(Yicai Global) July 22 -- Eve Energy, one of China's biggest battery suppliers, intends to join hands with two partners for a new CNY3 billion (USD443.3 million) project to ensure its supply of lithium salts which are becoming increasingly expensive.

The three partners will form a joint venture with an annual capacity of 90,000 tons of lithium salts, the Huizhou-based battery materials developer said in a statement yesterday. After the first CNY900 million (USD133 million) phase, the project should make as much as 30,000 tons of lithium compounds per year.

Lithium has become costly. Battery-grade lithium carbonate prices exceeded CNY500,000 (USD73,895) per ton earlier this month, more than six times that logged in the first half of last year. The surging prices have forced battery makers to go upstream to ensure their raw material supply via investments while raising product prices.

Ruifu Lithium Industry, a developer of lithium salts based in eastern China's Shandong province, will be the JV's biggest shareholder with its 40 percent stake. A subsidiary of Longyan-based Zijin Mining Group will have 34 percent of the equity. Finally, Eve Energy will hold the remainder of 26 percent. However, it will own 66 percent of the rights to sell the JV's products.

Those rights will help Eve stabilize the supply of raw materials for its numerous lithium battery projects to enhance its profitability, the firm added.

Eve's stock price [SHE: 300014] closed 0.4 percent up at CNY98.40 (USD14.60) as benchmark indexes fell after the share price rose as much as 4.5 percent intraday. The equity price is still more than 20 percent down in the past 12 months.

Editor: Emmi Laine, Xiao Yi