The largest nickel trader in China ranks fourth in global trade volume on the Hong Kong Stock Exchange.

Ningbo Liqin Resources Technology Co., Ltd. (hereinafter referred to as Liqin Resources) submitted its form to the Hong Kong Stock Exchange on Tuesday night, with China International Capital Corporation and China Merchants International as co-sponsors.

Liqin Resources is one of the world's leading nickel industry chain service providers, and the company is currently the largest nickel resource trader in China. The company's nickel resources supply channels throughout the Philippines, Indonesia, New Caledonia, Turkey, Guatemala and other countries, and with a number of international well-known nickel suppliers to establish a good and close cooperative relationship.

According to the burning knowledge report, in the field of nickel product trade, the company's nickel ore trade volume ranked fourth in the world in 2020 and first in China. In terms of nickel smelting, the company invested with Indonesia's Khalida Group in 2018 to build a high-pressure acid leaching (HPAL- nickel wet smelting) nickel and cobalt smelting plant on OBI Island, North Maluku Province, Indonesia. At present, the "HPAL Nickel-Cobalt Project" is the first nickel wet smelting project completed and reached production in Indonesia, and it is also a major construction project of "Belt and Road Initiative" in Zhejiang Province.

Starting from 2021, Liqin Resources will continue to build the RKEF fire nickel smelting project on OBI Island, and 20 nickel-iron production lines are expected to be put into production from 2022 to 2024.

At present, Liqin Resources has a relatively complete product and service system, and its business covers many industrial links, such as upstream nickel resource integration, nickel product trade, smelting production, equipment manufacturing and sales, etc. at the same time, the products are widely used in new energy vehicles, steel and other downstream fields.

In 2019, 2020 and the nine months ending September 30, 2021, the revenue from power resources was about 9.347 billion, 7.755 billion and 8.287 billion yuan respectively, while the profits in the same period were about 567 million yuan, 518 million yuan and 415 million yuan respectively.

The rapid growth of new energy vehicles drives the demand for nickel

Under the background of the rapid development of the global new energy vehicle market, nickel has become the focus of the market in recent years.

In the future, with the development trend of ternary and high nickel of power battery, the demand for nickel in the market will further increase. Pan Wenyi, chief business officer of BHP Billiton, previously said that according to statistics, the demand for nickel in battery manufacturing will increase more than fivefold in the next decade, mainly to support the world's growing demand for electric vehicles. Cobalt, as another key raw material of lithium-ion battery, will be gradually replaced by nickel because of its relatively high price.

At the same time, power batteries account for about 35% of the cost structure of new energy vehicles, while cobalt accounts for about 11% of the power cells and 6% of the power battery pack. Compared with cobalt, the cost of nickel is relatively low, and it also has advantages in increasing battery capacity and prolonging battery life.

Indonesia is rich in nickel deposits.

The prospectus also mentions the HPAL nickel-cobalt project carried out by Liqin Resources in Indonesia. Indonesia is rich in some energy and mines, including nickel mines.

Compared with other countries, Indonesia has the largest nickel reserves. According to statistics, Indonesia accounts for 52% of the world's total nickel reserves.

This huge reserve has attracted more and more companies related to new energy vehicles into Indonesia. Ningde Times, for example, announced in December that it would invest $5 billion (32.7 billion yuan) in a lithium battery factory in Indonesia, which is expected to start production in 2024.

The funds raised by Liqin Resources are planned to be used for the development and construction of nickel production projects in India, including HPAL Phase III project and RKEF Phase II project; capital injection into CBL (joint venture between Liqin Resources and Ningde Times New Energy Technology Co., Ltd.), which will focus on the development and construction of new energy car battery projects; equity investment in nickel resources in Indonesia.

Author: Hu Jiarong

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