(Yicai Global) Sept. 10 -- Ganzhou Tengyuan Cobalt New Material’s application for an initial public offering on the Shenzhen Stock Exchange’s Nasdaq-style ChiNext Board has been approved, one of its major shareholders said yesterday. The Chinese non-ferrous metal producer aims to raise CNY2.2 billion (USD341 million).

Tengyuan Cobalt New Material, in which lithium giant Ganfeng Lithium holds a 6.9 percent stake, plans to use CNY1.7 billion (USD264 million) of the proceeds to upgrade its production equipment and the rest to supplement working capital, according to its IPO prospectus.

Tengyuan Cobalt produces cobalt and copper, both highly sought-after raw materials used in electric car batteries. In the first nine months, the Ganzhou, central Jiangxi province-based company saw profit more than double from the same period last year to CNY260 million (USD40 million) on the back of surging demand for new energy vehicles. Revenue for the period, though, fell 24.7 percent to CNY1.31 billion.

From 2019 to May 2020, Tengyuan Cobalt supplied CNY18.7 million (USD2.9 million) worth of cobalt sulfate to a subsidiary of Ganfeng Lithium, a major supplier of key raw materials for EV batteries.

Ganfeng Lithium’s share price [SHE:002460] was trading up 2.07 percent at CNY190.68 (USD30) at 1:30 p.m. today.

Editor: Kim Taylor