Even if it has mastered the resources of 36 million tons of LCE (lithium carbonate equivalent), Ganfeng Lithium (002460. SZ) is still increasing lithium resources.
On the evening of July 11, Ganfeng Lithium announced that it intends to acquire 100% of the equity of Lithea through its wholly-owned subsidiary Ganfeng International, with a transaction consideration of no more than US$962 million (about 6.44 billion yuan).
Lithea's main asset is the PPG project in Argentina, which consists of two lithium salt lake assets, Pozuelos and Pastos Grandes, with a total estimated resource of 11.06 million tons of LCE.
Prior to this, Ganfeng Lithium had acquired a 46.67% stake in the Cauchari-Olaroz project in Argentina and a 100% interest in the Mariana project.
Compared with the above two salt lakes, the amount of PPG project resources planned by Ganfeng Lithium is between the two. If the acquisition is achieved as scheduled, the company's equity lithium resources will reach 47 million tons, almost comparable to the resources of the world's largest operating Chilean Atacama Salt Lake, and it is no exaggeration to call it a "hoarding demon".
It should be pointed out that in the past few years, Ganfeng Lithium industry was in a state of lithium salt production capacity expansion, and the development progress of the resource side was slow, which made the company's raw material self-sufficiency rate at a low level, which also affected the profit elasticity of this year to a certain extent.
"The company's lithium salt production capacity is too large, the existing raw material self-sufficiency rate is about 40%, and the short-term visible resource increase mainly comes from the expansion of Mount Marion in Australia and the production of Cauchari-Olaroz Salt Lake." Ganfeng lithium industry related people pointed out on the 12th.
This means that in the short and medium term, the self-sufficiency rate of the company's lithium salt production capacity is still very limited.
Want to buy South American "Qarhan"
The resources of salt lakes in South America are mainly concentrated in Bolivia, Chile and Argentina.
In terms of resources alone, Bolivia and Chile show the characteristics of huge resources of monomer salt lakes, such as Uyuni and Atacama resources of 112.19 million tons of LCE and 49.05 million tons of LCE respectively. However, Uyuni is not yet developed, and only Atacama is operating the salt lake.
In contrast, the amount of salt lake monomer resources in Argentina is small, generally below 20 million tons of LCE, but the overall number is more, accounting for almost 3 to 10 places in the global salt lake resource reserve list.
This is also one of the reasons why Ganfeng Lithium industry can still obtain salt lake resources after entering the "second half" of lithium mining competition.
Zijin Mining (601899. SH) in the acquisition of Laguo Salt Lake, had released a ranking of the world's major salt lake lithium resources, of which the domestic Qarhan salt lake resources of 10.49 million tons of LCE, ranking 7th in the world and 1st in China.
According to the estimated resource data given by Ganfeng Lithium, the resources of the PPG project are 11.06 million tons of LCE, which is basically equivalent to the Qarhan Salt Lake.
From the perspective of lithium concentration, another indicator to measure the quality of salt lakes, the PPG project is 459 mg/l, which is lower than the Cauchari-Olaroz project and the Zijin Mining 3Q project of Ganfeng Lithium, but slightly higher than the Mariana lithium concentration.
Compared with the known salt lakes in Argentina, the PPG project belongs to a lithium resource with a large resource reserve and medium resource endowment; Compared with the Argentine salt lake that Ganfeng Lithium has achieved, the main resource indicators are between the two projects of Cauchari-Olaroz and Mariana.
However, the company has previously laid out the above two salt lake projects in Argentina, and the amount of equity resources has reached 36 million tons of LCE's daily reserves, why should it still promote the acquisition of PPG projects?
Ganfeng Lithium's official answer is, "It is conducive to the company to further strengthen the layout of upstream lithium resources, is conducive to improving the company's resource self-sufficiency rate, and enhancing core competitiveness..."
However, one thing that cannot be ignored is that the pricing and valuation of this acquisition is lower than that of the 3Q project previously acquired by Zijin Mining.
Based on the acquisition cost per 10,000 tons of lithium carbonate equivalent, the valuation of the PPG project based on lithium resources is 0.86 times, and the valuation of Zijin Mining when it acquires the 3Q project is 0.98 times.
In contrast, it has been 8 months since Zijin Mining acquired the 3Q project, during which lithium ore, lithium salt and lithium resources have risen. If you consider this industry background, ganfeng lithium industry's acquisition price is not expensive.
As for Ganfeng Lithium's claim to improve the self-sufficiency rate of resources, it is more concentrated at the level of lithium extraction in salt lakes, which has little to do with the company's domestic ore lithium production capacity.
Inventory of the lithium resources that Ganfeng Lithium has mastered, the salt lake end is dominated by the above-mentioned Argentine salt lake and Qinghai Yiliping salt lake, and spodumene includes Australia, Mali in Africa and other places, as well as lithium clay resources in Mexico.
"The African project will also have to wait until 2024, and the increase in the ore end will mainly be based on Mount Marion's expansion project." The above-mentioned Ganfeng lithium industry person pointed out.
The Marion project plans to carry out technological upgrading and increase exposure to mineral energy in the second half of this year, and it is expected that the annual production capacity will increase by 20%-30% after completion.
Considering the above development cycle, Marion will continue to play the role of the company's main supplier of raw materials, and as for the Argentine salt lake project, which is expected to be put into operation in the second half of the year, it will be sold directly in the form of lithium carbonate products in the future.
Different choices for "lithium industry double male"
By taking stock of the above resource layout, it can be seen that Ganfeng Lithium has a considerable amount of resources, but the type, distribution and other characteristics, which is similar to another lithium giant, Tianqi Lithium (002466. SZ) Contrast is obvious.
"On the ore side, Greenbush is the world's largest and highest-grade mine in terms of production capacity, and has participated in the resource development of Atacama in Chile through its stake in SQM. In terms of resource endowments alone, Tianqi has won the best salt lakes and mines, although the company has been criticized for borrowing and acquiring debts and operating in a relatively aggressive style. A lithium salt industry person in Chengdu pointed out.
In contrast, the resource layout of Ganfeng Lithium is "piecemeal", and many resources are only obtained through equity participation and underwriting.
In the past two years, due to the public auction of lithium ore, the Australian miner Pilbara Company, Ganfeng Lithium also holds 6.16% of its equity, and agreed that Pilbara will supply no more than 160,000 tons of 6% lithium concentrate every year. The different choices of the above resource side, in the first half of the year lithium concentrate, lithium salt products rose sharply, the two companies showed different performance elasticity.
According to the data of the first quarterly report, the net profit of Ganfeng Lithium in the current period was 3.525 billion yuan, and the net profit of Tianqi Lithium industry in the same period was 3.328 billion yuan, and the profit scale was almost the same.
However, the production capacity and output scale of the two companies are very different. In 2021, Ganfeng Lithium's lithium salt production capacity totaled 126,000 tons and an output of 89,000 tons, while The production capacity of Tianqi Lithium was 44,800 tons and 43,700 tons in the same period.
The main reason is that Ganfeng Lithium has a larger production capacity, the self-sufficiency rate of raw materials and the profit margin of lithium salt cannot keep up, and Tianqi Lithium industry can also obtain a part of the profit bonus of lithium concentrate rising while enjoying the rise in lithium salt products.
The above is that the "lithium industry double male" is different in the acquisition and layout of the resource side, and there are also many differences between the two companies in the industrial end.
Ganfeng Lithium, in recent years, has emphasized the creation of a "Ganfeng ecosystem" and created a whole industry chain model of lithium resources, lithium salts, lithium batteries, and lithium battery recycling.
Tianqi Lithium, which was subject to the debt problem left over from the acquisition of SQM equity in the early stage, the development is relatively lagging behind, and is still in the stage of capacity expansion, focusing on promoting the two phases of the Australian Quinana totaling 48,000 tons of lithium hydroxide project, for the time being, there is no obvious substantive action to extend downstream, and the action is relatively lagging behind Ganfeng Lithium.
However, whether it is from the upstream resource reserves or extending to the downstream of the industrial chain, it is still impossible to determine the right and wrong choices of the two companies.
Because in different market environments, industry profits will continue to shift within the industrial chain, and there are obvious differences in the results of different business routes.
During the period of rising industry prosperity, enterprises whose business is concentrated in the ore and lithium salt levels will have more obvious profit elasticity.
In the industry decline cycle, the products cover the integrated enterprises in the upper, middle and lower reaches of the industrial chain, and the cost advantage will be relatively prominent, and the ability to resist cyclical fluctuations will be stronger.
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