Qingshan Holdings layout Lithium Industry may compete with Ganfeng and Tianqi

According to foreign media reports, Qingshan holding Group said in a company document that the company and China's Shenzhen Shengxin Lithium Energy Company will build a lithium processing plant with an annual output of 60,000 tons in Indonesia.

Aoyama Holdings is one of the recent companies to enter the "increasingly fierce competition" in the lithium industry. Aoyama Holdings has developed battery-grade nickel and cobalt production projects at its Indonesian plant, the latest lithium development project will make it a large manufacturer of three key raw materials for electric vehicles and other rechargeable batteries, and makes it possible to become an one-stop supplier of raw materials for electric vehicle batteries.

Aoyama didn't respond to a request for comment on its lithium plan, but a senior company executive said, "the battery business will be the company's new core business."

Aoyama Holdings owns 35% of the project, while Shengxin LiNeng owns 65%. The two companies will provide 30 per cent of the $350 million needed to build the factory and another 70 per cent will come from loans, according to the documents. The start date of the lithium processing plant has not yet been announced, and the plant still faces challenges. An executive at Shengxin Lithium Energy said the plant needs 450000 tons of lithium concentrate a year, all of which comes from hard rock lithium ore.

Unlike the nickel and cobalt deposits found around Aoyama Holdings' factories in Indonesia, no known lithium deposits have been found in Indonesia, meaning the two companies need to look overseas for supplies of lithium-rich minerals such as lithium mines to meet plant demand.

"the competition for spodumene concentrate is likely to be very fierce," said Allan Pedersen, an analyst at Wood Mackenzie, an energy consulting firm. " Sheng Xin LiNeng said it would "work with partners to ensure the supply of raw materials for the plant". Sheng Xin LiNeng points out that the company has recently expanded its upstream resource base through acquisitions in Argentina and Zimbabwe. Sheng Xin LiNeng also has a stake in a Chinese mining company that is exploring a lithium mine in Sichuan province.

After partnering with French company Eramet, Aoyama Holdings aims to produce 24000 tons of lithium carbonate a year in Argentina and will work with Jiangsu Dragon Technology to produce lithium iron phosphate battery materials in Indonesia.

Experts say Indonesia's proximity to Australia will also help. Australia is currently the world's largest supplier of spodumene and is expected to account for 51 per cent of the increase in global lithium raw material supply between 2020 and 2025, said Alice Yu, an analyst at S & P global market intelligence.

Aoyama Holdings shocked the nickel industry by rapidly increasing Indonesia's nickel production. As a result of taking the lead in the use of low-grade nickel pig iron, Aoyama Holdings became the world's largest nickel producer in 2018. Aoyama Holdings has planned with other Indonesian partners to produce at least 230000 tons of battery-grade nickel and about 27000 tons of cobalt per year. When the planned lithium processing plant goes into production, Aoyama Holdings will have a large supply of nickel, cobalt and lithium.

Gavin Montgomery, director of Wood Mackenzie, said: "it is not known whether they can challenge the five giants in the lithium field, but Aoyama Holdings should not be underestimated." The five giants he refers to in the lithium field are Albemarle Corp, Ganfeng Lithium Industry, Chilean Chemical Mining (SQM), Tianqi Lithium Industry and Livent.