SHANGHAI, Aug 24 (SMM) - Hainan Mining announced on August 23 that the company plans to construct a 20,000 mt battery-grade lithium hydroxide project (Phase I) with the investment no more than 1.06 billion yuan.

The project is expected to be constructed in one and a half years, including the purchase and transportation of spodumene, the building of the supporting public works, and the construction of auxiliary facilities.

Battery-grade lithium hydroxide, one of the core raw materials for motive lithium batteries, has been in short supply since the beginning of the year. Driven by the explosive growth in demand, the spot prices of battery-grade lithium hydroxide keep rising. As of August 23, SMM average spot quotation stood at 115,500 yuan/mt, surging 135.7% on the year.

SMM survey shows that domestic major smelters still receive large amounts of orders, and the lithium hydroxide prices will continue to rise.

The major cost of Hainan Mining’s project is the purchase expenses of raw material spodumene. The spodumene will be mainly imported from Australia, and the prices may be affected by the exchange rate fluctuations and the international political risks, which may have a greater impact on the project's profitability.