Hainan Mining Plans to Put a 20,000-mt Lithium Hydroxide Project into Production in Q1 2024

SHANGHAI, Dec 28 (SMM) - Hainan Mining said in an investigation that the company's 20,000-mt lithium hydroxide project (Phase I) was launched in Yangpu Economic Development Zone, Hainan this July. The purchase of the land was completed on November 30, 2022, and the construction officially started on December 15, with estimated 15-18 months of construction. The project covers an area of about 200 mu, with a total investment of 1.056 billion yuan, of which 900 million yuan is invested in fixed assets. Hainan Xingzhihai New Materials Co., Ltd., a wholly-owned subsidiary of Hainan Mining, will be responsible for the investment, construction and operation of the project, which is expected to be completed and put into production in the first quarter of 2024.

Hainan Mining was established in August 2007 and listed on the Shanghai Stock Exchange in 2014. Its main business includes iron ore mining, dressing and processing, petroleum and natural gas exploration, development and sales, bulk commodity trade and processing, as well as the production and sales of sand. With regard to the equity structure, Fosun Group is the core member of the company, and Hainan Haigang Group, under Hainan State-owned Assets Supervision and Administration Commission, is the second largest shareholder of the company.

In terms of the ongoing lithium hydroxide project, the construction site is located in the New Material Industrial Park of Yangpu Economic Development Zone, which is in the north-west of Hainan Province and in the centre of the Beibu Gulf. It is a pilot zone and demonstration zone for free trade, which enjoys the favourable policies for bonded zone. Yangpu Port, as a core port in Hainan, has 47 terminals of all categories and varied throughput. In summary, it has a strong cost advantage in terms of shipment and enjoys preferential policies for bonded zone.

However, it is worth noting that Hainan Mining has not yet developed lithium resources so far. In fact, the current release of upstream lithium resource fails to catch up with the rapid increase in downstream demand, thus the insufficient supply has bolstered the high lithium prices. For different types of enterprises, the key to securing high profit margins of lithium salt production in the future lies in integrated resources. According to the research records on Hainan Mining, the company has been paying close attention to global high-quality lithium ore resource projects since 2020, including the promising mines in Australia, Africa and China. It remains to be seen whether the company will make a move regarding the lithium resource.