Smarter Energy: Laying Out the Lithium Carbonate Capacity of 40 Thousand Tons, Tesla-type Li-ion Battery Will Take Shape
In 2017, the sales volume of new energy automobiles exceeded the expectation. If this trend continues, China will sell two millions of new energy automobiles by 2020. At present, the robust developing of new energy automobiles has largely stimulated the demands of lithium salts (lithium carbonate and lithium hydrate). But the resource shortage and the expanding production of lithium salts have contributed to its imbalance between the supply and demand and the inflated price. So for enterprises engaging in Li-ion battery, developing the upstream resource of lithium means controlling a commanding point of the future market. Recently, Far East Smarter Energy Co., Ltd. (referred to as “Smarter Energy”, stock code: 600869), China’s leading manufacturer producing 21700-battery with a total capacity of 6GWh for Tesla, has exclusively invested in Jiangnan Nanshi Li-ion Battery Materials Co., Ltd. (referred to as “Jiangnan Nanshi”), a well-known company in Yichun, the capital of lithium in Asia. Jiangnan Nanshi plans to reach the annual output of 40 thousand tons of lithium carbonate and 10 thousand tons of lithium hydrate, so Smarter Energy’s investment has captured the highland of lithium carbonate and opened an industry chain of the Li-ion battery.
According to the public information, to respond China’s 13th Five-Year Plan for new energy and the development strategy of Yichun to gather the lithium new material industry, Jiangnan Nanshi settled in the industry park in Wanzai County, covering an area of over 400 mu. It has already purchased advanced production equipment to develop projects of lithium new material and is actively implementing the strategic layout of “the integration of the front-end industrial chain”. Its capacity planning of the lithium new material is as follows: Reaching 20 thousand tons of lithium carbonate in 2018, 40 thousand tons of lithium carbonate in 2019 and 60 thousand tons in 2020, realizing the sales revenue of RMB 10 billion, effectively promoting the “high-speed developing in Wanzai”, and striving to be China’s R&D manufacturer of lithium carbonate and boasting leading technique and scale.
The project is located in Yichun, the capital of lithium in Asia. The region is richly endowed with the most abundant mineral reserves of lepidolite in the world, whose allowable exploitation of lithium oxide is 31% of the total in China and 12% of the world. Yichun Tantalum & Niobium Ore, several kilometers away from the downtown, is the largest niobium ore in the world as well as the largest tantalum ore in China. In the project, the exploitable storage volume of lithium oxide is 1.1 million tons, ranking the first globally. Additionally, Jiangnan Nanshi has also taken precautions and entered into the mining and milling fields of lithium ahead of time, seizing the domination to develop this project. Its practices are: Investing and promoting the lithium mining areas in Yifeng and Fengxin; establishing ore treatment plants with an annual capacity of 50 thousand tons in Binjiang and Wanzai of Yichun; actively cooperating with foreign guests in establishing reliable and stable overseas purchasing channel of lithium resources. The ore resources will lay a solid supply foundation to develop lithium new material.
In 2017, Smarter Energy (600869) started the strategic layout of Li-ion battery in an all-around way through enlarging production capacity, enforcing technology R&D, developing product diversification and laying out the Li-ion battery copper foil featuring high precision and ultrathin performance. According to the data statistics on the total power of power battery installation of Shenzhen Gaogong Industry Research Co., Ltd (GGII) from January to November in 2017, the total power battery installed capacity of Far East First New Energy Co., Ltd. (referred to as “Far East First”) ranks the 8th in the first half year and August and the 10th in November. Corresponding with its achievement in this field, Far East First is also listed in the top 10 car accessories in The New-Energy Vehicle Type List for Promotion and Application (The 11th batch in 2017). Nanshi Industrial Investment Group (referred to as “Nanshi Industrial”) will invest RMB 200 million in Far East First, which will largely improve its capacity. In addition, with the continuous growing of the new energy automobile market, the output quantity and market share of the power battery of Smarter Energy (600869) will increase after the establishment of the Jiangsu (Yixing) smart energy industrial park project and Jiangsu (Yuchun) energy storage Li-ion battery with high-energy density R&D and industrialization project. The cooperation with Nanshi Industrial and Jiangnan Nanshi will strengthen the strategic cooperation on up-stream Li-ion battery raw material of Smarter Energy (600869), satisfy the requirements of leading lithium resources, technique and costs, thus providing strong guarantee to the research, development and manufacturing of Li-ion battery products and improving the company’s comprehensive competitive power.
Lithium carbonate, the basic resource of Li-ion power battery, shares 38% of the total consumption amount with the robust development of new energy automobile globally. The application in this field has become the primary. Under this background, the game of “surviving of the fittest” will become fiercer. By laying out important raw material industries like lithium resources and copper foil, connecting the industry chain of lithium new material, Smarter Energy (600869) has gained a strong cost control ability and will enhance its advantages in cost and technique, thus laying a solid foundation to make Far East First the leading service provider in new energy automobile battery and energy storage system.