(Yicai Global) June 14 -- Sichuan New Energy Power surged as much as 7.2 percent today after the Chinese new energy power plant operator said it will invest CNY1.5 billion (USD222.7 million) together with electric car battery makers Svolt Energy Technology and Eve Energy in a lithium salts project.

Sichuan New Energy’s share price [SHE:000155] closed up 3.4 percent at CNY23.12 (USD3.43). Earlier in the day it had hit CNY24. Eve Energy’s stock [SHE:300014] nudged up 1.14 percent to close at CNY100.81 (USD15).

Sichuan New Energy will partner with Svolt Energy and Eve Energy to set up a plant in Deyang, southwestern Sichuan province with an annual capacity of 15,000 tons of battery-grade lithium hydroxide and lithium carbonate a year, the Chengdu-based firm said. Construction should finish in two years’ time.

A joint venture with a registered capital of CNY750 million (USD111 million) will be set up to build and run the facility, in which Sichuan New Energy will hold a 51 percent stake. Another CNY750 million will be raised from bank loans.

Eve Energy and Changzhou, eastern Jiangsu province-based Svolt Energy will have first choice of products. The partnership will ensure the supply of raw materials and improve the company’s footprint in the upstream supply chain, Huizhou, southern Guangdong province-based Eve Energy said in a separate statement.

The project will help Sichuan New Energy get a better foothold in the electric car battery industry and smooth its transition into the new energy sector, said the Chengdu-based company.

Sichuan New Energy recently bought the Lijiagou Lithium Mine in Sichuan province, the largest single spodumene mine in Asia that is still under construction. Once up and running, the mine is set to produce 180,000 tons of lithium concentrate a year.

Editor: Kim Taylor