Ganfeng had signed the cooperation agreement with Jiangte Motor and its subsidiaries including wholly-owned subsidiary company Jiangte Mining and Jiangte Mining subsidiary Yichun Yinli New Energy in August.

After entering the agreement, Ganfeng investigated the Yichun Yinli production line and raised technical transformation plans. But the two parties failed to reach an agreement on the technical side and both agreed to abandon the cooperation. The companies terminated the operation agreement on October 28.

Under the cooperation agreement, Ganfeng would have managed and operated lithium production lines in Yichun owned by Jiangte Motor and its subsidiaries, receiving all operating income and bearing operating losses between October this year and March 2023.

Jiangte Motor’s subsidiary lithium companies own production lines with an output capacity of 5,000 tonnes per year of lithium carbonate produced from mica, 10,000 tpy of battery-grade and industrial-grade carbonate derived from spodumene, a 5,000 tpy hydroxide expansion project and a 10,000 tpy carbonate project using mica.

Lithium prices have tracked a continuous downward trend since 2019, and the Covid-19 pandemic this year has affected both supply and demand in an already low-priced environment. In China, the battery-grade lithium carbonate market stabilized in early-July and has gradually narrowed up in October due to improved downstream buying supported by a recovering domestic new energy vehicle sector.

Fastmarkets assessed the weekly lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China at 40,000-41,000 yuan ($5,959-6,108) per tonne on Thursday October 29, up from 39,000-41,000 yuan per tonne on October 22. The price had held at 37,000-41,000 yuan per tonne for three months between July 9 and October 8, having fallen from 45,000-51,000 yuan per tonne at the start of 2020 and 75,000-83,000 yuan per tonne at the start of 2019.