The project will be led by Ruipu Energy, the company's battery division, and will have an estimated annual production capacity of 30GWh.

The first phase of the project will start construction in mid-2021 and target an annual output of 15GWh by 2023. The expansion works for the second phase will start in 2022 with production targeted for 2024.

The new battery plant aims to meet demand for new energy in Southern China in light of the need for shorter supply chains, the company said.

Lithium is a key ingredient in the manufacture of batteries for electric vehicles and for energy storage systems, and lithium demand for both uses is expected to soar in the coming years.

Domestic Chinese lithium spot prices rose on Thursday on fresh restocking by consumers after three weeks of stability.

Fastmarkets’ assessment for the lithium carbonate, 99.5% Li2CO3 min, battery grade, spot price range exw domestic China rose to 88,000-92,000 yuan ($13,398-14,000) per tonne on April 1, up by 2,000-3,000 yuan per tonne (2.9%) from 85,000-90,000 yuan per tonne in the prior week. 

The lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price range exw domestic China also rose by 4.1% week on week to 73,000-78,000 yuan per tonne on Thursday, having remained at 70,000-75,000 yuan per tonne since March 4.

Both prices have been rising steadily since the start of 2021 amid increased downstream buying and tightening supply.