2024 South America Lithium Resource Field Trip—Seventh Stop: Ganfeng Lithium

In recent years, the dramatic fluctuations in lithium prices have brought a mix of "sweet and bitter" experiences to enterprises across the industry chain. Although lithium prices have long lost their former glory, the development prospects of the new energy industry chain remain promising under the global advocacy for a low-carbon economy, further highlighting the importance of lithium resources.

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

Against this backdrop, SMM organized the 2024 South America Lithium Resource Field Trip. Led by SMM Client 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 resource development, technical exchanges, and investment cooperation. On December 1, SMM and the delegation visited Ganfeng Lithium for in-depth exchanges.

Corporate Insights

SMM and the delegation visited Ganfeng Lithium, where Xingguo Yu, General Manager of Minera Exar in Jujuy Province, warmly welcomed the group and provided a detailed introduction to the company's business development.

As a renowned domestic lithium giant, Ganfeng Lithium Group's business spans the entire industry chain, including resource extraction, refining and processing, battery manufacturing, and recycling. Its products are widely used in EVs, energy storage, 3C products, chemicals, and pharmaceuticals. The group’s lithium resources are distributed globally, and it possesses industrialisation technologies for "brine-based lithium extraction," "ore-based lithium extraction," and "recycling-based lithium extraction." With sufficient capacities for lithium compounds and lithium metal, the company operates multiple production sites domestically and internationally. It also boasts comprehensive battery manufacturing and recycling technologies, providing sustainable value-added solutions for battery producers and EV manufacturers.

Minera Exar, established in 2006, is a mining and exploration company in Argentina. It is jointly owned by Ganfeng Lithium (46.66%), Lithium Americas (43.04%), and Jujuy Province's state-owned mining investment company (JEMSE-85%). The company is dedicated to developing and producing lithium carbonate at the Cauchari-Olaroz Salt Lake in Jujuy Province.

Salt Lake Visit

Subsequently, SMM and the delegation visited Ganfeng Lithium's Cauchari-Olaroz Salt Lake project in Argentina, experiencing the company's salt lake ecosystem firsthand.

It is reported that the Cauchari-Olaroz Salt Lake project, located in Jujuy Province in north-west Argentina, primarily uses clean solar energy for lithium extraction and has a resource volume of 24.58 million mt LCE. The project was completed and put into operation in June 2023, producing approximately 6,000 mt of lithium carbonate in 2023. In 2024, it is expected to produce about 20,000–25,000 mt of lithium carbonate. The capacity ramp-up is progressing smoothly, mainly due to the efforts of the local team in Argentina and close collaboration with Lithium Americas (LAAC). The project's second phase is also under planning.

Previously, during an investor activity survey, Ganfeng Lithium was asked about "subsequent capital expenditures for the Argentine salt lake." The company responded that the main capital expenditures for the Cauchari-Olaroz project in Argentina have already been paid. The current financing plan for the project is primarily for operational funds and refinancing existing debt. Regarding capital expenditures for the second-phase capacity, the company will proceed with construction based on the project's actual situation and market conditions, controlling the pace of capital expenditures. The capital expenditures for the Mariana Salt Lake in Argentina are nearing completion, with potential additional operational capital investments in the future.

Technical Exchange

SMM and the delegation engaged in in-depth discussions with Ganfeng Lithium on the progress of its projects, lithium carbonate, and the future development trends of the lithium battery industry.

When asked about the company's outlook on future lithium price trends, Ganfeng Lithium stated that it remains optimistic about medium and long-term demand in the lithium industry. However, with lithium prices continuing to decline, industry supply capacity is gradually being cleared. Under the current lithium price environment, the supply growth rate of lithium resources is expected to remain low next year. The lithium industry exhibits both cyclical and growth characteristics in its supply and demand dynamics.

Additionally, when previously asked about the self-sufficiency rate of lithium resources, the company mentioned that the proportion of salt lake supply is still relatively small but will see some increase this year and more next year. The self-sufficiency rate of resources is expected to improve significantly over the next two years, primarily driven by the gradual ramp-up of projects such as Cauchari-Olaroz, Goulamina, and Mariana. Starting next year, most of the company's lithium resources are expected to come from projects it controls or holds equity in.

Group Photo

After the factory visit, SMM and the delegation took a group photo with Ganfeng Lithium, strengthening their cooperative friendship. It is believed that deeper exchanges and cooperation will follow!

Through this field trip, SMM and the delegation gained a deeper understanding of the progress of Ganfeng Lithium's projects in Argentina, as well as the current market status, development trends, and challenges of the lithium battery industry in South America. They will continue to deepen cooperation with major enterprises to achieve complementary advantages and promote the development of the lithium battery industry.