The lithium race track is hot, and the lithium resources in the upstream have become a “sweet cake”.
The subscription agreement of lithium International Co., Ltd. (hereinafter referred to as “UltraChem”) was signed on July 18 with its wholly-owned subsidiary, UltraChem International Co., Ltd. (hereinafter referred to as “UltraChem”). The latter has a number of lithium resources.
In fact, in addition to Sichuan Yahua Industrial Group Co.Ltd(002497) , listed companies such as Zangger mining ( Zangge Holding Company Limited(000408) . SZ), Ganfeng Lithium Co.Ltd(002460) ( Ganfeng Lithium Co.Ltd(002460) . SZ), Zijin Mining Group Company Limited(601899) ( Zijin Mining Group Company Limited(601899) . SH) have also focused on lithium mines. “From a technical point of view, China’s lithium extraction technology is leading. The difference between China’s lithium resources and overseas resources is mainly reflected in the grade of resources. The grade of China’s lithium ores is low, which virtually increases the extraction cost. However, based on the current lithium salt price, China’s lithium extraction industry has sprung up.”
strong market demand
At present, China has become the world’s largest new energy vehicle market for many consecutive years. According to the statistics of China Automobile Industry Association, in March 2022, the sales volume of Shanxi Guoxin Energy Corporation Limited(600617) vehicles was 484000, with a year-on-year increase of 114.1%. In the first quarter of 2022, the sales volume of new energy vehicles reached 1257000, a year-on-year increase of 138.6%.
On April 19, the Information Office of the State Council held a press conference. Luo Junjie, director of the operation monitoring and Coordination Bureau of the Ministry of industry and information technology, said that the development of China Shanxi Guoxin Energy Corporation Limited(600617) automobile industry has achieved positive results. 10.33 million vehicles have been promoted, breaking the 10 million mark, and has become an important force leading the electric transformation of the global automobile industry.
Benefiting from this, there is a strong demand for power batteries located upstream of the industrial chain. According to the research data of China automotive power battery industry innovation alliance, the output of China Shipbuilding Industry Group Power Co.Ltd(600482) battery in 2021 was 219.7gwh, with a year-on-year increase of 163.4%, of which the output of lithium iron phosphate battery was 125.4gwh, accounting for 57.1% of the total output, with a year-on-year increase of 262.9%.
At the same time, in the context of carbon neutrality, wind power, photovoltaic and other renewable energy also ushered in great development. However, due to the intermittent characteristics of wind and light resources, energy storage technology is needed to cut peaks and fill valleys and reduce power grid fluctuations. Therefore, the energy storage industry has also entered a period of development opportunities.
As one of the ways of energy storage, lithium battery has attracted extensive attention in the market. According to the prediction of the Institute of lithium battery research (GGII), the shipment volume of energy storage lithium batteries in China will reach 180gwh at the end of the 14th Five Year Plan period, with a five-year compound growth rate of more than 60%.
The rapid growth of market demand makes lithium battery enterprises earn a lot.
In 2021, Contemporary Amperex Technology Co.Limited(300750) with an installed capacity of 96.7gwh, occupied 32.6% of the global lithium battery market, with a year-on-year increase of 167.13%. The performance forecast for 2021 shows that it is expected to achieve a net profit of 14 billion yuan to 16.5 billion yuan, with a year-on-year increase of 150.75% to 195.52%.
Ganfeng Lithium Co.Ltd(002460) previously released financial report for 2021 showed that its net profit was 5.228 billion yuan, an increase of 410.26% year-on-year. In addition, Tianqi Lithium Corporation(002466) in 2021, which was previously constrained by the debt problem, also turned losses into profits.
layout of overseas lithium mines
While the performance of lithium battery company is improving, it is also facing “happy troubles”. With the continuous popularity of the lithium battery track, the market demand for upstream lithium resources surged.
According to the assessment report of global lithium, cobalt, nickel, tin and potassium mineral resources reserves (2021) issued by the global mineral resources strategic research center of China Geological Survey, by the end of 2020, the global lithium ore (lithium carbonate) reserves were 128 million tons and the resources were 349 million tons, mainly distributed in Chile, Australia, Argentina, Bolivia and other countries.
In terms of the current global supply structure of lithium resources, lithium mines in Australia and salt lakes in South America are the main supply forces. In terms of morphological distribution, global salt lake lithium, ore lithium and clay lithium account for 58%, 26% and 7% respectively; In terms of geographical distribution, Chile and Australia account for 44% and 22% of the global proven lithium reserves respectively. Among them, Australia’s lithium ore has advantages in resource quantity and grade.
In this context, Chinese enterprises have embarked on the road of gold digging outside Shanghai.
According to Sichuan Yahua Industrial Group Co.Ltd(002497) the above announcement, it plans to invest $5 million to subscribe for 13.23% equity of super lithium company at the price of $0.235 per share. At the same time, Yahua international invested in cash to acquire 60% of the equity of the wholly-owned subsidiary of super lithium company, and controlled its Fugen lake hard rock spodumene lithium mine project and Georgia lake hard rock spodumene lithium mine project.
Sichuan Yahua Industrial Group Co.Ltd(002497) this move is intended to the lithium resources of super lithium company. It is understood that ultra lithium has a mining license for Laguna Salt Lake project in Catamarca Province, Argentina, and hard rock spodumene lithium mines in Lake Georgia and lake Fugen in Northern Ontario, Canada.
Sichuan Yahua Industrial Group Co.Ltd(002497) people told reporters: “at present, China’s lithium battery market continues to improve. The company’s move is intended to increase the company’s upstream lithium resources. In the future, the company will continue to pay attention to lithium salt resources.”
Public information shows that in addition to Sichuan Yahua Industrial Group Co.Ltd(002497) , companies such as Ganfeng Lithium Co.Ltd(002460) , Zangger mining, Zhejiang Huayou Cobalt Co.Ltd(603799) ( Zhejiang Huayou Cobalt Co.Ltd(603799) . SH) have also made frequent actions on overseas lithium resources.
On February 9, Zangger mining announced that it and super resources Co., Ltd. (hereinafter referred to as “super resources”) carried out investment cooperation on the Argentine Laguna Verde Salt Lake Lithium project with 100% equity held by super resources based on the principle of complementary advantages and win-win cooperation Zhejiang Huayou Cobalt Co.Ltd(603799) announced in December 2021 that it planned to acquire the equity of Zimbabwe prospect lithium mining company with a total price of US $422 million.
the rise of Chinese market
From the layout of lithium salt industry, it is not difficult to find that overseas lithium resources are favored by Chinese enterprises.
“China is rich in lithium resources, but at present, the lithium resources used by Chinese lithium battery enterprises mainly come from spodumene resources in Australia and lithium extraction from salt lakes in Chile,” Merco told reporters
Industry insiders said that at present, China’s lithium battery manufacturers rely on the resources of overseas lithium mines to 85%. This figure is even higher than the external dependence on oil. Although overseas lithium salt resources are endowed well, they also face the risk of over dependence.
In fact, China’s lithium reserves also have their own advantages Sichuan Yahua Industrial Group Co.Ltd(002497) china’s salt lake resources have the advantages of stable policies and low transportation costs
In Moke’s view, the core restricting China’s lithium mining is the cost problem. “From a technical perspective, China’s lithium mining enterprises are leading in lithium extraction technology. The difference between China’s lithium salt resources and overseas is mainly reflected in the grade of resources. The grade of China’s lithium ores is low, which virtually increases the extraction cost. However, based on the current lithium salt price, China’s lithium extraction industry has sprung up.”
The reporter noted that with the rise of the lithium battery market and the high price of lithium salt, the layout of China’s lithium industry is accelerating.
According to the development plan of lithium battery industry in the 14th five year plan of Suining City, by 2025, the annual basic lithium salt production capacity of Suining City will reach more than 200000 tons, and the production scale of metal lithium will reach more than 20000 tons; More than 800000 tons of positive material and more than 500000 tons of positive material precursor; More than 200000 tons of negative electrode materials, more than 1 billion square meters of diaphragm, more than 100000 tons of electrolyte, more than 3 billion square meters of battery collector, and more than 50000 tons of various additives, additives and adhesives.
In addition, Yichun City proposed to build a “lithium capital of Asia” as early as 2009 because of its rich lithium bearing porcelain clay resources. At present, Contemporary Amperex Technology Co.Limited(300750) , Gotion High-Tech Co.Ltd(002074) and other lithium battery manufacturers have built factories in Yichun. As of December 2021, Yichun has 118 new energy (lithium battery) industry chain enterprises (including 100 enterprises above Designated Size) and 24 projects under construction.
On February 14, Contemporary Amperex Technology Co.Limited(300750) announced that its subsidiary Sichuan times new energy resources Co., Ltd. signed a joint venture agreement with Ganzi investment group, Yibin Sanjiang Huida company and Sichuan Tianfu Mining Company in Chengdu Contemporary Amperex Technology Co.Limited(300750) said that according to the agreement, all parties will carry out all-round cooperation on the premise of meeting the national strategic mineral security, accelerate the exploration and development of lithium resources in the province, increase the supply of lithium resources, promote comprehensive utilization in a scientific and orderly manner, promote the coordinated development of the whole industrial chain of new energy, and provide important support for the development of trillion power battery industry in Sichuan Province.
Referring to the layout and control of upstream lithium resources, Contemporary Amperex Technology Co.Limited(300750) said that in addition to its previous overseas investment cooperation, it also invested in Yichun and other places to mine lithium minerals by itself.
Sichuan Yahua Industrial Group Co.Ltd(002497) people told reporters: “the company has arranged lithium resources in China, mainly focusing on spodumene resources in Lijiagou, Jinchuan county.”
Today, Qinghai Province, which has the most abundant lithium resources in salt lakes in China, is also supporting the development of lithium industry. Public information shows that in order to achieve the goal of “expanding the scale of lithium industry, releasing the capacity of lithium carbonate and improving the level of lithium battery industry”, Qinghai Province will set up a salt lake industry development fund and introduce a number of high-tech leading enterprises to promote the strength of salt lake industry clusters.
