Yuxi City is building a lithium battery “club”. On February 16, relevant companies jointly announced that Huayou holdings, the controlling shareholder of Yunnan Yuntianhua Co.Ltd(600096) (600096. SH), Yunnan Energy New Material Co.Ltd(002812) (002812. SZ), Eve Energy Co.Ltd(300014) (300014. SZ) and Zhejiang Huayou Cobalt Co.Ltd(603799) (603799. SH), signed a cooperation agreement on the whole industry chain project of new energy batteries with Yuxi City, with a total investment of 51.7 billion yuan in the first two phases of the project.
Yuxi City has been able to “call friends” and its confidence may come from its undervalued lithium mineral resources. According to the financial Associated Press reporter from Yunnan investment promotion network, the lithium oxide resources of xiaoshiqiao (hereinafter referred to as “xiaoshiqiao lithium mine”) in Hongta District of Yuxi City are as high as 4.89 million tons. At the moment of “solving the problem of resource guarantee, we can effectively expand production capacity” in the lithium battery industry chain, It’s definitely tempting.
51.7 billion around lithium battery
The announcement shows that the four companies, as Party B, signed a cooperation agreement on the whole industrial chain project of new energy batteries with Party A Yuxi City (hereinafter referred to as the “industrial agreement”), and the parties agreed to jointly mine mineral resources, carry out deep processing of minerals, jointly develop, produce and sell new energy batteries and upstream and downstream materials of new energy batteries, and promote the construction of new energy battery industrial chain, Jointly promote the formation of a 100 billion level new energy battery industry chain cluster in Yuxi City.
The main projects of the industrial agreement include “cooperative development project of mineral resources” and “construction of supporting projects such as battery, isolation membrane and battery anode and cathode materials” (hereinafter referred to as “battery and supporting projects”).
Among them, the mineral resources cooperative development project has established two companies, one mainly engaged in mineral resources development and the other mainly engaged in mineral deep processing. The basic equity structure of the two joint ventures is: Yuxi Municipal government or its formulation body holds 23% and is the largest shareholder; The shareholding ratios of Yunnan Energy New Material Co.Ltd(002812) , Eve Energy Co.Ltd(300014) , Huayou holdings and Yunnan Yuntianhua Co.Ltd(600096) are 22%, 20%, 18% and 17% respectively.
The battery and supporting projects are planned to be invested in three phases. The first phase of the project promises to invest about 18.05 billion yuan, which will be completed by December 31, 2023, the second phase of the project promises to invest about 33.65 billion yuan, which will be completed by December 31, 2025, and the third phase of the project is planned to be completed by 2030. The first and second phases of the project total 51.7 billion yuan, which will be directly established by Party B.
In principle, the project company whose main business involves one party’s advantageous industry should lead the project, and other parties (including Party A or its designated investor) can choose to participate in the project appropriately.
It is reported that Yunnan Yuntianhua Co.Ltd(600096) as a phosphorus chemical giant, has planned a 500000 T / a iron phosphate project; Huayou holding’s Zhejiang Huayou Cobalt Co.Ltd(603799) is the leader of the global cobalt industry; Diaphragm leader Yunnan Energy New Material Co.Ltd(002812) China’s diaphragm market accounts for 39%; In Eve Energy Co.Ltd(300014) 2021, China Shipbuilding Industry Group Power Co.Ltd(600482) battery loading volume was 2.92gwh, ranking eighth.
In addition, Shandong Fengyuan Chemical Co.Ltd(002805) (002805. SZ) has long been in the Bureau. In January this year, the company disclosed that it plans to invest in the construction of 200000 ton lithium battery high-energy cathode material project and supporting construction of lithium salt and iron phosphate projects of corresponding scale within the jurisdiction of Yuxi City, Yunnan Province, which will be completed by stages by 2025. Among them, phase I includes a pilot test line with an annual output of 50000 tons of lithium iron phosphate cathode material and 1000 tons of clay lithium extraction.
Yuxi City “meet friends by mining”
The tight supply of power batteries has become one of the reasons for the limited production capacity of popular new energy vehicle brands, while the spearhead of the tight supply of power batteries is directed at the upstream lithium mine. Even Contemporary Amperex Technology Co.Limited(300750) (300750. SZ) has no way to “increase the price of raw materials (lithium) in the short term”.
At present, China’s lithium resources are mainly mica in Jiangxi, spodumene in Sichuan and salt lakes in Qinghai Tibet, but the market may underestimate the lithium resources in Yuxi City.
According to the reporter’s access to Yunnan investment promotion network, the prediction of xiaoshiqiao lithium mine through scientific research demonstration exploration shows that under the 3800 square kilometers of land in Central Yunnan, the lithium oxide resource is as high as 4.89 million tons, and the deposit is carbonate clay lithium.
Image source: screenshot from Yunnan investment promotion network
If the conversion coefficient of lithium oxide and lithium carbonate equivalent LCE is 1:2.47, the lithium carbonate equivalent LCE of xiaoshiqiao lithium mine is as high as 12.07 million tons, accounting for about one quarter of the national total, which is a world-class lithium mine. Li Shihua, director of Yuxi science and Technology Bureau in the early stage, said, “according to the data obtained from previous scientific research and exploration, the average grade of lithium ore in Central Yunnan is about 0.3%, up to 1.02%. According to the relevant evaluation standards, the average grade of 0.2% is of economic mining value.”
However, lithium ore is only one of them, Shandong Fengyuan Chemical Co.Ltd(002805) said that Yuxi also has phosphate and nickel resources. At present, there is a certain scale of production capacity of yellow phosphorus, phosphoric acid, nickel hydroxide and nickel, as well as ironmaking production capacity. It is worth mentioning that in the battery and supporting projects, Yunnan Yuntianhua Co.Ltd(600096) said that the company’s investment was started after Party A was approved as a chemical park and Yunnan Yuntianhua Co.Ltd(600096) obtained the corresponding phosphate rock resources according to law and regulations.
Huaan Securities Co.Ltd(600909) researchers related to new metal materials told the financial associated press that most lithium salt enterprises in China are mainly engaged in lithium salt processing, so most of them face the problem of raw material gap. Only by solving the problem of resource guarantee can we effectively expand production capacity and improve market share and profitability in the rapid development of lithium battery industry. “Mining” or Yuxi City can attract many lithium industry chain giants.
Insiders said that clay lithium extraction has the advantages of short process of ore lithium extraction and cost of salt lake lithium extraction. However, at present, clay lithium extraction has not been industrialized, and the process needs to be further demonstrated.
