A recent auction for a controlling stake in the Dechenonba lithium mine in Sichuan, China has drawn attention to the country’s surging interest in the commodity, reportedly attracting 3,448 bids.
Citing the judicial auction platform JD.com, Bloomberg reported the 54.3% stake in mine owner Yajiang Snowway Mining Development sold for about 2 billion yuan (US$299 million), almost 600 times higher than the starting price of 3.35 million yuan.
The winner’s identity was not available.
A bidding war erupted over Dechenonba, located in southwestern China, on 21 May among 21 bidders. According to the report, more than 980,000 people watched the five-day event online.
“We believe the auction price indicates a bullish Chinese primary market for future lithium prices as well as the strategic importance of Sichuan spodumene assets,” Daiwa Capital Markets’ analysts Dennis Ip and Leo Ho said in a note to Bloomberg.
While an uptick in demand for lithium is of a global scope, Chinese prices for lithium carbonate have spiked more than 400% over the past year.
Yajiang Snowway is currently in bankruptcy; the Dechenonba lithium mine has estimated reserves of 24.9 million tons and a planned one-million-ton capacity annually.