Tianqi Lithium Industry: The first batch of about 10 tons of lithium hydroxide products are confirmed to meet the battery-grade lithium hydroxide standard

On the evening of May 19, Tianqi Lithium Industry (002466) announced that the first phase of lithium hydroxide project has been repeatedly debugged and optimized. On the 19th, it was confirmed that all parameters reached the battery-grade lithium hydroxide standard. Product samples have been sent to a third-party laboratory for independent testing results. In order to realize the commercial production of the project, the subsidiary TLK will subsequently provide products to different customers for quality certification, which is expected to take 4-8 months. During this period, the company and TLK will continue to focus on achieving and consolidating stable, consistent and reliable plant operations.

The announcement shows that Tianqi Lithium Industry launched the “24,000-ton annual battery-grade lithium hydroxide monohydrate project” (hereinafter referred to as the “Phase I Lithium Hydroxide Project”) in 2016. TLK, a subsidiary established in Australia, is the main body of implementation. Since the phased commissioning of the project was started at the end of 2018, it has been in the commissioning state until December 31, 2019; at the beginning of 2020, due to the comprehensive consideration of the company’s serious lack of overseas engineering construction management experience and professional talent team, the project commissioning plan was not fully demonstrated As well as multiple factors such as the need for continuous optimization and adjustment of new equipment and new process technology, combined with the company’s financial capital situation, the company decided to adjust the commissioning schedule and project goals of the first phase of the lithium hydroxide project, and slow down the project pace; A joint working group led by the Operation Management Department of Qi Lithium Industry Headquarters and participated by all relevant departments of the Headquarters and the TLK team, and hired external experts from Australia to conduct careful demonstrations on the scope of rectification, technical solutions, implementation paths, and debugging budgets for project commissioning. The commissioning of the first phase of the lithium hydroxide project was restarted at the end of 2020. Since the commissioning, the project has completed the load commissioning of all process segments and went through the whole process, and the factory will enter the formal trial production stage at the end of 2021.

Tianqi Lithium Industry said that the project successfully produced the first batch of battery-grade lithium hydroxide products, laying the foundation for the subsequent continuous mass production of the factory; after the customer certification is passed, the production capacity will be gradually increased to reach the design capacity. The commissioning of the project will further expand the company’s lithium salt processing capacity, enhance the company’s profitability and the stability of profit growth; as the project is adjacent to the company’s raw material source – Greenbush spodumene mine, it will further enhance upstream and downstream synergies; At the same time, it is beneficial for the company to enter the international mainstream lithium battery material supply chain, enhance the level of international operation, and achieve the strategic goal of building the company into a first-class lithium material supplier with international competitiveness.

Tianqi Lithium also strengthened cooperation with battery manufacturers. On the evening of May 9, Tianqi Lithium Industry announced that the company signed the “Strategic Partnership Agreement” with China Innovation Airlines; Chengdu Tianqi Lithium Industry Co., Ltd., a wholly-owned subsidiary of the company, signed the “Lithium Carbonate Supply Framework Agreement” with China Innovation Airlines. “.

Specifically, the areas of cooperation in the “Strategic Agreement” will include resource development, lithium salt processing, new material development, battery component production, battery cell production, resource recycling, and ESG projects. The “Supply Agreement” stipulates that Chengdu Tianqi will sell battery-grade lithium carbonate to China Innovation Aviation, and the unit price of the sales will be implemented according to the pricing mechanism agreed by both parties.

It is reported that in 2021, Tianqi Lithium will achieve a revenue of 7.663 billion yuan, a year-on-year increase of 136.56%; the net profit attributable to shareholders of listed companies is 2.079 billion yuan, a year-on-year increase of 213.37%. Among them, in 2021, the company’s lithium mines achieved revenue of 2.644 billion yuan, a year-on-year increase of 78.50%, accounting for 34.50% of the operating revenue; lithium compounds and derivatives realized revenue of 5.018 billion yuan, a year-on-year increase of 185.64%, accounting for 65.48% of the operating revenue %.

In the first quarter of 2022, Tianqi Lithium achieved a revenue of 5.257 billion yuan, a year-on-year increase of 481.41%; the net profit attributable to shareholders of the listed company was 3.328 billion yuan, a year-on-year increase of 1,442.65%.

According to the analysis of Guosen Securities Research Report, Tianqi Lithium holds the world’s best quality spodumene and lithium salt lake resources, and its performance elasticity is expected to be fully realized.

On the resource side, Tianqi Lithium takes the Greenbush Lithium Mine in Western Australia as its resource base and Sichuan Yajiang Cuola Lithium Mine as its resource reserve. Greenbush Lithium Mine currently has an annual production capacity of 1.34 million tons of lithium concentrate. In addition, the tailings pond has been completed and put into operation in March this year, which can increase the annual production capacity of lithium concentrate by 280,000 tons. Therefore, the total existing capacity of Greenbush Lithium Mine has been completed. 1.62 million tons/year. Greenbush also has 2 expansion plans: 1) CGP3 is expected to start construction this year and will be completed in 2025, adding an annual output of 520,000 tons of chemical grade lithium concentrate capacity. After the project is fully completed and put into production The overall production capacity of Greenbush lithium concentrate will reach more than 2.1 million tons per year; 2) CGP4 is expected to be launched after the CGP3 project, and it will also add an annual production capacity of 520,000 tons of chemical grade lithium concentrate. From a long-term perspective, the Greenbush lithium mine capacity is expected to reach 2.66 million tons per year, equivalent to about 350,000 tons of LCE. After introducing IGO as a strategic investor, Tianqi Lithium indirectly holds a 26.01% stake in the Greenbush Lithium Mine, but still holds the control of the Greenbush Lithium Mine, which can 100% meet the production needs of the company’s existing lithium salt production capacity. And it provides a solid raw material guarantee for the expansion of lithium salt production capacity in the future.

On the product side, Tianqi Lithium currently has 3 production bases in China. Among them, the Shehong production base in Sichuan has a production capacity of 24,000 tons/year, of which 5,000 tons of lithium hydroxide are produced; the Zhangjiagang production base in Jiangsu is the world’s first fully automatic lithium carbonate production base. The production plant has a production capacity of 20,000 tons per year; the Chongqing Tongliang production base is mainly engaged in the R&D and production of lithium metal and related products, with a production capacity of 600 tons per year. In addition, the Chongqing Tongliang production base plans to expand the 2,000-ton lithium metal project in two phases. It is expected that the first phase of 800 tons will be completed and put into operation in 2023, and the second phase of 1,200 tons will be completed and put into operation in 2025. In addition, the company has a project plan of “building a new lithium carbonate plant with an annual output of 20,000 tons” in Anju District, Suining City, Sichuan. The project is currently gradually resuming the construction rhythm. It is expected that the project will be completed and enter the commissioning stage in the second half of 2023.

Tianqi Lithium has one production base overseas and two production lines with a total annual output of 48,000 tons of battery-grade lithium hydroxide in Quinana, Australia. Among them, the commissioning of the 24,000-ton capacity of the first phase of the project is progressing normally according to the established plan. At present, the public works, the rotary kiln and acidification kiln in the pyrotechnic zone, the pressing section in the wet zone, purification and impurity removal, evaporative crystallization, drying, etc. have been completed. The load debugging of the process section has gone through the whole process and has been officially put into trial operation. At present, the joint working group is still working on achieving stable operation of the whole process and optimization of process control parameters, and strives to produce qualified battery-grade lithium hydroxide products as soon as possible. During the trial production process, the company will carry out targeted rectification work in a timely manner according to the problems that arise, so that the project will gradually reach a continuous and stable production state, in order to achieve the goal of reaching the design capacity by the end of 2022. In addition, the main project of the second phase of the project started in 2017 at the Quinana base has been basically completed, and the construction is still suspended. On the basis of effectively verifying the mature operation of the first-phase project, the company will comprehensively demonstrate and adjust the construction plan of the second-phase lithium hydroxide project in combination with market demand and company liquidity.

On the investment side, Tianqi Lithium currently holds a 23.83% stake in SQM. SQM is the world’s largest producer of lithium extraction from salt lakes, with an annual production capacity of 120,000 tons of lithium carbonate and 21,500 tons of lithium hydroxide. According to SQM’s annual report, it is expected that the production capacity of lithium carbonate and lithium hydroxide is expected to increase to 180,000 tons and 30,000 tons respectively in the first half of 2022. At the same time, SQM announced that by 2023, it will further increase the production capacity of lithium carbonate and lithium hydroxide, respectively. to 210,000 tons and 40,000 tons. In addition, SQM expects that lithium salt sales will reach 140,000 tons of LCE in 2022, of which about 20% of the orders are sold at fixed prices or within a specific range, about 50% of the orders are variable price contracts linked to specific benchmarks, and about 30% of the orders are Prices are not locked in. In addition, SQM also holds a 50% stake in the MtHolland project in Western Australia, with a prospective production capacity of 50,000 tons of lithium hydroxide per year. As the second largest shareholder of SQM, the company is expected to obtain higher investment returns from its rapid capacity expansion.

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