(Yicai Global) March 13 -- Xinxiang Tianli Energy's stock climbed after the Chinese supplier of lithium-ion battery cathode material said it plans to invest CNY6 billion (USD871 million) to develop a new lithium materials project.

Shares of Tianli Energy [SHE: 301152] closed up 1.9 percent at CNY49.55 (USD7.21) in Shenzhen today, after jumping by as much as 4.3 percent in the morning trading session.

The project in Yecheng county in China's western Xinjiang Uyghur Autonomous Region will include a mineral separation plant, with annual processing capacity of 5 million tons, a lithium salt manufacturing plant for making 30,000 tons of lithium salt a year, as well as a lithium-ion battery cathode material factory that can turn out 100,000 tons of lithium-ion cell cathode material annually, Tianli Energy said late yesterday, citing a deal signed with the local government.

The first phase of the lithium salt plant  will be finished within a year after the agreement is officially inked, with all the other parts of it taking at most three years to complete, Tianli Energy noted.

Based on current market prices, the mineral separation plant together with the lithium salt plant are expected to bring CNY20 billion (USD2.9 billion) in annual revenue after reaching their designed capacities, Tianli Energy said. Revenue from the lithium-ion battery cathode material factory is likely to reach about CNY15 billion annually.

The local government will also support Tianli Energy to secure exploration and mining rights for lithium ore resources in the county's administrative area, the comapny said, without disclosing further details.

Editor: Martin Kadiev