How does China's lithium industry solve the dilemma of relying on imports but relying on imports?

With the rapid development of new energy vehicles, China's lithium battery industry is also experiencing explosive growth. In 2017, China's lithium battery production was 88.70GWh, a year-on-year increase of 39.12%. Shipments were 39.2GWh, a year-on-year increase of 27.27%.

The price of lithium has also risen. According to business data, as of March 13, China's battery -grade lithium carbonate price was 165,500 Yuan / ton, although slightly higher than the highest point of nearly 180,000 Yuan / ton in 2017, but compared with 126,000 Yuan / ton at the beginning of 2017 In terms of price, the increase is over 30%.

The rise in prices reflects tight market supply. As the fourth country in the world for lithium resources, China is a rich Lithium country. However, it depends on imported lithium resources to support downstream development. Lithium resources are more than 85% dependent on foreign countries. In this regard, Xiaofang Fu, deputy chief engineer of the Sichuan Geological Survey, believes that “the main reason for the high proportion of imports is the lack of development and utilization. Lithium resources management and integration are not enough, and the overall planning and implementation are urgent.” However, tapping lithium resources is not easy. . China's lithium resources are divided into salt lake lithium and solid lithium. The largest salt lake resources are due to the harsh natural environment and the production capacity is delayed. The salt lake that can provide output is faced with the problems of high purification difficulty and low resource. The development of solid lithium is also delayed due to poor local supporting facilities, ethnic issues, and environmental issues.

Wanfeng Luo, a lithium analyst at Baichuan Information, told the Caijing reporter that the Chinese lithium supply gap will still exist in 2018.

Lithium development is difficult to break

According to the latest report of the US Geological Survey in 2018, the global lithium resources exceed 53 million tons, of which Argentina has 9.8 million tons, Bolivia has 9 million tons, Chile has 8.4 million tons, China has 7 million tons, and the United States has 6.8 million tons. Australia has 5 million tons.

China's proven lithium reserves are 3.2 million tons, mainly distributed in Qinghai, Tibet, Sichuan, Jiangxi, Hunan and other places. Among them, reserves in Qinghai, Tibet and Sichuan account for about 85% of the total reserves. Sichuan Province has abundant and high-quality spodumene ore, and there are still a large number of solid lithium mines in the two states of Aba and Ganzi.

Aba and Ganzi Prefecture are mainly high-altitude mountainous areas, and the local infrastructure is poorly equipped. Mining requires a lot of manpower and material costs. In addition, due to the continuous improvement of environmental standards, tailings processing is becoming more and more difficult. In addition, Aba and Ganzi belong to the Tibetan Autonomous Prefecture, and the Tibetan people regard the mountain as a god and are not easy to develop.

According to Xiaofang Fu, the development of lithium mines in Sichuan and Tibet is monopolized by several private oligopolies. These enterprises have not paid attention to the linkage effect of local industries and the development of local poverty alleviation, which has created a situation in which enterprises are poor and poor, and the problems in ethnic areas are further complicated. . In some areas, there is even resistance, and it is used by Tibetan forces and extreme religious forces.

Therefore, China's largest lithium supplier, Tianqi Lithium Industry, although it owns the Zhalai Spodumene Mine in Ganzi Prefecture, it still needs to import spodumene from Talison Company of Australia. An insider of a domestic lithium giant told the Caijing reporter that the Ganzi Prefecture Tula Lithium Gemstone Mine is in the planning and construction period and will be developed after the above problems are solved. In the face of these problems, how should China's lithium resources developed?

The National Development and Reform Commission pointed out in the "National Mineral Resources Planning (2016-2020)" that it is necessary to promote the exploration and development of Sichuan Ganzi spodumene mine, Xinjiang Altay lithium mine, and Jiangxi Yichun lithium mica mine resources. Delineation of national planned mining areas, construction of new energy resource bases for lithium ore in Sichuan, and strengthening of lithium resource protection and rational utilization in northern Xinjiang, western Sichuan and Wuyishan, and strengthening of lithium resources in salt lakes such as Chaer Khan in Qinghai and Zabuye in Tibet Break through the key technology of lithium extraction from salt lake brine.

It can be seen that lithium extraction from salt lakes is the future development trend of lithium mines. This is also in line with the distribution of lithium resources in China. China's brine lithium resources account for 79% of the total lithium resources.

China's salt lake is dominated by lithium-rich brine. The third largest salt lake in the world, Zabuye Salt Lake, is located in Tibet, with a lithium grade of 0.12, second only to 0.15 in Atacama Salt Lake, Chile, and the magnesium to lithium ratio is as low as 0.0036. The ratio of magnesium to lithium in salt lake is called magnesium-lithium ratio. It is an indicator to measure the difficulty of lithium extraction in salt lake. The higher the magnesium-lithium ratio is, the more difficult it is to purify. It is difficult for the industry to extract lithium resources from salt lakes with magnesium-lithium ratio greater than 20. However, the production of the low-magnesium-lithium ratio of Zabuye Salt Lake is very small, only about a thousand tons.

Xiaofang Fu, who has traveled to Zabuye, said that the local traffic is inconvenient and the road conditions are extremely poor, which is not conducive to transportation. Moreover, Tibet is an alpine region with insufficient sunshine. Last year, heavy snow also stopped Tibet Mining (000762.SZ) for some time.

In addition to Zabuye, there are several salt lakes in Qinghai. However, Qinghai Salt Lake is facing the problem of high magnesium to lithium ratio. For example, the Dongtai-Jinnar Salt Lake in the Qaidam area has a magnesium-to-lithium ratio of 33.8, while the Xitai-Jinnar Salt Lake and Yiliping Salt Lake have a magnesium-to-lithium ratio of 65.57 and 92.3. The ratio of magnesium to lithium Chaerhan Salt Lake is as high as 1837. In comparison, the magnesium-lithium ratio of the salt lakes in the world and the Akatama Salt Lake in Chile is only 6.23.

In addition to Zabuye, there are several salt lakes in Qinghai. However, Qinghai Salt Lake is facing

In 2002, how to industrialize high-magnesium lithium compared to salt lakes is a worldwide problem. CITIC Guoan Group Co., Ltd. told the Caijing reporter that CITIC Guoan achieved industrial-grade lithium carbonate production in 2006 at the Salt Lake Plant in West Taiwan, and in 2006 it realized the production of battery-grade lithium carbonate. At present, the three leading enterprises of CITIC Guoan, Yanhu (000792.SZ) and Qinghai Lithium have built 10,000 tons of lithium carbonate production capacity. Qinghai Salt Lake BYD Resources Development Co., Ltd. and Qinghai Salt Lake Fossil Lanke Lithium Industry Co., Ltd. invested 8 billion Yuan to build 30,000 tons and 20,000 tons of battery-grade lithium carbonate projects this year. In addition, Qinghai Hengxinrong and Qinghai Minmetals have a total capacity of 30,000 tons under construction.

The above CITIC Guoan executives said that once the project is completed, the capacity utilization rate in the first year will reach 60%-70%. China's salt lakes have made progress in lithium extraction. Wang Binggang, head of the national new energy vehicle innovation project project team, told the Caijing reporter that the prospects for lithium supply are expected in the future.

Although the lithium extraction capacity of Salt Lake began to accelerate, the above-mentioned lithium giant said that the high magnesium to lithium ratio problem in Salt Lake has led to higher production costs, especially high-grade lithium products such as battery-grade lithium carbonate. The mainstream technologies for lithium extraction in salt lakes are calcination, extraction, membrane and adsorption. Wang Min, deputy director of the Salt Lake Resources Chemistry Laboratory of the Qinghai Salt Lake Research Institute of the Chinese Academy of Sciences, said that the lithium extraction process in Qinghai Salt Lake has reached the industrial standard, but to achieve the battery-grade lithium carbonate standard, further purification and purification are still needed. From a technical point of view, it is not a problem. The cost of lithium extraction from Salt Lake is expected to be controlled at 30,000-400,000 Yuan/ton.

Foreign giant monopoly

China's lithium resources are difficult to mine, and the high concentration of resources has led to the concentration of global lithium product production, and even the existence of oligopoly. Prior to 2016, over 80% of global lithium products were supplied by American Albemarle (NYSE: ALB), Chilean SQM (NYSE: SQM), American FMC (NYSE: FMC) and Australian Talison.

Among them, Albemarle mines in Atacama Salt Lake and Chile's claytonvalley mines in Chile, SQM mines in Atacama Salt Lake in Chile, FMC mines in Onbreuer El Salt Lake in Argentina, and Talison mines in Greenbush, Australia Spodumene mine. These four companies formed the mining situation of the “Three Lakes and One Mine”.

In 2016, the “Three Lakes One Mine” situation was broken, and the production of the Australian mining company Orocobre (ORE.ASX)'s Olaroz lithium salt plant in Argentina began to release. Orocobre lithium products supply more than 10,000 tons, accounting for 6% of the world's total supply. The new supply situation of "Sihu One Mine" was born.

By 2017, Australia's Galaxy Resources Inc. (ASX: GXY) and Australian RIM also joined the competition. Galaxy Resources owns the Mt. Cattlin lithium mine in southern Kalgoorlie, Western Australia, which was once discontinued due to funding problems. Refurbished in April 2016, 2017 lithium concentrate design capacity of 137,000 tons / year. RIM's Mt. Marion lithium mine project in Kalgoorlie also officially produced lithium concentrates in 2017 with a design capacity of 200,000 tons/year. The new "four lakes and three mines" situation was formed.

No matter how the competitive situation changes, the global lithium supply market is still an oligopoly market. Resource origins and companies are highly concentrated in Chile, Argentina, Australia and the United States. These companies take advantage of the current scale effect and continue to occupy new veins and salt lake resources, making the lithium supply market more difficult to enter, and companies with most resources have strong bargaining power.

The strong bargaining power of these foreign companies is a big challenge for the development of China's lithium industry. China's lithium resources are still dominated by imports.

Customs data show that in 2017, imported lithium salt totaled 35,000 tons (equivalent to lithium carbonate equivalent), an increase of 27.79%; the annual export of lithium salt totaled 19,000 tons (equivalent to lithium carbonate equivalent), an increase of 74.85%, net imports reached 16,000 tons (equivalent to lithium carbonate equivalent).

According to estimates by Bohai Securities, the demand for domestic lithium resources in China increased from 1,850 tons in 2001 to 17,350 tons in 2016, and in 2017 it was close to 20,000 tons. In the same period, the production of domestic lithium resources was higher from 4,700 tons in 2013. The point was reduced to 2,300 tons in 2016, the gap became larger, and the external dependence also exceeded 85%.

The rapid development of new energy vehicles will continue to grow demand for lithium batteries. In 2017, China's power lithium battery shipments increased by 27.27% year-on-year while China's lithium battery production also increased by 39.12%.

Wan Gang, vice chairman of the National Committee of the Chinese People's Political Consultative Conference and Minister of Science and Technology, said at the 2018 Forum of China Electric Vehicles 100 People's Congress that China's new energy vehicle sales target for 2020 is 2 million units. In 2017, the cumulative sales volume of new energy vehicles in China was 777,000 units.

In other words, the sales of new energy vehicles in China will increase at a rate that doubles every year, so a large number of power batteries are needed. In addition, ceramic glass,special and other industries also require a large amount of lithium. At present, China's lithium consumption has accounted for half of the total global consumption, which is bound to put more pressure on the future supply of lithium products.

Chinese companies rushing overseas

Although the lithium extraction capacity of Salt Lake is gradually increasing, it is far from being thirsty. Therefore, Chinese companies have set their sights on overseas.

Western Australia's Green bushes (Green Bush) has become the first stop for Chinese companies overseas. The Green Bush Mine is currently the world's largest and best quality spodumene mine. According to the reserve assessment report issued by BehreDolbear Australia Pty. Limited, as of September 30, 2016, the total resources of the Green Bush Lithium Mine was 16.51 million tons, equivalent to 8.33 million tons of lithium carbonate equivalent; The total reserves of the mines are 86.4 million tons, and the average grade of lithium oxide is 2.4%, equivalent to 5 million tons of lithium carbonate equivalent.

In May 2014, Tianqi Lithium Industry (002466.SZ) attacked Lockwood Corporation of the United States and completed the acquisition of a 51% stake in Wenfield. After the completion of the transaction, Tianqi Lithium holds a 51% stake in Wenfield, Wenfield holds a 100% stake in Talison, and Tianqi Lithium has achieved control of Talison.

Through this acquisition, Tianqi Lithium has also become one of the most important suppliers of ore lithium resources in the world. At present, the capacity of lithium concentrate in the Green Bush mine has reached 740,000 tons, and will increase to 1.34 million tons in 2019. According to the shareholder agreement, Tianqi Lithium will purchase 50% of its lithium concentrate production.

Another domestic lithium giant, Ganeng Lithium Industry (002460.SZ), is not far behind. It acquired a 43.1% stake in RIM. RIM owns 100% of the Mt.Marion spodumene project. The Mt.Marion mine has a total reserve of 77.8 million tons and an estimated capacity of 200,000 tons. It has released capacity in 2017. In 2018, it is expected to form 400,000 tons of lithium concentrate capacity.

In addition, Yahua Group (002497.SZ) announced in August last year that it intends to subscribe for 34.49 million shares issued by Australian Core. Core owns a 100% mining rights to the Phoenix lithium mine and consists of four mines BP33, FarWest, Ahoy and Grants. In October 2017, Yahua Group completed the subscription of the first phase of the 16.7 million shares of Core, and the follow-up subscription is still undergoing the approval procedures of relevant departments.

Great Wall Motor (601633.SH/02333.HK) also announced last year that it will invest $28 million to subscribe for up to 3.5% of Australia's Pilbara Minerals; Pilbara Minerals owns the Pilgangoora lithium antimony mine in Western Australia.

However, overseas subscriptions are not always smooth. Bloomberg reported that the Chilean government has asked the country's anti-monopoly agency to block the potential acquisition of SQM shares by Chinese company Tianqi Lithium. Nutrien Ltd. (formerly PotashCorp.) SQM's shareholder, Nutrien Ltd., plans to sell a 32% stake. It is reported that Tianqi Lithium is one of the bidders.

Argentina and Bolivia do not allow foreign capital to intervene in their domestic lithium resources. Chinese-funded enterprises such as CITIC Guoan hope to obtain the mining rights of Uyuni Salt Lake in Bolivia through joint ventures and aid construction.

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