The "flames of war" of the lithium industry chain have been transmitted from downstream lithium batteries to upstream lithium salts. The top three domestic A-share listed companies in 2020 are Ganfeng Lithium Industry (002460.SZ), 002497.SZ Group and Tianqi Lithium Industry (002466.SZ). In addition to the above-mentioned "three overlords", the lithium industry is also full of princes.
In the lithium industry ushered in a rebound in prosperity on the basis of lithium stock prices last week, "jump up and down", and put aside the mood to control the stock price to return to the nature of the company, which company will eventually "dominate"?
Because the development conditions of different mines or salt lakes are different, the production capacity is not replicable, the expansion cycle is long, and the capital expenditure is large, the acquisition and control of lithium resources are becoming more and more difficult. Therefore, lithium resources will become a key factor restricting the development of the industry in the medium and long term. In the long run, the bargaining power of lithium resources enterprises and the status of the industry chain will continue to improve.
Judging from the current strategic layout of lithium resources, among the clear equity reserves, Ganfeng Lithium Industry deserves to be the leader with 23.32 million tons (due to the company's non-disclosure of lithium reserve data, temporarily converted to lithium resources). Tianqi Lithium Industry followed with 16.07 million tons, the above two companies sit on the world's highest quality lithium resources through the layout at home and abroad, while Ya Hua Group mainly relies on Yinhe Mining to import lithium concentrate.
Tianqi lithium industry currently has two of the best lithium resources, accounting for about 25 per cent of the world's supply of Terlison in Australia and SQM, in Chile. And Terlison's Greenbush mine has a higher average lithium oxide grade of 2.1%, and due to years of mature operation, the project's chemical-grade lithium concentrate production and operating costs are among the lowest in the world.
SQM is the world's largest producer of lithium salt, accounting for about 27% of the global supply. Tianqi Lithium Industry through the acquisition of the Atacama Salt Lake mining rights of the SQM company 23 77% equity, the second largest shareholder of the company, has realized the strategic layout of salt lake brine lithium resources. According to a reporter from the Financial Associated Press, salt lake lithium resources are mainly distributed in the "Lithium Triangle" of South America, the western United States and the Qinghai-Tibet region of China, among which Atacama Salt Lake has the largest brine reserves and the highest grade brine lithium resources in the world.
At present, Tianqi Lithium Industry takes Tellyson, a holding subsidiary, as the main source of raw materials. Terlison's lithium concentrate products include technical grade lithium concentrate and chemical grade lithium concentrate, which are mainly sold to Terizon's two shareholders, Tianqi Lithium Industry and Yabao. Terlison has built a production capacity of 1.34 million tons / year, with a planned capacity of 1.94 million tons / year. According to the exchange minutes learned by a reporter from the Financial Associated Press, the current production capacity of Terlison Phase I can meet the needs of Tianqi Lithium Industry and Yabao, and the subsequent capacity release depends on the launch of the new lithium salt production capacity.
To address the financial costs of the merger and acquisition of SQM, Tianqi Lithium introduced IGO, which will pay $1.4 billion for a 49 per cent stake in Tianqi's wholly-owned subsidiary TLA (formerly Tianqi UK). It is worth noting that the deal is a "mine package", which includes not only Eiffield and Tellyson, but also the Quinana lithium hydroxide plant, which is owned by TLK. After the completion of the above transaction, Tianqi will leave about 26 per cent of Tereson (51 per cent before the transaction) and 51 per cent of TLEK51 per cent.
Although IGO, as a traditional mining company, has extensive experience in mining development or greatly supports Tylison to further improve its efficiency, the agreement also makes it clear that the lithium concentrate purchased by TLK from Tylison will meet the TLK demand first, while the surplus will meet the domestic plant and contract processing needs of Tianqi Lithium Industry. Fortunately, products sold to China can only be sold through the existing domestic sales team of Tianqi Lithium Industry.
Ganfeng lithium industry also has lithium resources. Its 51 per cent-owned Cauchari-Olaroz project is located in the lithium salt lake of (Jujuy), in the northwestern province of Hohoi, Argentina. LCE, which contains about 24.58 million tons of lithium brine, is currently one of the largest salt lake lithium extraction projects in the world, supporting an annual production of more than 40, 000 tons of battery-grade lithium carbonate for 40 years. At present, the company's lithium raw materials mainly come from Mount Marion, which has an output of 400000 tons of lithium concentrate per year.
In addition, Ganfeng Lithium Co., Ltd. and Bacanora jointly own the Sonora project, with a total lithium resource of about 8.82 million tons LCE, which is currently one of the largest lithium resource projects in the world. The previous announcement shows that the wholly-owned subsidiary of Ganfeng Lithium Industry intends to offer to acquire shares in Bacanora in order to achieve complete control of the Sonora lithium clay lithium extraction project.
According to a reporter from the Financial Associated Press, under normal circumstances, the cost of lithium extraction is that spodumene is higher than clay and higher than brine. At the same time, lithium clay can not only complete the process of extracting lithium in a short time similar to the speed of extracting lithium from ores, but also complete the extraction of lithium with a similar brine process at a lower cost. At present, Ganfeng lithium industry is the only enterprise in the global lithium industry that has the industrialization technology of "extracting lithium from brine", "extracting lithium from ore", "extracting lithium from ore" and "mining lithium clay" at the same time.
On the other hand, because the raw materials of lithium concentrate mainly rely on off-take agreements, the layout of lithium resources is "backward", which may lay the groundwork for being controlled by others in the future. A senior executive of a listed company on the lithium end told the Financial Associated Press that domestic lithium resources are in great demand at present, and companies that hold lithium resources are generally used for self-supply, rather than "giving opportunities to competitors".
According to the reporter's follow-up, Ya Hua Group last year hoarded enough low-cost lithium concentrate for more than half of this year, and at present, the increase in lithium concentrate prices has not yet exceeded the increase in product prices, so short-term cost pressure can be controlled.
On the other hand, the changes in Sino-Australian relations have also made investors worried about resources in Australia, especially since the above-mentioned companies currently mainly source lithium raw materials from Australia. Some people in the industry say that they are not anxious. The basic logic is that the processing of Australian lithium concentrate is mainly in China, and if export is banned, then local Australia will stop production because it cannot be digested, which is not the best solution for the Australian government.
Chile, Australia and Argentina together account for about 75% of the world's lithium reserves, according to the China Lithium Industry Development report released by the Lithium Branch of the China Nonferrous Metals Industry Association. Due to the distribution of resources, Australia is still the largest supplier of lithium ore, accounting for about 90% of the world's lithium ore supply and 44% of the world's total lithium raw material supply.
To sum up, through the comprehensive consideration of the above-mentioned companies' rights and interests resources, the richness of layout at home and abroad, and the diversity of lithium raw materials, obviously ranked as follows: Ganfeng lithium industry (23.32 million tons) > Tianqi lithium industry (16.07 million tons) > Yahua Group (underwriting agreement). However, in terms of lithium resource grade and lithium extraction cost, Tianqi Lithium Industry > Ganfeng Lithium Industry > Yahua Group. According to Roskill data, among the lithium carbonate extraction costs of the world's major lithium chemical production enterprises, Tianqi lithium industry cost is the lowest in China.
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