The Mahong plant, in the industrial development zone of Xinyu, Jiangxi province, currently has a production capacity of 15,000 tpy of lithium carbonate. Ganfeng Lithium will invest up to 500 million yuan ($72.7 million) in a new battery-grade lithium hydroxide project.
With the increasing demand for lithium hydroxide, particularly from the emerging electric vehicle (EV) market, Ganfeng approved the investment in hydroxide production to guarantee sufficient supply. It aims to complete the expansion within 18 months.
Industrial Minerals assessed the Chinese battery-grade lithium hydroxide monohydrate (min 56.5% LiOH.H2O) price
at 110,000-125,000 yuan per tonne on Thursday, down from 110,000-130,000 yuan per tonne last week.
Lithium hydroxide prices in China have been on a downward trend in recent weeks due to lower prices heard for off-grade material.
Ganfeng recently extended its contract with LG Chem
, and signed a new agreement with Tesla.
LG Chem initially agreed an off-take deal with Ganfeng Lithium on August 14, with the latter supplying 47,600 tonnes of lithium hydroxide from 2019 to the end of 2022.
The supply agreement increased to 92,600 tonnes of lithium carbonate and lithium hydroxide from 2019 to 2025 after Ganfeng extended its contract with LG Chem.
Separately, Ganfeng will provide 20% of its lithium hydroxide production capacity to Tesla between 2018 and the end of 2020 at an adjustable market price.
The contract with Tesla can be extended for a further three years upon expiry.
[This article was updated to clarify that the investment will add a lithium hydroxide project alongside Ganfeng's existing lithium carbonate project at the Mahong plant.]