2024 South America Lithium Resources Field Trip—Eighth Stop at Zijin Mining

In recent years, the dramatic fluctuations in lithium prices have made the industry chain experience the "bittersweet" of the market. Although current lithium prices are far from their past highs, the prospects of the new energy industry chain remain bright under the global advocacy for a low-carbon economy, and the importance of lithium resources is becoming increasingly prominent.

As one of the regions with the richest lithium resources globally, South America, especially the "Lithium Triangle" (Bolivia, Argentina, Chile), holds over 55% of the world's proven lithium resources. Therefore, South America's lithium resources play a crucial role in the global energy transition.

Against this backdrop, SMM organized the 2024 South America Lithium Resources Field Trip. Led by SMM Customer Manager Siyu Chen, the delegation visited lithium-related enterprises in South America from November 26 to December 7, 2024, toured local lithium mines and material companies, and held discussions with company executives to explore potential opportunities in lithium ore resources development, technical exchanges, and investment cooperation. On December 2, SMM and the delegation visited Zijin Mining for in-depth exchanges.

Corporate Voices

SMM and the delegation arrived at Zijin Mining, where Jianeng Gao, General Manager of Zijin Mining Argentina, warmly welcomed the group and provided a detailed introduction to the company's business development.

Zijin Mining Group Co., Ltd. (hereinafter referred to as "Zijin Mining") is a large multinational mining group engaged in the exploration, development, engineering design, and technological research of metal mineral resources, including copper, gold, zinc, lithium, silver, and molybdenum. The company is publicly listed on the Hong Kong H-share market (2899.HK) and the Shanghai A-share market (601899.SH).

The company has significant mining investment projects in 17 provinces (regions) in China and 15 countries abroad, including the Julong Copper Mine and Zhunuo Copper Mine in Tibet, the Duobaoshan Copper Mine in Heilongjiang, the Zijinshan Gold and Copper Mine in Fujian, and projects in Shanxi, Guizhou, and Longnan. Overseas projects include the Čukaru Peki Copper-Gold Mine and Bor Copper Mine in Serbia, the Kamoa Copper Mine and Kolwezi Copper Mine in the DRC, the Rosebel Gold Mine in Suriname, and the Buriticá Gold Mine in Colombia. Zijin Mining is accelerating its entry into the new energy and new materials industries, with assets such as the 3Q Salt Lake Lithium Mine in Argentina, the Lakkor Tso Salt Lake Lithium Mine in Tibet, and the Xiangyuan Hard Rock Lithium Polymetallic Mine in Dao County, Hunan. The company has also been invited to lead the development of the northeastern section of the Manono Lithium Mine in the DRC. As of June 2024, based on a 100% equity basis for subsidiaries and equity share for joint ventures and associates, the company’s total proven, controlled, and inferred resources include 104.67 million mt of copper, 3,528 mt of gold, 12.12 million mt of zinc (lead), 28,380 mt of silver, and 14.11 million mt of lithium (LCE).

Technical Exchange

SMM and the delegation engaged in in-depth discussions with Zijin Mining on project progress, lithium carbonate, and future trends in the lithium battery industry.

Regarding Zijin Mining's 3Q Salt Lake project, the company stated that the first phase of the 20,000 mt/year battery-grade lithium carbonate project is nearly complete, and the second phase is expected to add another 30,000 mt/year of battery-grade lithium carbonate capacity. The salt field project is progressing steadily. Once fully completed and operational, the project is expected to achieve a capacity of 40,000-60,000 mt/year of lithium carbonate.

Discussing the current state and future development of the lithium mining industry, Zijin Mining noted that domestic salt lake capacity is currently limited, with capacity gradually expanding in H2 2023. However, ore supply dominates domestic lithium ore supply. Chinese enterprises have also made significant lithium mining investments overseas, with Zijin Mining excelling in cost control for investments.

The company ranks among the top in China and the global top 10 in key metrics. In 2023, it achieved production of 1.01 million mt of mined copper, 68 mt of mined gold, 470,000 mt of mined zinc (lead), and 412 mt of mined silver, up 11.1%, 20.2%, 2.9%, and 4.1% YoY, respectively. The company also added 2,903 mt of lithium carbonate equivalent, with mined copper production surpassing the 1 million mt milestone, ranking among the global top five. Zijin Mining is also one of the fastest-growing companies in mined copper and gold production among leading miners. From January to September 2024, the company produced 790,000 mt of mined copper, 54 mt of mined gold, 310,000 mt of mined zinc (lead), and 331 mt of mined silver, with mined copper and gold production up 5% and 8% YoY, respectively.

Additionally, during a previous investor survey, Zijin Mining was asked about its forecast for lithium carbonate market trends. At the time, the company stated that the current oversupply in the lithium industry had not significantly reversed, and lithium prices were expected to continue declining in the short term. The rapid price drop could help rebalance supply and demand more quickly. In the medium and long term, the global NEV and energy storage industries still have significant demand potential. Global lithium carbonate demand is expected to exceed 3 million mt by 2030. As the current inventory and capacity clearing cycle concludes, a relatively reasonable lithium price will be needed to stimulate lithium supply to meet growing demand. Zijin Mining plans to actively advance the construction of the 3Q Salt Lake in Argentina, the Lakkor Tso Salt Lake in Tibet, and the Xiangyuan Lithium Mine in Hunan, as well as initiate exploration and development of the northeastern section of the Manono Lithium Mine. The completion and full operation of the "Two Lakes and Two Mines" projects will position the company as one of the most important lithium enterprises globally.

Group Photo

After touring the facilities, SMM and the delegation took a group photo with Zijin Mining, strengthening their cooperative relationship. It is believed that deeper exchanges and collaborations will follow!

Through this field trip, SMM and the delegation gained a deeper understanding of Zijin Mining's Argentina project progress and developed a more comprehensive view of the South American lithium battery industry's market status, development trends, and challenges. SMM will continue to deepen cooperation with major enterprises to achieve complementary advantages and promote the development of the lithium battery industry.