A lithium producer for carmakers including BMW and Tesla is beginning work to assess battery metals projects in Xinjiang, deepening links between electric vehicle supply chains and a region at the heart of human-rights allegations against China.

Ganfeng Lithium, China¡¯s top producer of the material, is partnering through a subsidiary with a state-backed entity to accelerate exploration for and potentially develop lithium, nickel and other critical metal assets in the region. Ganfeng¡¯s Chairman Li Liangbin earlier this year visited Xinjiang ¡ª where activists and Western governments say Uyghurs and other Muslim citizens have been subjected to forced labor ¡ª to discuss cooperating with the local government on the plans.

Electric vehicle (EV) makers already face criticism over labor concerns and environmental damage tied to the extraction of metals used in their products. The deepening connection between Ganfeng and Xinjiang is set to draw more scrutiny from investors and consumers. Ganfeng said in November it had won a new three-year deal to provide battery-grade lithium hydroxide products to Tesla, and has previously disclosed other contracts with companies including BMW.

Xinyu-based Ganfeng prioritizes ¡°the importance of environmental protection, social responsibility and corporate governance,¡± which includes defending employee rights, the company said in a statement.

In Xinjiang, ¡°the resource is at an early stage of exploration and it¡¯s currently uncertain whether there¡¯s suitable projects available for future development,¡± Ganfeng said. The company pursues a strategy of having projects in multiple countries to help limit the impact of extracting lithium excessively in any single location, it said.

Representatives for Tesla in China declined to comment. Ganfeng supplies BMW with lithium from mines in Australia and hasn¡¯t informed the company about its Xinjiang venture, the German automaker said in a statement.

The U.S. and its allies have sanctioned individuals and entities with ties to Xinjiang and curbed some imports from the region over concerns about human rights breaches and the alleged use of forced labor. China has repeatedly denied the accusations, with Chinese Foreign Ministry spokesman Zhao Lijian previously describing the accusations as ¡°the lie of the century.¡±

Ties to Xinjiang-exposed suppliers are becoming more problematic for a swathe of industries. The Uyghur Forced Labor Prevention Act, which came into force in the U.S. in June, will block imports unless companies can prove they weren¡¯t made with forced labor. Already, some solar products have been halted over questions about the source of their raw materials.

Ganfeng¡¯s plans to expand in Xinjiang risk drawing Tesla closer to the controversy over human rights in the region. They also threaten to complicate its strategy in China, where a Shanghai factory manufactures vehicles for the world¡¯s top EV market and also for export to Europe and...