China’s Zijin Claims High Profits from Battery Sales
2022.12.01 02:28
China’s Zijin Claims High Profits from Battery Sales
Budrigannews.com – The head of China’s Zijin Mining Group Co. said that while lithium prices are currently at a record high, they could fall by half by the end of 2025. However, the miner would still continue to invest heavily in the industry.
One of the top 10 producers of the battery metal in the world, the company, China’s top gold extractor and leading producer, has already spent $16 billion over the past year to acquire three lithium mines.
Even though there have been warnings that lithium prices, which have reached all-time highs due to the rapid growth of electric vehicles, may reach their highest point next year due to a supply glut.
“By 2030, Zijin wants to be one of the world’s top three to five mining companies.”On top of our gold, copper, and zinc sectors, we need a new growth driver to do that,” stated Zou Laichang, president of the company.
“The most important strategic path for us to achieve this goal is new energy and new materials.”
Neo Lithium Corp., based in Canada and focused on lithium mining in Argentina, was one of Zijin’s most recent acquisitions, giving it access to the Tres Quebradas (3Q) project for C$920 million (690 million USD).
Additionally, it acquired majority stakes in the Xiangyuan lithium mine in Hunan province and the Lakkor Tso Lithium Salar mine in China’s Tibet region.
Zou said more ventures are arranged, giving no subtleties on how much the organization was intending to spend.Zijin made a net profit of 15.7 billion yuan ($2.2 billion) last year and has a market capitalization of approximately $35 billion.
However, automakers BYD and Tesla (NASDAQ:) and Chinese battery manufacturer Contemporary Amperex Technology Co Ltd (CATL) face intense resource competition.also seeking lithium access.
Alternative battery materials are also being developed by some businesses, which could ultimately reduce lithium demand.
Zou stated, “Of course there are concerns; however, we will take full advantage of our technology and cost advantage to remain competitive.”
He stated, “We’ve been working on our lithium extraction from salt lake brine and hard-rock deposits to bring down costs and improve efficiency in utilisation rates.”
A flood in supply coming onstream by 2025 is supposed to push costs down to a “typical reach” of 300,000 yuan to 400,000 yuan a ton in the last part of that year, Zou said.
That would reduce China’s spot lithium carbonate battery grade prices by as much as half, which currently stand at a record 597,500 yuan ($83,430) per tonne, roughly three times higher than they were a year ago, according to Fastmarkets.
China’s prices serve as an important global benchmark and account for approximately 60% of the global supply of lithium chemicals.Zijin recently stated to investors that the prices of 100,000 yuan per tonne for lithium carbonate were the basis for its mine acquisitions.
However, Chinese miners looking to invest abroad face increasing obstacles.Citing national security concerns, Canada issued an order requiring three Chinese companies to stop investing in lithium mines in the country.
Zou stated, “We will be more cautious, focusing more on assessing political and policy risks.”
In addition, Zijin and Australian miner AVZ Minerals Ltd. are fighting over the purchase of a 15% stake in the Manono project in the Democratic Republic of the Congo, which is thought to be one of the largest lithium mines in the world.
An investor briefing on November 15 stated that Zijin intends to have 150,000 tonnes of lithium carbonate equivalent (LCE) capacity by 2025.
That’s about half the capacity planned by Ganfeng Lithium Co. Ltd., a major Chinese producer. Zijin is also expanding downstream and starting production of lithium iron phosphate (LFP). Zou stated that by the end of the year, approximately 20,000 tonnes of LFP capacity would be operational.
