(Yicai Global) April 8 -- Jiangxi Special Electric Motor, which counts China's third-largest battery maker Gotion High-Tech as one of its clients, plans to invest CNY2 billion (USD314 million) to respond to the rising lithium demand.

JSMC plans to build a lithium mining and processing plant with an annual capacity of three million tons and a lithium salt production facility with an annual capacity of 20,000 tons in southeastern China's lithium-rich Yichun, the Jiangxi province-based electric motor manufacturer said in a statement yesterday. Construction takes 24 months. 

Last September, JSMC signed a long-term supply agreement regarding battery-grade lithium carbonate products with Gotion High-Tech, controlled by Volkswagen Group, with a minimum monthly supply of 500 tons.

The motor company intends to finance the above-mentioned project by itself through means including capital market fundraising. It aims to attract its major battery clients or strategic investors to join as shareholders of its new lithium salt production plant.

JSMC currently owns mining rights for two lithium mines and exploration rights for five sites in Yichun, resulting in more than 100 million tons of lithium resources at its disposal. The firm also already has a lithium salt processing plant in Yichun with an annual capacity of more than 30,000 tons.

JSMC's stock price [SHE: 002176] closed up 0.34 percent at CNY20.48 (USD3.22) today. The shares have almost tripled in value over the past 12 months.

Editor: Emmi Laine, Xiao Yi