Lithium firms seeking new ties overseas

2023-06-15 09:41:04China Daily Editor : Li Yan ECNS App Download

More cooperation to be established as competition in EVs, batteries intensifies

Chinese lithium firms are seeking overseas cooperation opportunities to expand their global presence, especially in mining, which experts said is conducive to battery supply for electric vehicle makers.

In early June, the Cauchari-Olaroz salt lake project owned by Minera Exar — an Argentina-based joint venture in which Ganfeng Lithium Group holds the controlling stake — started production. Ganfeng is a major Chinese lithium company.

Located in Jujuy, Argentina, the project has total resources of approximately 24.58 million metric tons of lithium carbonate equivalent (LCE), making it one of the world's largest lithium extraction projects from salt lakes.

Ganfeng Lithium said the first phase of the project has a planned LCE capacity of 40,000 tons, and the planned production capacity for the second phase will be no less than 20,000 tons. The first phase, which started production last week, will create over 2,000 jobs in the area.

With subsequent capacity ramping up and the optimization of production lines, the project will gradually produce battery-grade lithium carbonate products, the company said.

Sun Yifan, marketing director of Ganfeng Lithium, said that the Cauchari-Olaroz salt lake project is the company's first project in Argentina that has begun operations. The project is important for the company to optimize resource allocation and improve its global presence.

The company said the project utilizes solar power to support the extraction process, non-potable water resources for production and, after water evaporation, the resources are collected and recycled, aiming to create a clean and green lithium resource project.

To date, Ganfeng Lithium has four lithium projects in Argentina with a total planned investment of $2.7 billion and an expected annual LCE production capacity of over 100,000 tons.

As one of the global leaders in lithium reserves, the company currently holds 19 lithium mines worldwide. It plans to achieve a total annual production capacity for lithium products of no less than 600,000 tons of LCE by 2030.

Ganfeng Lithium isn't the only lithium company that is expanding its global footprint. Companies including Eve Energy Co Ltd, Gotion High-Tech and Anshan Heavy Duty Mining Machinery Co Ltd have also reportedly acquired lithium mining projects domestically and overseas.

Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University, said that companies' investment drive in overseas lithium mining was to secure materials for the production expansion of lithium-ion batteries for the booming EV market amid waves of global green transformation.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation in Beijing, said: "The majority of lithium resources are widely distributed abroad, and many of these economies are willing to invite Chinese companies to make investments to develop local mines to boost the economy. It's mutually beneficial for both."

According to Huaxi Securities, China's dependence on foreign lithium resources has reached 85 percent and domestic lithium companies are increasingly venturing into overseas lithium mining.

Huaxi Securities said China's lithium resources are mainly distributed in provinces including Jiangxi, Sichuan and Qinghai. However, the total quantity of mines in Jiangxi is not abundant, while lithium mining in Sichuan is challenging due to the mine locations in remote areas with high altitudes and a lack of infrastructure. Lithium mines in Qinghai face challenges such as high magnesium-to-lithium ratios, low lithium content and immature lithium extraction technologies.

"In addition, there was a period in recent months when the price of lithium minerals increased rapidly, significantly impacting the industry's production costs. These companies hope to expand overseas lithium sources to reduce the impacts and risks of market fluctuations," he said.

"As market competition intensifies and some countries pursue the nationalization of lithium resource exploration, along with the influence of geopolitics, there will be more challenges in overseas lithium mining. However, an increasing number of countries are now considering the establishment of more effective safeguard mechanisms for the international trade of these new energy-related products, which is beneficial for the industry," Zhou said.


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