GE Honglin: "scientifically grasp the initiative in the development of lithium industry

At present, global climate governance has become the focus of attention all over the world, and carbon peak and carbon neutralization are increasingly becoming the national actions of more and more countries, which has given birth to the new energy industry into the fast lane of vigorous development. the penetration of new energy vehicles is increasing rapidly, and the demand for lithium-ion materials is growing explosively. In the first eight months of this year, global sales of new energy vehicles reached 3.54 million, up 147 per cent from a year earlier. In the first three quarters of this year, China's production and sales of new energy vehicles reached 2.166 million and 2.157 million respectively, an increase of 185 per cent over the same period last year, and the installed power battery reached 92GWH, an increase of 169 per cent over the same period last year. Accordingly, the demand for lithium materials has increased significantly. In China, for example, in the first three quarters of this year, the output of lithium carbonate equivalent reached 270000 tons, an increase of 49.7 percent over the same period last year, and consumption increased by 258000 tons, an increase of 95 percent over the same period last year. The production and consumption of lithium materials showed double-digit growth, of which the output of lithium iron phosphate increased by 200 percent over the same period last year.

The development of new energy vehicles is in the ascendant. The United States, Japan, the European Union and other developed countries have issued new energy vehicle penetration targets, which will be raised to 15%, 30% and 35% respectively by 2030. China's "New Energy vehicle Industry Development Plan (2021-2035)" is clear that by 2025, the sales of new energy vehicles will reach about 20% of the total sales of new vehicles. It can be predicted that for quite a long time in the future, the global new energy vehicles will maintain a trend of rapid growth, and China's new energy vehicles will strive to be in the forefront of the world, and the development of lithium resources and the supply of lithium materials will be good for a long time.

I would like to take this opportunity to talk about four points for your reference.

First, continuous innovation-driven, grasp the initiative of the core competitiveness. General Secretary Xi Jinping pointed out: "only through innovation can we strengthen ourselves and strive for the first place. We must unswervingly follow the path of independent innovation and firmly control the initiative of innovation and development in our own hands." Reviewing the road taken by the lithium industry, whether it is the development of salt lake resources, the effective utilization of lithium mica, or the rise of lithium materials, the most fundamental one is to rely on innovation. China's new energy vehicles are in the forefront of the world, but also inseparable from the support of scientific and technological progress in the lithium industry. Looking to the future, China's lithium industry must put scientific and technological innovation in a more prominent position, closely follow the development of downstream high-specific energy power batteries and solid-state batteries, and strive to break through and further improve the key core technologies and processes of products such as high-purity lithium salts and high-nickel ternary lithium battery cathode materials, so as to meet the needs of the development of new lithium energy industries in the middle and lower reaches, constantly improve product quality and cost performance, and enhance core competitiveness. To high-quality supply, to meet high-end demand, to promote high-quality development.

Second, scientifically control resources and grasp the initiative of supply chain security. Lithium is prominently listed in the catalogue of 35 key minerals released by the US Department of the Interior and the list of 30 key raw materials put forward by the European Union. On the whole, China has a large amount of lithium resources, including salt lake resources, spodumene resources, lithium mica resources and so on, and after nearly a decade of industrialization technology, remarkable progress has been made in the development and utilization of domestic salt lake lithium resources and lithium mica resources, which has laid a foundation for tamping domestic resources. However, compared with the huge demand for lithium salt consumption in China, which accounts for 2% of the world's consumption, the degree of resource protection in China is still not high. In 2020, imported raw materials accounted for 72% of China's lithium salt production structure. At the same time, whether it is solid mineral resources or salt lake resources, their resource endowments are not dominant. Therefore, the guarantee of lithium resources is still the basic issue for the sustainable development of China's lithium power industry. no matter from the national strategic level or from the specific actions of the lithium industry, we should attach great importance to the security of lithium resources and supply security. to strengthen the exploration of domestic resources and improve the efficiency of intensive and economic development and utilization of existing resources, we should make good use of both primary and renewable resources, and make good use of domestic resources. We should also make good use of overseas resources.

Third, deepen the integrated development and grasp the initiative of the smooth flow of the industrial chain. Efforts should be made to build a new pattern of double-cycle development. On the one hand, from the perspective of the industrial chain, our lithium industry is generally in the upper and middle reaches, and we need to make efforts from green, low-carbon, intelligent, information and digital. More importantly, to strengthen the docking with the middle and lower reaches, we should not only find out what the demand side needs, but also let the demand side know what we can do. Only through integration and coordination can we form a joint force, smooth the domestic cycle, and meet the requirements of the strategic starting point of expanding domestic demand and tapping the huge domestic market potential. On the other hand, China not only depends on international lithium resources, but also supplies lithium materials to the international market, and new energy vehicles have also gone abroad. In 2020, a large number of lithium hydroxide in China was exported to the international market. In the first three quarters of this year, China exported 195000 new energy vehicles, accounting for 9 per cent of the output. From this point of view, we should strive to maintain the two markets, strive to build a development pattern in which international and domestic cycles promote each other, and firmly control the fate of the industrial chain in our own hands.

Fourth, adhere to the bottom line thinking and grasp the initiative of risk prevention and control. Today, with the deep evolution of global governance, economic and social development is facing more uncertainty and instability, superimposed by the impact of COVID-19 epidemic in the century, and the risks and challenges of the development of real industries are further increasing. As far as the lithium power industry is concerned, from an international point of view, Europe, the United States and other countries emphasize building a closed-loop supply chain for new energy vehicles to reduce their dependence on Asia-Pacific lithium battery capacity, and the reconstruction of the regional industrial chain has quietly sprung up; the mining alliance led by the United States has pulled the resource-rich countries in Africa into it. Recently, resource countries such as the Democratic Republic of the Congo (DRC) and Indonesia have frequently made disharmonious noises about the cooperative development of resources in China. The Democratic Republic of the Congo, Indonesia, Australia, Chile and other resource countries have begun to aim at extending the lower reaches of the cobalt-lithium-nickel industrial chain, focusing on the development of the whole industrial chain; the ideological trend of resource nationalism, trade protectionism, unilateralism and populism is on the rise. Western countries have made great efforts to suppress the rise of China and engage in a technological blockade. These new changes will bring new impacts and new risks to the development of China's lithium electricity industry. From the domestic point of view, the competition around lithium resources is becoming increasingly fierce, and the impulse of capacity expansion in the upper and middle reaches caused by promising demand is more prominent, the cathode material is transformed to high nickel, lithium-rich and high voltage, and the battery evolves from liquid and semi-solid to all-solid state. The innovation and exploration of downstream battery process route, battery structure, system intensification and integration, BYD "blade battery", the emergence of CTP technology in Ningde era, and the accelerated research and development of other new batteries such as sodium ion battery and hydrogen fuel cell will bring more diversification of battery routes in the future. At the same time, with the rapid rise of lithium prices in a short period of time, battery-grade lithium carbonate has soared from a low of about 40,000 yuan / ton in the second half of last year to the current 180000 yuan / ton, an increase of 350%, which has brought great disturbance to the whole industry chain. what's more, we need to deal with it rationally. These new domestic situations and changes also require our lithium industry to remain vigilant. Therefore, the whole industry should closely follow the changes of the situation, keep a clear head, stick to the bottom line thinking, always tighten the string of risk prevention and control, and build a solid fence for risk prevention and control.