Yabao, the leader of global lithium resources, goes deep into the interior of China to build a factory.

As the United States has also issued a bugle to make an all-out transition to automobile electrification, the global automobile electrification has accelerated again, the market penetration of electric vehicles is growing steadily, and the market demand for lithium batteries is also quite strong, which in turn drives the demand for upstream lithium resources to blow up.

Since the beginning of this year, including mining companies, battery companies, car companies are "buying", sweeping mines around the world. As the world's largest market for electric cars, it has become the norm for Chinese companies to buy mines overseas. For now, however, overseas miners have extended their reach into the Chinese market.

On October 20, the government of Pengshan District, Meishan City, Sichuan Province signed an investment agreement with Yabao (also writing "Yabao") new era lithium battery material factory project. Yabao will invest 500 million US dollars to build an annual production base of 50,000 tons of lithium hydroxide in Sichuan Pengshan Economic Development Zone. Construction of the project is expected to start in 2022 and be completed by the end of 2024. It is reported that the project is the largest production capacity of Yabao Company of the United States in southwest China.

It is understood that Yabao New era Lithium Battery material Factory has 24 lithium power projects, such as Wanhua Chemical Industrial Park, Shanghai Jinyuansheng, Shanshan Technology, Tianhua Super Clean, and so on, with an annual production capacity of more than 700000 tons, covering the engineering application research and development of lithium-based advanced materials, transformation of technological achievements, basic lithium salt processing, production of key materials, battery production and other links.

According to the analysis of industry insiders, Yabao's investment in the construction of lithium hydroxide project in Sichuan is based on the strong demand for lithium battery materials from the rapid development of electric vehicles around the world, and the project has been settled in Sichuan. On the one hand, it is optimistic about the lithium smelting and processing technology in Sichuan, China, on the other hand, it may be optimistic about the nearby lithium ore resources. Of course, it may also be to better satisfy its Chinese customers.

The above speculation is also consistent with Yabao's statement on some public occasions this year.

With the rapid rise in global demand for lithium resources and the continued upward price of lithium products, Yabao has been looking for lithium hydroxide and lithium carbonate processing plants in China and Australia. In August this year, Yabao pointed out in a telephone call that the company focused on acquiring lithium hydroxide processing plants in China, and that if it could land, the processing plant would quickly resume production of Wodgina (Yabo's mineral project) to provide lithium concentrate resources for the processing plant.

The 50,000-ton lithium hydroxide project in Meishan, Sichuan Province, signed this time, should be one of its lithium hydroxide processing projects.

In fact, in September this year, Yabao already acquired a Chinese lithium salt company. On September 30, Yabao revealed that it would acquire Guangxi Tianyuan New Energy Materials Co., Ltd. for about 200 million US dollars, hoping to increase its lithium salt production capacity through this acquisition.

According to public data, Guangxi Tianyuan New Energy Materials Co., Ltd. currently has a capacity of 15000 tons / year for lithium hydroxide and 10,000 tons / year for lithium carbonate, as well as a capacity of 1 million tons / year for lithium mineral washing and processing. In addition, a demonstration production line for the recovery and recycling of lithium batteries of 100000 tons per year has been built.

In addition, according to media reports, Tianyuan, Guangxi, launched a project with an annual production capacity of 25000 tons of battery-grade lithium hydroxide in early 2018, which can produce battery-grade lithium carbonate and lithium hydroxide, and is expected to start commercial production in the first half of 2022.

For the acquisition, Yabao said that the acquisition of Tianyuan, which is headquartered in Guangxi, China, would expand its lithium salt production capacity and increase its lithium processing capacity in China near Qinzhou Port.

In January 2017, Yabo also completed the acquisition of Jiangxi Jiangxi Lithium New Materials Technology Co., Ltd., with a purchase amount of US $145 million. Jiangxi Jiangxi Lithium New material is also a lithium salt processing and production enterprise.

In addition, Sichuan Guorun New Materials is also Yabao's lithium salt processing and production enterprise in the Chinese market.

According to public data, Yabao, founded in 1887, is a global specialty chemicals company, leading the global market in lithium chemicals, bromine chemicals and oil refining catalysts, with operations in more than 100 countries around the world. The company's related products include lithium carbonate, lithium hydroxide, lithium metal, organic lithium compounds, special lithium salts and so on.

It is worth noting that Yabao has extremely high-quality lithium ore and salt lake lithium resources in the world. For example, the major representatives of lithium ore resources around the world are Tellyson Mine, Thacker pass Mine and Wodgina Mine, with two Yabo participating.

The global salt lake resources are mainly distributed in the Lithium Triangle of Salt Lake in South America, the western region of the United States and the Salt Lake of Qinghai-Tibet Plateau in China, of which the most famous is the Atacama Salt Lake (Atacama Salt Lake) jointly developed by SQM and Yabao, Olaroz Salt Lake in Argentina is also an important shareholder (Ganfeng, American Lithium Industry and Yabao).

According to the data, Yabao accounted for 30% of the global market share of upstream lithium products in 2020, making it the largest lithium resource supplier in the world. Ganfeng Lithium ranked second, SQM ranked third, and Tianqi Lithium ranked fourth in output. At present, Yabao's customer base includes Ningde era, LG Chemical, Panasonic Battery, Samsung SDI and other top companies in the global battery industry, as well as many well-known car companies such as Tesla.

According to 2020 data, Yabao lithium-related business accounted for 37% of its total revenue. For the future growth of demand for lithium resources, Yabao predicts that the demand for lithium will reach 1.14 million tons of LCE (lithium carbonate equivalent) by 2025, of which 85% will come from new energy vehicles and energy storage batteries.

According to the Chinese market data, the sales of new energy vehicles in China from January to September this year is about 2.157 million, an increase of 1.9 times compared with the same period last year. This year, the sales of new energy vehicles in the Chinese market is expected to exceed 3 million. In terms of power battery installed capacity, data from the Power Battery Application Branch show that the installed capacity of power batteries in the Chinese market from January to September this year is about 95.26GWhh, an increase of 178.8% over the same period last year, and is expected to exceed 140GWh for the whole year.

With the continuous and rapid growth of power batteries, the demand for lithium salt also continues to rise, resulting in the price of lithium salt continuing to rise.

Yabao said in a phone call that it hopes to acquire or build a lithium hydroxide processing plant in China. Yabao as an international lithium salt giant, the downstream customers of docking are head battery or OEM enterprises, while the head downstream enterprises have high requirements for lithium hydroxide processing quality. Backed by the world's best spodumene ore, Yabao will mainly target China, "industry analysts believe that this is a reasonable explanation: lithium hydroxide processing has a very high Know-how barrier, lithium hydroxide quality itself is not mainly affected by lithium ore grade, more important is lithium hydroxide enterprises' know-how awareness of back-end deep processing, so they hope that lithium salt processing projects will be located in China.

Secondly, Yabao has many important customers who have production bases in China, which is also convenient for nearby services.

However, some analysts pointed out that in view of the current high freight costs, lithium mines and salt lake resources in the western part of the country have begun to be developed, and Yabo does not rule out the possibility that Yabao hopes to buy mines nearby for processing and production, and then sell it to other parts of the world. "at present, major countries in the world are promoting the electrification of cars, and everyone wants to master more key materials."