The capital will be used specifically for the renovation and expansion of the leased iron phosphate production assets
Tsaker New Energy Tech is stepping up its push into battery materials.
The company's indirect non-wholly owned subsidiary Shandong Tsaker New Materials Co is teaming up with Zijin Lithium to establish a joint venture that will upgrade an existing iron phosphate production line and initially target annual capacity of 100,000 tonnes.
The proposed JV, to be named Fujian Tsaker Zijin New Materials Co, will focus on research and development, production and sale of iron phosphate, a key product in Tsaker New Energy's battery materials business.
Shandong TNM will hold a 55% stake, while Zijin Lithium will own 45%. Once established, the JV will become a subsidiary of Tsaker New Energy, with its results, assets and liabilities consolidated into the group's financial statements.
Under the cooperation model, the JV will lease Zijin Lithium's existing iron phosphate assets, including land, buildings and equipment, with annual production capacity of approximately 20,000 tonnes.
The JV will then carry out expansion and upgrading work on the production line.
The companies' initial plan is to raise annual iron phosphate production capacity to 100,000 tonnes, with further expansion possible depending on market demand.
That would put the targeted capacity at five times the existing production level.
The JV's registered capital of RMB93.2 million will be funded entirely in cash.
Shandong TNM will contribute RMB51.26 million, representing 55% of the registered capital, while Zijin Lithium will contribute RMB41.94 million for its 45% stake.
Both shareholders are required to complete their capital contributions within five years from the date of the JV's establishment.
Tsaker New Energy said its contribution will be funded through internal resources and/or bank borrowings.
The capital will be used specifically for the renovation and expansion of the leased iron phosphate production assets.
Tsaker New Energy said the partnership is designed to combine the two sides' respective strengths.
The company will contribute its expertise in iron phosphate production processes, technology, research and development and operational management, while leveraging the financial strength of Zijin Mining's group.
The project will also give Tsaker New Energy a new production base in Shanghang, Fujian, extending its footprint beyond its existing bases in Dongying, Shandong, and Cangzhou, Hebei.
The company said the new base will help it better serve southern China, reduce costs and improve product competitiveness.
The project location is also expected to benefit from industrial clustering, enabling closer cooperation with upstream raw-material suppliers and downstream customers.
The partnership will extend beyond capital investment.
Shandong TNM and its related parties will provide proprietary technologies, production techniques and management expertise to the JV. In return, the JV will pay technology royalties.
The calculation basis, settlement cycle and payment method for those royalties will be negotiated separately.
The leasing of Zijin Lithium's existing iron phosphate assets has also not yet been finalized.
Tsaker New Energy said Shandong TNM is still negotiating the lease with Zijin Lithium. Because Zijin Lithium will become a substantial shareholder of the JV, the eventual lease could constitute a connected transaction or continuing connected transaction under Hong Kong listing rules.