Da Zhong Mining Plans to Collaborate with Wanhua Battery Materials to Build an annual lithium salt project with a production capacity of 200,000 tons

On the evening of March 23, Zhongda Mining (001203) announced that the company plans to sign a tripartite investment agreement with the Meishan High-tech Industrial Park Management Committee and Wanhua Chemical (Sichuan) Battery Materials Technology Co., Ltd. (hereinafter referred to as “Wanhua Battery Materials”) to jointly invest in and build a 200,000-ton lithium salt production project, further enhancing the company’s upstream industry chain layout in lithium battery new energy.

The announcement shows that the overall planned capacity for the lithium salt project is 200,000 tons, to be built in three phases: Phase 1 with an annual capacity of 30,000 tons, Phase 2 with 70,000 tons, and a long-term Phase 3 with 100,000 tons. The combined investment for Phases 1 and 2 is about 2.2 billion yuan, while Phase 3 is planned to be funded through the operational cash flow from Phases 1 and 2. To promote the project’s implementation, the company plans to establish a joint venture with Wanhua Battery Materials as the main entity for Phase 1. The joint venture will have a registered capital of 300 million yuan, with Zhongda Mining contributing 240 million yuan (80% ownership) in cash, and Wanhua Battery Materials contributing 60 million yuan (20% ownership). The project will be located in the Meishan High-tech Industrial Park, with a construction period of two years after the joint venture’s establishment.

Zhongda Mining stated that this cooperation leverages its own lithium resource reserves and Wanhua Battery Materials’ advantages in chemical new materials and customer channels to promote the extension of lithium resources into high-value-added lithium salt processing, improving the upstream resource to midstream material industry chain collaboration. Currently, the company’s Sichuan Jiada Lithium Mine’s initial exploration area (only one-tenth of the exploration rights) has recorded resources of 1.4842 million tons of lithium carbonate equivalent. The Phase 1 ore mining scale is 2.6 million tons per year, and based on industry technology levels, the mined ore can produce about 50,000 tons of lithium carbonate annually after reaching full production.

Public information shows that Zhongda Mining mainly engages in iron ore, gravel aggregates, and other businesses. In recent years, it has been continuously transforming into the upstream lithium resource sector of new energy, with domestic lithium mineral resources in place and a guaranteed supply capacity. The lithium salt project is an important move for the company to extend from resource extraction to processing. Wanhua Battery Materials is part of Wanhua Chemical’s new energy materials platform, with industry advantages in battery material R&D, production, and supply chain integration. The cooperation between the two parties will help improve project operational efficiency and market competitiveness.

From the current operation of the lithium salt industry, the global lithium salt market is at a critical stage of supply and demand adjustment by 2026. On the demand side, sales of new energy vehicles continue to grow steadily, and energy storage batteries are becoming a major driver of lithium demand. Industry estimates suggest that by 2026, global lithium demand for energy storage will grow by over 50%, steadily increasing overall lithium salt demand. On the supply side, global lithium resource projects are gradually coming online, but due to factors such as mine construction progress, lithium extraction efficiency from salt lakes, and capacity ramp-up, effective supply release is relatively slow, resulting in a tight overall industry balance and a gradual stabilization of lithium carbonate prices. After previous industry capacity adjustments, domestic lithium salt companies are focusing more on integrated industry chain layouts, with resource self-sufficiency and downstream customer binding capabilities becoming core competitive factors. Cross-sector resource companies collaborating with chemical material enterprises to build lithium salt projects has become a common industry synergy model.

Several brokerages have recently provided objective analyses and outlooks on the lithium industry. UBS estimates that global lithium demand will grow by about 14% by 2026, with supply constraints likely to create a slight supply-demand gap, supporting an upward trend in lithium prices. Huatai Securities believes that the lithium industry will still face phased supply pressure in 2026, but by 2027, supply and demand are expected to reverse, with a high certainty of shortages, and companies with resource and processing integration advantages will be more resilient to industry cycles. Guoxin Securities points out that current industry inventories are low; if downstream demand exceeds expectations, temporary supply-demand mismatches could boost lithium price elasticity. Industry chain collaboration and layout will be key to maintaining stable profits.

Most brokerages agree that in the medium to long term, lithium, as a core upstream raw material for new energy, will see sustained demand growth. Under the “dual carbon” goals, the expansion of new energy installations will continue to open up industry space. As industry competition becomes more rational, lithium salt companies that own lithium mineral resources, bind key downstream customers, and achieve integrated operations will have advantages during industry cycle fluctuations.