SHANGHAI, Aug 23 (SMM) - A weekly update on the trending stories from the New Energy sector.

1. Sinomine Resource Group announced that battery-grade lithium hydroxide and battery-grade lithium carbonate production lines with an annual output of 25,000 mt have been put into trial production on August 19. The production lines are located in Xinyu, Jiangxi, established by Jiangxi Dongpeng New Materials--a wholly-owned subsidiary of the company, in 2020. The main products include battery-grade lithium hydroxide and battery-grade lithium carbonate, serving as the raw materials for cathode materials of lithium batteries.

The company acquired 100% equity of Dongpeng New Materials for 1.8 billion yuan. Dongpeng New Materials is the main supplier of lithium fluoride, a key raw material of lithium hexafluorophosphate, as well as the largest producer and supplier of cesium salt and rubidium salt in China. The new capacity includes 15,000 mt of battery-grade lithium hydroxide and 10,000 mt of battery-grade lithium carbonate. Sinomine Resource Group boasts Zimbabwe's Bikita and Arcadia lithium feldspar lithium resources, and 100% stakes of the Tanco mining area in Canada. According to SMM survey, there will be no lithium ore imports this year. The raw materials are mainly from stocks from the previous sessions. The subsequent lithium carbonate production will be mainly self-supplied to produce lithium fluoride; lithium hydroxide will focus on overseas markets.

2. Shanghai authorities and world-renowned motive power battery leader CATL formally signed a strategic cooperation framework agreement. According to the agreement, the two parties will conduct comprehensive and deep cooperation in the field of new energy, with the purpose to increase the research and innovation of new energy frontier technologies by making full use of talent pool, market prospects and policy advantages to promote the electrification of urban transportation, and strengthen the training of new energy talents. At the same time, CATL will also actively promote the launching of (Shanghai) Innovation Centre, International Functional Headquarters, High-end Manufacturing Base and Future Energy Research Institute in Shanghai.

Among the several projects currently initiated by CATL in Shanghai, the Global Innovation Centre focuses on the development of advanced materials, structural design, extreme manufacturing, business models and other innovative systems. Future Energy Research Institute will conduct in-depth cooperation with Shanghai Jiao Tong University, involving talents cultivation and cutting-edge new energy technology research. High-end Manufacturing Base will rely on CATL’ s own technology to establish automated and intelligent factories. Considering that the domestic manufacturing plant of Tesla, the largest customer of CATL, is also located in Shanghai, relocating part of its functions to Shanghai by CATL can shorten the cycle and costs of battery deliveries. Besides, Tesla can also maintain its stability in supply chain.

3. German automaker Volkswagen Group stated that the company may need to further reduce production due to tight semiconductor supplies on August 19. It was previously reported that Toyota Motor will cut global production by 40% in September.

The current shortage of chips has affected the automobile and NEV sectors. In addition to Toyota, there has been rumours that Ford and Hyundai's plants in the United States will also reduce production due to the same issue. However, Malaysia, a major semiconductor packaging and testing hub with more than 50 semiconductor factories, has once again been affected by the pandemic, causing many factories, including STMicroelectronics, to stop production, which has intensified the tight supply of chip. Taking into account the long production expansion cycle of the semiconductor industry, SMM expects that the tight supply of chips will continue in the short term.