The construction of the plant is expected to take 18 months and the battery-grade lithium hydroxide it produces will supply downstream battery companies, it said on Tuesday August 24.

The location of the plant was chosen for its convenience, Hainan Mining said. This is because in comparison with the provinces of Jiangxi and Sichuan - both of which are major production hubs for lithium in China - Hainan is closer to Australia where spodumene - the feedstock for battery-grade lithium hydroxide production, mostly comes from, it said.

Fastmarkets’ price assessment for lithium hydroxide monohydrate 56.5% LiOH.H2O min, battery grade, spot price range, exw domestic China was at 120,000-123,000 yuan per tonne on August 19, up by 3,000-10,000 yuan per tonne from 110,000-120,000 yuan per tonne on August 12.

Hainan Mining’s primary business is the mining, processing and sale of iron ore. This is its first venture into lithium.