(Yicai) May 14 -- Shares of Jiangxi Special Electric Motor, also known as Jiangte Motor, gained after the Chinese maker of motors which is transforming into a lithium producer said it has secured a long-term license for a top-ranking lithium mine in Yichun, also known as the "lithium capital of Asia."

Jiangte Motor [SHE: 002176] closed 1 percent up at CNY10.18 (USD1.40) after jumping as much as 5.5 percent in Shenzhen earlier. The bourse's benchmark index closed down 0.1 percent today.

The mining and manufacturing company received a 30-year license from China's natural resources ministry to extract resources from the Qian Keng lithium mine with an expected annual scale of three million tons, the Yichun-based firm announced yesterday. 

The Qian Keng mine is one of the most lithium-rich deposits in the world and one of China's top-ranking operational mines in terms of ore grade, per the company. The open-pit mine is characterized by large reserves and easy extraction. The average grade of the mine is 0.44 percent lithium oxide, which would result in mineral reserves of 72.9 million tons of ores, but some areas exceed a grade of 0.55 percent. 

The certificate marks a milestone in the company's lithium mining business, it said. In recent years, Jiangte Motor has gradually shifted its focus toward mining and processing lithium salts. Last year, revenue from this business reached CNY1.6 billion (USD230 million), making up 59 percent of the total, while the previously dominant motor business accounted for a declining share of 39 percent.

However, the falling prices of lithium salts, which are key materials for making batteries, affected Jiangte Motor's profitability last year. Annual revenue slumped by 57 percent to CNY2.8 billion from the year prior while net loss amounted to CNY397 million (USD54.9 million), compared to a net profit of CNY2.3 billion in 2022. Hard times continued this year as the firm reported a net loss of CNY30.3 million (USD4.2 million) in the first quarter.

Before the latest addition, Jiangte Motor already held mining rights for three other lithium mines and exploration rights for five more, resulting in over 100 million tons of lithium resources. These assets are all located in Yichun, Jiangxi province.

Editor: Emmi Laine