The Story of Yichun: The Lithium Capital of Asia

Highlights :

  • The lithium carbonate production from Yichun is projected to reach 7 million tons and 500,000 tons respectively by 2025
  • As the massive investments into infrastructure and production at Yichun demonstrate, it takes a lot more than just deposits to build a Lithium-Ion powerhouse.

Yichun is a mountainous prefecture-level city in western/northwestern Jiangxi Province, China, bordering Hunan to the west. The city is famously known as the Lithium Capital of Asia, as a result of the mammoth availability of the resource in the region. The city produced around 81,000 tons of lithium carbonate in 2021 – more than a quarter of China’s total. Further, the local production of lepidolite concentrate and lithium carbonate production is projected to reach 7 million tons and 500,000 tons respectively by 2025.

Lithium has seen its demand soar globally – mostly due to rise in demand of Lithium ion batteries – as the world looks to reduce greenhouse gas emissions in the transport sector because of the climate crisis. Yichun is home to the world’s largest mine for lithium-bearing mineral lepidolite. The significance of Yichun can be understood by the fact that has a reserve of 1.1 million tonnes of lithium oxide, representing 31 per cent of China’s recoverable lithium oxide output and 12 per cent of the world’s output. Considering China’s overwhelming dominance of the Lithium supply chain currently from mines to batteries, perhaps the crown of Lithium capital of the World may also fit Yichun.

A Magnet for Battery-makers

In 2021, the lithium capital generated revenue of CNY45.5 billion (USD 6.68 billion). The local government announced in October 2022 that 133 projects related to the lithium battery industry chain, including mining, lithium salt and lithium material production, and battery production and recycling, are currently being constructed in Yichun. The total investment for these projects amounts to CNY135.6 billion (USD 19.9 billion). As of December, Fifty-one new projects were announced in 2022, with their total investment exceeding CNY160.7 billion.

Several industrial giants announced their investment plans in the city, like Chinese lithium battery giants Contemporary Amperex Technology (CATL), BYD, Volkswagen-backed Gotion Hi-Tech, and Sunwoda Electronic. Owing to the rise of EVs as an alternative to emission-causing vehicles and the lithium potential of Yichun, the city has become a magnet for battery makers.


Ganfeng Lithium, a Chinese battery material giant, has been doing business in Yichun for nearly 20 years and the sales of lithium metal that Ganfeng produces in the city make up over 40 per cent of the global total. The firm penned down an agreement regarding the projects worth CNY30 billion (USD 4.4 billion) in the city that involve a whole industrial chain from lithium mining to battery manufacturing. The battery plant will have an annual capacity of 30 GWh and a facility with a capacity of 50,000 tons of battery-grade lithium salts.

In 2021, Yichun Contemporary Amperex Resources Limited, a subsidiary of CATL, decided to explore the city’s potential and signed an agreement with the Yichun municipal government to jointly build a new lithium-ion battery production base. The company will provide Honda with 23 GWh batteries for EVs, from 2024 through 2030, to be produced in CATL’s production base in Yichun. Gotion’s local unit Yichun Gotion Hi-Tech Battery also planned a 30-GWh power battery base in two phases in the city.

BYD joined the list of CATL and BYD last year with investments to the tune of CNY 28.5 billion (USD 4.18 billion) in a battery factory and mining project in the city of Yichun. It will boast an annual capacity of 30 GWh and the mining project will produce 100,000 tonnes of lithium annually.

With investment plans of at least CNY16.5 billion (USD2.4 billion), Sunwoda Electronic, a Chinese supplier of lithium-ion battery cells and modules, is also eyeing several lithium material projects in the city. The projects will include a battery-grade lithium carbonate plant with an annual capacity of 50,000 tons, a lithium battery cathode material facility with a 300,000-ton annual output, and a comprehensive recycling plant with a processing scale of 50 GWh of waste batteries per year. Sunwoda further plans to establish a JV with Yichun Mining, a local state-owned company with mining resources, to co-develop lithium mine projects.

The Price Of Success

Yichn has also paid a price for its success, most recently in the ‘abnormal’ colour and quality of a key river, Jib, that flows in the region.

The issue was apparently the production lines in the region, that started burning lithium mica, to jump on to the more lucrative Lithium opportunity. While ceramics do not cause water and radioactive pollution, burning lithium mica is a different story. Previous environmental impact assessments were done based on the standards for ceramic plants rather than lithium plants.

Official data as of June 2022 says that over 100 lithium new energy projects were under construction as of June 30, 2022, with total investment of CNY121.5 billion (USD17.5 billion). Twenty-one other lithium new energy projects worth CNY142.5 billion were in negotiations.

The story of Yichun is worth highlighting for readers at a time when the hype around inferences of lithium deposits found in Jammu and Kashmir is at a peak. People need to realise that it will take a lot more than just the start of mining, which itself will need a minimum of 4-5 years to follow due process, before anything can be predicted in terms of impact. More importantly, it will need a lot more than just the deposits to make India a Lithium powerhouse, as associated investments and eco-system will need concerted action and backing too.

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Junaid Shah

Junaid holds a Master of Engineering degree in Construction & Management. Being a civil engineering postgraduate and using his technical prowess, he has channeled his passion for writing in the environmental niche.