in a $6 billion project covering nickel mining, battery materials, manufacturing, and recycling, in a further effort to secure a wider array of base metal resources for battery production.
Rival LG Energy Solution said days later it was leading a consortium in a non-binding battery value-chain pact, without specifying any financial information.
CATL reported better-than-expected full-year profit and announced plans to spend 13 billion yuan ($2 billion) on a new factory in China.
Net income for 2021 more than doubled to 15.93 billion yuan, the company said late Thursday, beating analyst estimates of 13.51 billion yuan.
Still, the manufacturer scrapped its dividend and reported weaker profitability at its key power battery systems division as it warned of surging raw-materials costs.
(With files from Bloomberg and Reuters)