A Chinese firefighting firm is aiming to secure its share of the electric vehicle market after buying a LiFePO4 battery company and buying stock in a lithium concentrates firm.
Shaanxi J&R Optimum Energy, a fire protection system solutions company bought a 19.9% share of Australian mining firm Altura Mining for AUS$41.6 million ($30.69 million), reported the China Daily newspaper.
The latest deal allows Optimum to secure supply of 10-15 million MTs of spodumene a year as the firm’s strategic focus switches from fire protection systems to electric vehicles (EV).
Optimum brought one of the largest LiFePO4 battery manufacturers in China, Shenzhen OptimumNano Energy Co. in March, before the shares purchase.
Optimum’s factory will be capable of a producing 1.5million 32650-5.5Ah cells a day.
Guo Hongbao, Optimum’s Chairman said the company wanted to meet the growing demand for lithium-ion batteries.
China Daily quoted Hongbao as saying: “We believe the acquisition of Altura will ensure that we have a safe place in the upstream part of the value chain.”
According to China Association of Automobile Manufacturers, China’s EV output reached 340,000 in 2015, four times more than in 2014.
And from January to October 2016 EV production reached 276,000 and sales 258,000, a year-on-year growth of 98.1% and 102.5% respectively.
To meet EV demand the annual output of lithium-ion batteries reached 16.9GWh in 2015, and 25.3GWh in the first six months of 2016. Meanwhile China’s demand is projected to reach 125GWh in 2020, according to data from Sinolink Securities Co and QD-LIB.com.
Chinese automobile manufacturer BYD Auto has previously announced it would invest ¥245 million ($35 million) to set up a 30,000 tone lithium carbonate project.