Xi'an Lanshen will employ its proprietary direct lithium extraction (DLE) technology, and the plant will be capable of producing up to 3,000 tonnes per annum of battery-grade lithium carbonate, Lithium Energy said in a statement.

While DLE technologies vary, they are comparable to common household water softeners and aim to extract about 90% or more of the lithium from brines, compared to about 50% using ponds.

Under the terms of the deal, Lanshen will supply, build and initially operate the plant at its own cost, while Lithium Energy will be responsible for securing all necessary approvals and permits.

The companies are targeting the plant's commissioning by the second half of 2024, and Lithium Energy also has the right to purchase the plant once constructed.

(Reporting by Jaskiran Singh in Bengaluru; Editing by Jonathan Oatis and Jamie Freed)