(Yicai Global) March 25 -- Guoxuan High-Tech Power Energy will team up with a mining firm run by the local government in Yichun, southeastern Jiangxi province to ensure it gets priority access to the minerals it needs to manufacture electric car batteries.

Guoxuan High-Tech will form a joint venture with Yichun Mining to extract lithium ore and ensure it gets a long-term and stable supply, the Hefei, eastern Anhui province-based firm said yesterday. Guoxuan High-Tech will have a 51 percent stake in the JV and Yichun Mining the rest.

China’s third-biggest lithium-ion battery maker will have first choice of all minerals mined by the JV. In this way, it will be able to control its raw material costs and be in a better position to resist price fluctuations, it said.

German carmaker Volkswagen is in the process of acquiring a 26 percent in Guoxuan High-Tech for EUR1.1 billion (USD1.3 billion) in a move that would make it the majority shareholder. The deal is still subject to approval by regulators.

Guoxuan High-Tech’s share price [SHE: 002074] closed up 0.49 percent today at CNY36.95 (USD5.65).

Editor: Kim Taylor