Ganfeng Lithium is reportedly planning to build a lithium production plant in Fengcheng city, Jiangxi province, China.

A related investment contract has also been signed by Ganfeng with the local government in Fengcheng, reported Fastmarkets.

The plant will be equipped to convert spodumene, which is a mineral mined for its lithium content, into lithium battery materials.

Planned to be built in two phases, the proposed facility will have the capacity to produce 50,000tpa of lithium carbonate equivalent (LCE).

The plant is expected to have an annual production capacity of 25,000t of lithium hydroxide, a chemical used in nickel-rich batteries, in the first phase.

As part of the proposed plan, Ganfeng intends to set up a joint venture company in Fengcheng.

The move follows Ganfeng’s aim to boost its LCE capacity by roughly fivefold to at least 600,000tpa, reported Reuters.

According to the news agency, the plant ‘will further expand the company’s production scale and market share of lithium salt products’, as well as boost core competitiveness and profitability.

The announcement by the China-based company comes amid surging demand for lithium, as countries shift focus towards transitioning to a low-carbon economy.

In March 2021, Ganfeng Lithium signed a $225m deal to purchase a 49% interest in China Minmetals-operated Yiliping lithium salt lake project in Qinghai Province, China.

Located in Qaidam Basin, the Yiliping project will use the salt lake’s brines to produce battery chemical lithium carbonate.