Home » Chinese EV battery firm CATL co-invests in phosphate mining company

Chinese EV battery firm CATL co-invests in phosphate mining company

China EV Competition is fierce.

by SEP Editor
3 mins read
(Photo CredIt: Reuters)

According to Qichacha, a Chinese enterprise information inquiry platform, Guizhou Shidai Mining Co., Ltd. was established on December 31, 2021, with a registered capital of 800 million yuan ($125.88 million). 

The company is jointly owned by Guizhou Phosphate Chemical (Group) Co., Ltd. and CATL (Guizhou) New Energy Materials Co., Ltd., a wholly-owned subsidiary of Contemporary Amperex Technology Co., Limited (CATL) (300750.SZ). The new company is 90% owned by CATL Guizhou, and 10% by Guizhou Phosphate Chemical Group.

The business scope contains: mineral resources (non-coal mining) mining; mineral processing (except rare earth, radioactive minerals, tungsten); mineral washing and processing; metal ore sales, etc.

CATL is a leading global lithium-ion battery R&D and manufacturing company, focusing on the development, production and sales of new energy vehicle power battery systems and energy storage systems, dedicated to providing first-class solutions for global new energy applications.

And in the previous November 23, 2021, Yichun Times New Energy Resources Co., Ltd., a wholly-owned subsidiary of CATL, was established with a registered capital of 1 billion yuan($156.90 million). 

BYD’s participation in phosphate mining company

Just a day before the establishment of Guizhou times, Sichuan Shuneng minerals limited liability company (hereinafter referred to as “Shu can minerals”) was established on December 30, the registered capital of 500 million yuan($78.41 million), shareholders include BYD, Sichuan Road and Bridge, Sichuan energy power, Mabian Yi Autonomous County Harvest State-owned Assets Limited (hereinafter referred to as “Hefeng”).

The main business of Shuneng Minerals is to be responsible for the phosphate ore exploration and mining and processing in Mabian County and neighboring areas, investment in phosphate resources, and investment in new lithium iron phosphate material projects.

Phosphorus is an indispensable part of lithium battery materials. As the demand for downstream lithium battery materials continues to increase, the demand for upstream raw materials such as phosphate rock, ammonium phosphate, and phosphoric acid has also increased. Phosphate rock is non-renewable and scarce, and all countries have export restrictions.

Previously, BYD has repeatedly mentioned that the widespread use of blade battery has reshaped the industry’s perception of lithium iron phosphate batteries and accelerated the return of lithium iron phosphate batteries to the mainstream power battery track.

Chinese Power battery giants compete to mining companies

In 2021, stocks related to the new energy vehicle industry chain became the darling of the capital market.

According to Wind data, the trend of new energy vehicles, power batteries and lithium mining topics have fluctuated, but the overall trend is up. 2021, the above three topics rose 36.75%, 66.50% and 186.29% respectively.

From May 2021 to December 2021, the output of China domestic lithium iron phosphate batteries has exceeded that of ternary lithium batteries for seven consecutive months. This has led to explosive growth in the upstream raw materials of lithium iron phosphate batteries, prices have risen all the way, and supply continues to be tight.

2021 is a big year for Lithium iron phosphate. The price of Lithium iron phosphate was 37,000 yuan/ton in January. As of December 27, the price was 99,000 yuan/ton, an overall increase of 167.57% for the whole year. At the same time, the production capacity of lithium iron phosphate is 320,000 tons in 2020, and the production capacity of lithium iron phosphate was reached 920,000 tons by December 2021, showing a double increase.

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