Chinese battery manufacturer Contemporary Amparex Technology (CATL) will pay C$8.5mn ($6.4mn) to acquire an 8pc equity stake in Canada-based lithium brine explorer Neo Lithium.

The investment will move Neo Lithium one step closer to development and construction of the firm's wholly-owned Tres Quebradas Lithium Project (3Q project) in Catamarca province, the largest lithium producing area in Argentina, according to Neo Lithium.

The 3Q project has a planned capacity of approximately 20,000 t/yr of battery-quality lithium carbonate, with expansion capacity up to 40,000 t/yr of battery-quality carbonate.

Neo Lithium completed a positive pre-feasibility study in May 2019 and together with the technical assistance of CATL, it will finish the definitive feasibility study (DFS) in order to define the precise financing requirements for the 3Q project.

Further information, including construction plan of the 3Q project, is undisclosed.

CATL, China's largest electric vehicle battery manufacturer, is exploring lithium resources in the domestic and global markets. It invested in Australian lithium developer Pilbara Minerals in September 2019, to ensure a stable supply of lithium concentrates.

CATL supplies batteries to Honda, Toyota, Volvo, BMW and Tesla. The firm produced 47.26GWh equivalent of batteries last year, up by 82pc from 2018, with sales rising by 92pc to 40.96GWh over the same period.

Argus last assessed China import prices for lithium carbonate at $6.50-8/lb cif China on 15 September, unchanged from a week earlier because of low spot demand. Prices for 99.5pc grade lithium carbonate were assessed at 37,000-41,000 yuan/t ($5,466-6,057/t) ex-works today, unchanged since 8 September. Large producers focused on fulfilling orders from the lithium iron phosphate battery sector.