(Yicai Global) March 2 -- A unit of Tinci Materials Technology Co. will spend USD200 million on lithium ore purchases from Australia to ensure a steady raw material supply for its lithium battery business.

Jiujiang Tinci Mining Co. will buy lithium oxide and tantalum ores from Sinosteel Australia Pty. through a contract running from May 2018 through September next year, the Guangzhou-based parent said in a statement.

Lithium is an in-demand commodity in China due to its role as a raw material for the production of batteries used in new energy vehicles. The country has become a major battleground for the development of NEVs globally over the past few years. Some 605,500 plug-in passenger cars were sold in China in 2017 as the nation captured almost half of the total global NEV market and it grew 30 times faster than the worldwide average, data from industry researcher EV Volumes shows.

The USD200 million contract includes costs, insurance and freight, the announcement said, adding that the actual amount will be determined by the pair based on contract terms, specification and product quality and quantity.

The contract could also be extended if both parties agree on a base price for future products.

The deal will help promote JTM's business development and ensure the raw material supply for GTMT's lithium-ion battery business, and is a key part of the latter's lithium battery material strategy, the announcement said.