Dazhong Mining Expands Lithium Resources at Jiada Mine

Dazhong Mining

Lithium Resources at Jiada Mine Increase Significantly

Inner Mongolia Dazhong Mining has revised higher its lithium resource estimates at the Jiada spodumene mine in Sichuan. The mine’s reserves now total 1.4842mn t of lithium carbonate equivalent (LCE) with an average grade of 1.38pc lithium oxide. This upgrade raises Dazhong’s total lithium resources across its assets to 4.72mn t LCE. The company also operates the Jijiaoshan lithium mine in Hunan province, strengthening its domestic lithium footprint.

Dazhong’s Investment in Lithium Supply Chain Expansion

Dazhong is actively expanding into downstream lithium processing and battery production. The firm is building lithium carbonate and cathode active material production lines, alongside lithium-ion battery plants in Hunan, with an investment of 16bn yuan ($2.2bn). It also plans to develop a large-scale complex in Inner Mongolia with 40,000 t/yr lithium carbonate, 40,000 t/yr lithium salts, 250,000 t/yr lithium iron phosphate, 100,000 t/yr artificial graphite anode material, and 10 GWh/yr lithium-ion batteries. These projects highlight China’s ambition to dominate the entire lithium value chain.

Lithium Market Pressures Despite Long-Term Demand

The lithium market remains oversupplied, pushing prices to multi-year lows despite robust long-term demand forecasts. Chinese lithium carbonate prices are currently at Yn59,800-61,000/t ex-works, down 89pc from the November 2022 peak of Yn561,000-576,000/t. Rising supply from Chinese producers, including new capacity expansions like Dazhong’s, has weighed on spot prices. However, strong demand from electric vehicles, energy storage systems, and emerging battery technologies is expected to support recovery in the medium term.

The Metalnomist Commentary

Dazhong Mining’s resource upgrade and heavy downstream investments underline China’s strategy to secure leadership across the lithium supply chain. While today’s oversupply keeps prices depressed, structural demand from EVs and storage solutions suggests that projects like Jiada will be vital in balancing the global market in the next decade.