(Yicai) June 19 -- China’s Dazhong Mining plans to invest CNY1 billion (USD139 million) building a factory for lithium metal, a key material used in next‑generation solid state and semi‑solid state batteries, leveraging its lithium resource base to move beyond mining into high‑margin processing.

To be sited in an industrial development zone in the lithium-rich county of Linwu in central China, the plant will be able to produce 3,000 tons of lithium metal materials a year once fully operational, the Baotou-based firm said yesterday, citing a deal it signed with the local government-backed zone's management committee.

The facility will be built in three phases. Before the end of this year, it will complete pilot production. Next April it will begin building a production line with an annual capacity of 1,000 tons, which is slated to start up by the end of 2027. Then in June 2027 it will start on an additional 2,000-ton line that will come on stream by the end of 2028.

Solid-state batteries are a new type os energy storage unit that uses solid electrodes and electrolytes. Mainstream solid state and semi‑solid state batteries use lithium metal plus certain functional additives as their anode, which enables the battery to work.

Compared to conventional batteries using liquid electrolytes, solid-state batteries can increase the charging range and the safety of electric vehicles. But their development is challenging because of high production costs, so their practical application is still in the early stages.

Semi‑solid state batteries deliver much higher energy density than conventional liquid‑electrolyte cells, but since their electrolyte remains partially liquid at the microscopic level, they are not structurally the same as true all‑solid state batteries.

Essentially an iron ore miner, Dazhong also has mining rights for lithium resources in China’s Hunan and Sichuan provinces. Located in Linwu, the Hunan mine has 490 million tons of proven mineable ores, with an average grade of 0.268 percent, which represents over 3.24 million tons of lithium carbonate equivalent, according to the firm's website.

Dazhong’s shares [SHE: 001203] closed 1.8 percent down at CNY9.89 (USD1.38) each today. The broader Shenzhen market fell 1.2 percent. The stock has gained 15 percent in value over the past month.

Editor: Futura Costaglione