Tianqi Lithium Industry said in an interactive exchange with investors that the company currently has a production capacity of 34500 tons of lithium carbonate and 5000 tons of lithium hydroxide. In addition, the company also has 48000 tons of lithium hydroxide and 20, 000 tons of battery-grade lithium carbonate under construction, of which the first phase of Quinana's 24000-ton lithium hydroxide project is scheduled to reach its design capacity in the fourth quarter of 2022.
At present, Terlison has a production capacity of 1.2 million tons / year of chemical grade lithium concentrate and 150000 tons / year of technical grade lithium concentrate, with a total annual production capacity of about 1.35 million tons / year. The second phase of Terrison's production expansion plan has been completed and put into production in the third quarter of 2019, with an additional annual production capacity of 600000 tons. Terlison is currently planning production according to the needs of Tianqi and Yabao shareholders, and the first phase of production capacity can basically meet the production capacity of lithium compounds that Tianqi and Yabao have already put into production. The capacity release of the second phase depends on the subsequent launch of the new lithium salt production capacity of the two shareholders, including the commissioning of the first phase of the lithium hydroxide plant in Tianqi Quinana.
Tianqi Lithium said that according to the shareholders' agreement, Terlison's chemical-grade lithium concentrate is not sold to customers other than Tianqi and Yabo, which can be commissioned to process.
A few days ago, TLEA, a wholly-owned subsidiary of Tianqi Lithium Industry, intends to introduce strategic investors Australian listed company IGO, by way of capital increase and share expansion. IGOLithiumHoldingsPtyLtd, a wholly-owned subsidiary of IGO, contributed US $1.4 billion in cash to subscribe to TLEA's newly registered capital of US $304 million. Tianqi Lithium Industry holds the interest of TLEA51% after the capital increase, and still has indirect control of Greenbush spodumene mine.
Tianqi Lithium said that the funds obtained from TLEA's capital increase will mainly be used to repay the company's wholly-owned subsidiaries for internal restructuring, which will be used to repay the syndicated M & A loan principal of US $1.2 billion and related interest. At that time, the company's asset-liability ratio will drop from about 81 per cent to about 63 per cent. In addition, the company will continue to demonstrate and actively promote various equity financing instruments that help to reduce the company's debt leverage, with a view to fundamentally optimizing the company's asset-liability structure and improving profitability and cash flow level. make the company's asset-liability ratio and financial leverage return to a reasonable level.
The price of battery-grade lithium carbonate rose last week, according to SMM. The turnover of lithium salt was light last week. In December 2020, the output of some lithium salt factories declined slightly due to power cuts, while the demand side was mainly prepared for the Spring Festival, superimposed by the overhaul of large factories in the first quarter and led by bullish sentiment, resulting in some downstream overpurchases. The mainstream transaction price of electric carbon is about 5-53000 yuan / ton, and the bargaining power of some small and medium-sized material factories is weak, and the transaction price is about 55000 yuan / ton.
In view of the recent rise in lithium prices, Tianqi Lithium Industry believes that great changes have taken place in the lithium industry compared with the first half of 2020, especially since the fourth quarter of 2020. The company believes that the current pace and trend of lithium price rise is not simply hype. It is not only driven by policy support, but is driven by global demand for electric vehicles and 5G applications, and is a real market behavior. It is the result of electric vehicle commercialization, technological innovation, applicability, charging convenience and the satisfaction of social needs to a certain degree. As a result, the company believes that this price increase will be sustainable and gradual, unlike the rapid rise in 2015. With the planning of electric vehicles and the release and promotion of carbon neutralization policies around the world, electrification will be the trend of the times.
In addition, the Tianqi lithium industry is also concerned about the price and market reaction recently released by Tesla ModelY. In the past, the company thought that it would take a long time for the performance, price, safety and other factors of electric vehicles to be comparable to fuel vehicles, but at present, if Tesla and domestic car companies develop, it may make this point of time earlier.
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