Spend $380 million to build a lithium carbonate plant! Zijin Mining rose more than 5% in intraday trading [SMM News]

SMM, Feb. 7: according to recent media reports, China Zijin Mining will, through its local subsidiary Liex S.A. Invested US $380 million to build a lithium carbonate plant in Argentina. The Argentine government said the plant, located in the 3Q Salt Lake Lithium Project in the northern province of Catamaca, aims to produce 20,000 tons of lithium carbonate a year. Construction of the plant is scheduled to begin this year and production will begin by the end of 2023.

Stimulated by the news, Zijin Mining shares hit a low and rebounded today, with a peak of more than 5% at one point in intraday trading.

It is worth mentioning that Zijin Mining also plans to make other important investments in Argentine gold and copper and is looking for advanced projects for this purpose.

In fact, this is not the first layout of Zijin Mining in the field of new energy. In October 2021, Zijin Mining also acquired all outstanding shares of Canadian lithium salt trader Neo Lithium for a total consideration of about C $960 million in cash at C $6.50 per share. At that time, the chairman of Zijin Mining also admitted that, Neo Lithium's 3Q Lithium Salt Lake project in Catamaka, Argentina was one of the largest and highest-grade projects of its kind in the world. The 3Q project is an important complement to Zijin's growing global portfolio, and it is a good choice for Zijin to enter the field of new energy minerals.

On the evening of January 26, Zijin Mining announced that after more than three months of steady progress, Zijin Mining has now completed the delivery of 100% equity mergers and acquisitions of Canada's Xinli company. The core asset of New Lithium is the Tres Quebradas Salt Lake project in Catamaca province in northwestern Argentina, and the company will start construction of the project as soon as possible to achieve the goal of putting the first phase of the project into production by the end of 2023.

According to public data, the 3Q project, located in the famous "lithium triangle" in South America, is one of the best lithium salt lake resources in the world. According to the latest feasibility study data, the project has a total lithium carbonate equivalent of about 7.63 million tons (lithium ion concentration boundary grade 400mg/L), of which the reserves are 1.67 million tons, accounting for 31% of the proven + control resources.

The first phase of the project is designed to produce 20,000 tons of battery-grade lithium carbonate per year and is expected to be completed and put into production by the end of 2023. It is reported that the project has previously carried out a preliminary study with an annual output of 40,000 to 60,000 tons of lithium carbonate. In the future, Zijin Mining will comprehensively strengthen its technical research on production expansion, put forward a technical transformation and expansion plan in a timely manner, and achieve the new production target as soon as possible.

Referring to battery-grade lithium carbonate, Guosheng Securities said that with the acceleration of global electrification into cities, concentrated production capacity and limited spot supply of ores and salt lakes at home and abroad, the superimposed overseas epidemic caused labor shortage, and the supply of lithium mines in Australia was lower than expected. under the background of the continuing tight supply and demand structure, the premium of lithium resources has increased, and the price of lithium salt is expected to remain high.

SMM research shows that during the Spring Festival, the lithium market is mainly stable, some downstream still have inquiries, but only a few. After the festival, domestic lithium carbonate maintenance enterprises have gradually returned to normal production since mid-February, and the supply will increase. However, taking into account the reduction in the number of monthly production days in February, lithium carbonate production is expected to be about 18750 tons in February 2022, down 1 per cent from a month earlier and up 52 per cent from a year earlier. "View details

As of February 7, the spot price of SMM showed that the average spot price of domestic battery-grade lithium carbonate was 364000 yuan / ton, up 86000 yuan / ton from the beginning of the year, or as high as 30.94%.

"Click to view the spot historical price of SMM new energy products.