SMM Sept. 29th News: with the steady progress of "carbon peak, carbon neutralization", the lithium industry has undoubtedly become one of the most prosperous industries this year. With the soaring price of power battery raw materials, many power battery companies have begun to layout upstream lithium ore resources. The Ningde era of the leading domestic power battery enterprises is no exception.
On September 27th, it was reported that Suzhou Tianhua Times New Energy Industry Investment Co., Ltd., a Ningde time shareholding company, invested $240 million in Manono, a lithium project of Australian mineral exploration company AVZ Minerals. After the investment, Tianhua Times acquired a 24% stake in the project.
It is worth mentioning that the Manono project is one of the hard rock lithium deposits with the largest reserves and the highest grade found so far. The proved resources are as high as 269 million tons, and it is estimated that the lithium reserves are up to 400 million tons, of which the lithium oxide grade is 1.65%, which is at a high level. AVZ had previously estimated that the design capacity of the Manono project would include an annual production capacity of 700000 tons of lithium oxide with a design life of up to 20 years.
It is reported that the project is expected to be completed and put into production in 2023. AVZ Mining Company plans to complete the shipment of the first batch of lithium concentrate products in the first quarter of 2023 and the first batch of lithium sulfate products in the third quarter of the same year. Therefore, taking a stake in the lithium mining project means that the Tianhua era will have an adequate supply of lithium resources in the future.
According to Tianhua data, Tianhua era is jointly owned by itself and Ningde era, and Tianhua era invested in the development of Manono project. After AVZ verified the development cost, it found that the funding provided by Ningde era will exceed 400m US dollars.
The pace of the layout of lithium resources in Ningde era obviously does not stop there. It is reported that on Tuesday local time, Canadian lithium company Millennial LithiumCorp said that Ningde era bought a 100% stake in its company for C $377 million, or about 1.9 billion yuan. The Ningde era also made it clear that the news was true.
It is reported that, Millennial LithiumCorp has two world-class lithium salt lake projects in Argentina and is rich in lithium resources. Ningde Times commented that the acquisition is an important measure in the layout of the company's supply chain and will further ensure the long-term and stable supply of lithium raw materials in the Ningde era in the future.
In addition, as early as September 2020, the Ningde era also invested C $8.58 million in Canadian mining giant Neo Lithium, which is not difficult to see that the Ningde era has a long history of the layout of upstream lithium resources.
And Ningde era's active layout of upstream lithium resources is also reasonable. After all, as a well-known power battery giant in China, if there is no stable supply of resources, the rise in raw material prices will more or less have an impact on the company's operating costs.
In the past two months, the average spot price of battery-grade lithium carbonate, one of the raw materials for power batteries, has reached 173500 yuan per ton, up 86000 per ton from the beginning of July, or 98.3 per cent in just two months. Battery-grade lithium hydroxide followed, with an average spot price of 168000 yuan / ton as of Sept. 28, an increase of 78.7% in two months.
"Click to view the spot market of SMM metal.
Southwest Securities had previously estimated that the global demand for lithium carbonate would be about 861000 tons by 2025, but according to SMM research, there has been a 14% gap in domestic lithium carbonate since August. SMM expects that the supply of lithium carbonate market will continue to fall short of demand until the end of this year.
Recently, due to the impact of power cuts in many areas of the country, the production of lithium materials has been seriously reduced. According to SMM research, some cathode material enterprises said, "the current round of power cuts has objectively affected the overall daily production and marketing of some enterprises, resulting in a serious decline in output and delayed delivery of orders, but from the perspective of the industrial chain, it also weakens the demand for downstream raw materials, and to a certain extent, it can also make the industry return to rationality." "View details
For the impact of this round of power cuts, SMM will continue to track. Getting back to the point, under the favorable background that new energy vehicles are becoming more and more popular and many countries have issued policies to support the development of the electric vehicle industry, the future of the lithium industry is still worth looking forward to. Therefore, for the Ningde era, the active layout of upstream lithium resources is also a very important step to strengthen the layout of the supply chain.
