As China's power battery industry chain sees an intensive expansion period, Eve Energy hopes to extend its business to upstream raw materials by acquiring equity stakes.

On July 10, the Shenzhen-listed power battery maker announced that it plans to acquire a 28.125 percent stake in lithium producer Jin Kunlun Lithium Co, and that the two companies plan to set up a joint venture in Qinghai province in western China.

The joint venture plans to invest up to RMB 1.8 billion ($278.1 million) in a 30,000-ton-per-year lithium carbonate and lithium hydroxide project in phases, with the first phase of the project to produce 10,000 tons of lithium carbonate and lithium hydroxide per year.

The registered capital of the joint venture is proposed to be RMB 180 million, with Eve Energy contributing RMB 144 million, holding 80 percent of the joint venture, and Jin Kunlun contributing RMB 36 million, holding 20 percent of the company.

Jin Kunlun's main business is lithium metal, with a planned annual capacity of 3,000 tons and an existing annual capacity of 1,000 tons.

After the completion of the acquisition, Eve Energy will become the second-largest shareholder of Jin Kunlun instead of Qinghai Golmud Industrial Park Development and Construction Co, which will withdraw from the shareholders of Jin Kunlun, and the first largest shareholder will be Dachaidan Dahua Chemical Co with 36.66 percent shareholding.

Eve Energy said that the company set up a joint venture with Jin Kunlun to build a 30,000 ton per year lithium carbonate and lithium hydroxide project, aiming to give full play to their respective advantages and resources and focus on producing high-quality lithium carbonate and lithium hydroxide.

The project is conducive to enhancing the stability of the company's supply chain and reducing the adverse impact of raw material price fluctuations on the company, the company said, adding that it is of positive significance for it to develop the upstream industry chain and optimize the industrial layout.

If this project is successfully completed and achieved sales, it is expected to have a positive impact on the company's future financial position and operating results, the company said.

On the same day, Eve Energy also announced that it plans to implement another equity acquisition.

According to an announcement, Eve Energy intends to transfer 5 percent of Dahua Chemical held by Gensin Union for an equity transfer price of RMB 110 million.

According to the announcement, the area of Dachaidan Salt Lake is about 240 square kilometers, and the mining right area is 89.7505 square kilometers, and the mined minerals include boron, potassium, lake salt, lithium and bromine, and Eve Energy is interested in Dahua Chemical's mining right of Dachaidan Salt Lake.

Founder of CATL, battery supplier to NIO and Tesla, becomes world's 30th richest person