Lithium Iron Phosphate Contract Negotiations Underway at End of March, Significant Improvement in Order Outlook Expected [SMM Weekly Review]

SQM reported Q2 2026 net income of $660.0 million, up 646.4% year-on-year, on revenue of $2,468.4 million (+136.7% YoY) and gross profit of $1,260.0 million, versus $253.0 million a year earlier. Lithium carbonate equivalent (LCE) sales volumes hit a record 84,100 tonnes, up 59% year-on-year and roughly 22% quarter-on-quarter (from ~69,000 tonnes in Q1 2026). Novandino's average realized lithium price reached ~$21.8/kg (+23% QoQ, +160% YoY); the International Lithium Division's average realized spodumene price hit ~$2,048/tonne (+40% QoQ, +160% YoY). Lithium and Derivatives segment revenue totaled $1,779.2 million, up 299.7% YoY and accounting for 78% of H1 consolidated gross profit. CEO Ricardo Ramos attributed the quarter's price gains to stronger-than-expected demand, with volumes drawn jointly from Novandino (Chile, JV with Codelco) and Covalent Lithium (Australia, JV with Wesfarmers). Novandino advanced the Salar Futuro project in July, submitting environmental and technical documentation for the roughly $3 billion, seven-year expansion of Atacama operations. SQM and Wesfarmers also confirmed an expansion of the Mt. Holland mine and concentrator, set to double SQM's attributable spodumene capacity to ~350,000 tonnes SC6% per year, with first output in 2030. SMM View: The 59% YoY volume jump reflects the depth of last year's downturn trough; the ~22% QoQ gain is the more relevant read on current momentum. With Salar Futuro advancing, Mt. Holland's expansion confirmed, and realized prices rising sequentially across both Chile and Australia, SQM's results point to continued volume and price strength into Q3 2026.

The Democratic Republic of Congo is advancing plans to establish a major battery precursor manufacturing hub in Lualaba province, positioning itself within the lithium-ion battery materials supply chain as the country seeks to move beyond raw mineral exports. The government approved the Musompo Special Economic Zone as a priority project in February 2026, marking a step toward integrating DRC's mineral base into the cathode-active-material stage of the battery value chain. From Minerals to Lithium-Ion Battery Materials: Musompo is designed to produce nickel-manganese-cobalt (NMC) precursor materials the cobalt- and nickel-bearing intermediate that is combined with a lithium source (typically lithium carbonate or lithium hydroxide) to produce NMC cathode-active material, one of the two dominant lithium-ion battery chemistries alongside LFP. The 900-hectare industrial zone reflects the DRC's broader strategy to capture value at the precursor stage rather than exporting cobalt in raw or intermediate form to Asian cathode producers. Scale and Investment Timeline: The zone is expected to attract approximately $2 billion in private investment once fully developed, with initial construction requiring more than $200 million. Metric, the 900-hectare project was approved as a priority project in February 2026 to produce NMC battery precursor materials, carrying an estimated construction cost of over $200 million and expected to draw approximately $2 billion in private investment while creating around 25,000 direct and 60,000 indirect jobs. DRC's Role in the Lithium Battery Materials Chain: Global lithium-ion battery demand continues to expand on the back of EV adoption and energy storage growth, sustaining strong demand for both NMC and LFP cathode inputs. While DRC itself is not a lithium producer, its cobalt supply position gives it direct relevance to the NMC segment of the lithium battery materials market, which competes with LFP (increasingly supplied by lithium chemical producers rather than cobalt) for cell manufacturing share. Historically, the precursor and cathode-active-material stages of this chain where cobalt, nickel and lithium chemicals are converted into battery-ready materials have been concentrated outside Africa, primarily in China. Musompo is intended to shift part of that midstream capacity onto the continent. Africa's Lithium and Battery Materials Chain Remains Underdeveloped: Africa's raw lithium and cobalt resource base remains far ahead of its downstream battery materials capacity. Zimbabwe has advanced spodumene concentrate production and is moving toward early-stage beneficiation, while Zambia and the DRC are pursuing regional cooperation on battery mineral value addition. Musompo adds a precursor-stage node to this emerging landscape, though it does not itself close the loop with a domestic lithium chemical supply any NMC precursor output would still require lithium carbonate/hydroxide sourced externally, likely from Chinese refiners given current African lithium projects largely export spodumene concentrate rather than converting it locally. Conclusion: Musompo represents a meaningful step in the DRC's push to capture more value from the lithium-ion battery supply chain, specifically on the NMC precursor side. Its success depends on execution: power availability and infrastructure buildout in Lualaba remain the primary constraints, and its impact on the broader African lithium battery materials picture will be limited unless paired with progress on domestic lithium conversion capacity elsewhere on the continent e.g., Zimbabwe, Mali. SMM View: Musompo strengthens the cobalt/nickel side of Africa's NMC precursor capacity but does not directly address the continent's lithium conversion gap spodumene concentrate from Zimbabwe, Mali and Namibia is still overwhelmingly exported for offshore conversion into lithium chemicals. The more consequential development for Africa's lithium battery materials value chain will be whether beneficiation projects on the lithium side (rather than the cobalt side) can achieve similar SEZ-backed investment momentum.

[Zhang Xue Visits Ampace Today, Says Zhang Xue Electric Motorcycle Could Enter Mass Production as Early as Next Year] ZXMOTO founder Zhang Xue visited Ampace for a field trip and exchange on August 20. Zhang Xue stated that the Zhang Xue electric motorcycle could enter mass production as early as next year. In May of this year, Ampace and ZXMOTO had already begun discussions on specific collaboration plans. Ampace is a lithium battery enterprise jointly established by CATL and ATL.