China’s CATL, the leading battery manufacturer for electric vehicles, is considering bidding for exploration rights to two lithium mines in the Sichuan province. To comply with the bidding process, CATL has established a new mining subsidiary. This move reflects CATL’s intention to strengthen its upstream resources in the face of volatile battery supply chains.

Challenges in Extracting Lithium

CATL may face obstacles in extracting lithium from these mines due to poor geological conditions in the plateau areas, as indicated by a research note by Guosen Securities.

Details of CATL’s Mining Subsidiary

CATL has created a new mining company called Maerkang Times Mining with a registered capital of RMB 300 million ($42 million). The subsidiary intends to bid for two local lithium mines, according to a report by The Paper.

The Ministry of Natural Resources in China has recently initiated the bidding process for exploration rights to these two lithium mines. The auction for the licenses will take place with a combined starting price of RMB 3.76 million next month.

The mines in Maerkang and Jinchuan are expected to have significant lithium reserves, with estimated lithium oxide equivalent content of over 1.8% and 1.3% respectively, based on findings by the China Geological Survey.

CATL did not respond to Shanghaiist’s request for comment.

Increasing Interest in the Lithium Mining Space

CATL recently obtained regulatory approval for the acquisition of Sinuowei Mining Development Co. Ltd, which has exploration rights to a local mine with a substantial lithium reserve. Zhite New Materials, formerly backed by CATL, also won a bid to develop lithium reserves in Xinjiang, but faced regulatory issues and was barred from upcoming auctions.

The price of battery-grade lithium carbonate has been volatile, reaching a peak of nearly RMB 600,000 per ton before dropping to RMB 180,000, and then rebounding to around RMB 300,000.

（Picture: Veer）