[SMM Analysis] The Lijiagou lithium mine project had basically reached its designed capacity by the end of August.

Recently, an investor inquired about the Lijiagou mine project on an investor interaction platform. Chuaneng Power stated that the Lijiagou lithium mine project had basically reached its designed capacity by the end of August 2025. Currently, the products from the Lijiagou project are spodumene raw ore and lithium concentrates, with no involvement in the extraction and sales of associated rare metals. Regarding the tantalum, niobium, and tin rare metal ores associated with the Lijiagou lithium mine, the company clarified that the Lijiagou lithium mine project focuses on the mining of spodumene ore, producing spodumene raw ore and lithium concentrates, and currently does not involve the extraction and sales of associated rare metals.

On November 26, during an institutional survey, Chuaneng Power disclosed more details: concerning the market's focus on the plan for increasing reserves and expanding production, the company indicated that the Lijiagou project has potential, and they are currently studying related work, promising to disclose any progress as required. The construction of lithium chemical capacity is also being advanced. The company’s total designed capacity for lithium chemicals is 45,000 mt/year, with the 15,000 mt/year project of Dingsheng Lithium Industry already in operation. The newly built De'a Lithium Industry’s 30,000 mt/year lithium chemical project successfully produced qualified battery-grade lithium chemicals and achieved its first batch of sales on July 31, 2025. In terms of the allocation of lithium ore resources, the company clearly stated it will sell according to market principles, while also reasonably allocating based on the overall business arrangements and economic benefits of the lithium battery industry chain; the pricing of lithium products will be determined through negotiations with customers, referencing SMM lithium product prices and futures prices.

In fact, the company publicly announced in August that the Lijiagou spodumene mine project had smoothly achieved its design capacity target of processing 4,200 tons of ore per day and converting approximately 720 tons of concentrate daily, marking its entry into a new phase of efficient and stable production and operations.

Chuaneng Power, after half a year of joint debugging, production defect elimination, and deep optimization of flotation process parameters, along with a series of key technological renovations and innovations, finally succeeded in reaching the designed capacity target, with an annual production scale of 1.05 million mt of raw ore and about 180,000 mt of concentrate. According to a company representative, efforts are focused on improving the utilization rate of capacity to achieve long-term stable production. Additionally, there is room for further improvement in the daily ore processing capacity of the Lijiagou mine project, which may gradually increase to 6,000 tons in the future.

The story behind this largest lithium mine in Asia is a long one.

The Lijiagou lithium mine is located in Jinchuan County, Aba Tibetan and Qiang Autonomous Prefecture, Sichuan Province, and it is China's first large- to super-large-scale spodumene mine to enter substantial development. Its development history profoundly reflects the path of China's lithium battery industry in gaining autonomous control over upstream core resources.

Geological exploration work at the Lijiagou spodumene mine began in the last century. Preliminary exploration had initially confirmed the presence of a lithium mineralization zone in the area, but due to factors such as technology, market conditions, and transportation at the time, its enormous resource potential was not immediately developed. Entering the 21st century, with the emergence of the global new energy automotive industry and the rise in demand for lithium batteries, the strategic importance of lithium resources became prominent. During this period, institutions such as the Geochemical Exploration Team of the Sichuan Provincial Bureau of Geology and Mineral Resources conducted detailed investigations and exploration work in the Lijiagou mining area. The exploration results confirmed that Lijiagou is a super-large spodumene deposit. According to the "Verification Report on Lithium Resource Reserves of the Lijiagou Spodumene Mine in Jinchuan County, Sichuan Province" published by the Sichuan Provincial Department of Natural Resources, the deposit boasts huge reserves (measured ore resources of 38.812 million mt) and high grade (average lithium oxide grade of approximately 1.30%), making it one of the largest single spodumene deposits in China and even Asia, laying a resource foundation for subsequent commercial development.

In January 2018, the publicly listed firm Yahua Group announced that it, together with Sichuan Energy Investment, had acquired a partial equity stake in Sichuan State Lithium Materials Co., Ltd., thereby indirectly obtaining the mining rights for the Lijiagou spodumene mine. This transaction marked the formal transition of the Lijiagou lithium mine from the geological exploration phase to the commercial development phase, with Yahua Group and Sichuan Energy Investment as the main development entities.

In the following years, the mining and beneficiation project at the Lijiagou lithium mine commenced construction. Due to the complex plateau mountain environment of the mining area, the construction of infrastructure (such as roads and power supply) and the beneficiation plant faced significant challenges. The project was designed to process 1.05 million mt of raw ore annually and produce approximately 180,000 mt of lithium concentrates per year, making it the largest lithium mining and beneficiation project in terms of investment scale in China at the time.

After several years of construction, the Lijiagou lithium mine successfully conducted trial feeding and smoothly produced its first batch of lithium concentrates in 2023. This milestone event marked the official launch of China's first large-scale, modern spodumene mining production line, breaking the slow development pattern of domestic lithium resources (especially hard-rock lithium) and providing an important local raw material source for domestic lithium chemical processing enterprises.

Currently, the Lijiagou lithium mine has entered a phase of stable production and operation. The lithium concentrates it produces are mainly supplied to its shareholder Yahua Group and other leading domestic lithium chemical producers, representing a key step in reducing the Chinese lithium industry's dependence on imported spodumene.