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Ganfeng Lithium plans to invest 21.3 billion yuan ($3.1 billion) to expand power battery capacity, with 19.3 billion yuan to be used for expanding production capacity at three lithium battery plants, while the rest to build a polymer lithium battery plant.
Ganfeng will invest 9.6 billion yuan to build a battery plant with annual capacity of 20 GWh in southwestern China’s Chongqing city, which will also make second-generation solid-state lithium batteries and construction is scheduled to wrap up within 18 months. The company also plans to invest 6.2 billion yuan to build a plant with an annual production capacity of 10 GWh in Xinyu, which is expected to be into production by October 2023.
Ganfeng will also spend 3.5 billion yuan building a second power battery production plant in Xinyu, with an annual capacity of 6GWh, it said, without disclosing the timetable.
In addition, the company plans to invest 2 billion yuan to build a polymer lithium battery production plant in Xinyu, with the first phase designed to have output of 250 million lithium batteries per year for wireless headphones, it said.
Ganfeng’s first-half net profit soared 412% to 7.3 billion yuan from a year earlier, and revenue jumped 255% to 14.4 billion yuan, driven by big increases of lithium salt demand and prices, the company had reported.
Ganfeng Lithium said its production and sales were generally lower than expected in the first half. However, it’s forecasting an improvement for the second half, citing the completion of its Mt Marion mine expansion in Australia, new capacity in China, and the relaxation of virus curbs. The company also unveiled expansion plans for battery production in Chongqing and Jiangxi.
Lithium carbonate prices have jumped almost 80% in China so far this year, with the recent power crunch in Sichuan adding impetus to the rally. Demand for the battery material, meanwhile, is accelerating as the automotive industry increasingly turns to electric vehicles. UBS Group has lifted its long-term price forecast for battery-grade lithium by 38%, as incentivizing new supply will require even higher prices, it said in a recent note.