Chinese iron ore miner Hainan Mining Co., Ltd. said on Monday that it will invest US$200 million to build a battery-grade lithium hydroxide plant to profit from the booming demand in the electric vehicle (EV) industry.

The company said that the project will be located in the east of Hainan Province in southern China and will produce 20,000 tons of lithium hydroxide, a chemical used in lithium-rich electric vehicle batteries. The company decided to expand from the iron ore business to the lithium business because the price of the latter has roughly doubled so far in 2021, due to a strong rebound in demand and an imminent shortage expected after a three-year downturn.

The price of iron ore in the first six months of 2021 hit a record high, and Hainan Mining's net profit from January to June increased by nearly 3000% year-on-year.

"Hainan Province is closer to Australia, and Australia is the main source of spodumene raw materials for this project." The company said in a document submitted to the Shanghai Stock Exchange, referring to lithium-containing minerals that can be converted into battery chemicals. "Compared with Jiangxi and Sichuan, the main production areas of lithium hydroxide on the mainland, the island has obvious advantages in maritime logistics." He added that the construction of the project will take 18 months.

Keywords: international engineering project, foreign engineering project information

Jiangxi and Sichuan provinces in inland China are respectively the locations of Ganfeng Lithium and Tianqi Lithium, the two largest lithium producers in the world. Hainan Mining pointed out that in view of the increasing popularity of battery materials, competition in the lithium market is fierce. Chinese battery manufacturer EVE Energy, another company that has recently ventured into lithium production, announced the establishment of a 1.8 billion yuan joint venture last month.Editor/Baohongying