China's lithium battery industry chain is expected to continue to lay out the African continent. This time, instead of mining, it went one step further downstream: building a battery factory.
On June 2, the surging news reporter learned from the domestic battery company Guoxuan Hi-Tech Co., Ltd. (hereinafter referred to as "Guoxuan Hi-Tech"), headquartered in Hefei, Anhui, that Guoxuan Hi-Tech is planning to establish an electric vehicle battery factory in Morocco, a North African country, with an annual production capacity of 100GWh.
Guoxuan Hi-Tech Hefei headquarters
The relevant person in charge of Guoxuan Hi-Tech told the surging news reporter, "The company and the Moroccan government have the intention to build a battery factory locally, and they are still communicating." Morocco was chosen because of the market in Europe and Africa. ”
According to Reuters, the final investment in the plant may be as high as 6.3 billion US dollars.
According to Reuters, Morocco already has an automobile and renewable energy industry, and has formed an industrial chain of raw materials such as cobalt and phosphate. Moroccan officials have previously positioned the country as an excellent location to set up a battery factory for electric vehicles.
In addition, Renault and Stellantis have plants in Morocco, with a combined production capacity of 700,000 vehicles per year for the domestic and global markets. In addition, Morocco has more than 250 automakers and component manufacturers, which together make up the country's automotive ecosystem.
Last year, the auto industry topped Moroccan industrial exports with 111 billion dirhams ($11.1 billion), up 33 percent from the previous year.
In fact, Morocco has been brewing into the power battery industry for a long time. Back in July last year, Moroccan Minister of Industry and Commerce Ryad Mezzour told Reuters on the sidelines of the U.S.-Africa Business Summit: "We hope to sign the agreement for the battery gigafactory before the end of this year, and the factory will provide great impetus to the local automotive industry."
Ryad Mezzour further pointed out that Morocco's leading automotive infrastructure supports EV battery manufacturers, while the increasing production of local pure electric and hybrid vehicles in recent years has also created a demand for local manufacturing of batteries.
Strantis' brand Citroen, for example, plans to double its production capacity of ultra-small electric vehicles in Morocco to 50,000 within two years. Last June, in Morocco, Citroen's limited edition of 50 mini electric cars sold out in less than 18 minutes.
Morocco aims to increase the proportion of locally made auto parts exports from 65 percent to 80 percent, Mezzour said, stressing that the automotive industry and aerospace are the country's "two major drivers of industrial innovation."
Chinese lithium battery companies in Africa
It is worth mentioning that the Chinese Embassy in the Democratic Republic of the Congo released information on May 30 that on the afternoon of May 27, Congolese President Tshisekedi and his entourage visited the Shanghai management headquarters of Luoyang Molybdenum Industry and held discussions with the management of Hongshang Group, CATL and Luoyang Molybdenum.
Congolese President Tshisekedi and his entourage visited Luoyang Molybdenum Shanghai Management Headquarters
The Democratic Republic of the Congo is an important new energy metal country. In 2016 and 2017, Luoyang Molybdenum acquired 80% of the country's TFM copper-cobalt mine for a total of US$3.75 billion; In December 2020, Luoyang Molybdenum acquired a 95% stake in KFM Coppercot Mine for US$550 million. These two world-class mines are also the most important assets of Luoyang Molybdenum.
In April 2021, Luoyang Molybdenum and CATL jointly announced that CATL officially invested in KFM through its subsidiary Bangpu Era.
During the discussion, the management of Luoyang Molybdenum and CATL had in-depth exchanges with members of the DRC delegation on potential cooperation projects such as the development of green power and battery industry chains in the DRC.
However, it can be seen that before Guoxuan Hi-Tech announced the planning of the Moroccan battery factory, Chinese lithium battery companies mainly laid out mineral resources in Africa.
According to the China Nonferrous Metals Industry Association, the total lithium resources in Africa are about 25.75 million tons of LCE, and the total proven lithium reserves are 4.94 million tons (metal volume). Among them, the proven lithium resource reserves of the Democratic Republic of the Congo reached 3 million metal tons, accounting for 69.1% of Africa's total resource reserves; It is followed by Mali, with proven lithium resource reserves of 700,000 metal tons, accounting for 16.1% of Africa's total resource reserves.
According to the data, the proven lithium resources are mainly distributed in five countries: the Democratic Republic of the Congo, Mali, Zimbabwe, Ghana and Namibia. Among them, Manono lithium mine, Goulamina lithium mine and Arcadia lithium mine are all world-class lithium resources.
Since the beginning of this year, the momentum of Chinese lithium battery companies to buy mines in Africa has not decreased. In January, Sichuan Yahua Industrial Group Co., Ltd. announced that its wholly-owned subsidiary intends to acquire 70% of the shares of two wholly-owned subsidiaries of China-Africa Industrial (Hong Kong) Co., Ltd. for US$145 million, thereby gaining 70% control of four lithium mines in Namibia, Africa.
Also in January, Hainan Mining Co., Ltd., a subsidiary of Fosun Group, announced that it intends to increase its capital in Kodal Minerals PLC, a British listed company, and its wholly-owned subsidiary Kodal Mining UK ("KMUK") for US$118 million (about 760 million yuan) in cash, so as to acquire the Bougouni lithium mine assets in Mali, Africa.
On May 29, Jiangxi Ganfeng Lithium Group Co., Ltd. announced that the company or its subsidiaries intend to subscribe for an additional equity of not more than 9.9% of the total share capital of Leo Lithium Limited in Australia at a price of A$0.81 per share, with a total transaction amount of A$106.11 million, thereby strengthening the cooperation with Leo Lithium in the Goulamina spodumene mine project in Mali, Africa, and further protecting the company's demand for lithium resources.
If Guoxuan Hi-Tech can successfully invest in Morocco this time, it may set a precedent for Chinese lithium battery companies to build battery factories on the African continent.
In overseas markets outside Africa, Guoxuan Hi-Tech has also touched a lot. Last year, the company's subsidiary announced the construction of a battery material factory in Michigan, USA, according to the surging news reporter's recent understanding, the current Michigan government subsidies for this project have been in place, and the project will enter the land purchase stage. Last year, Guoxuan Hi-Tech's acquisition of the Bosch Group's Göttingen plant in Germany was also successfully put into operation, and localized operations in Europe began.
However, the relevant person in charge of Guoxuan Hi-Tech also told the surging news reporter that investing and setting up factories overseas faces a series of problems such as being familiar with local laws and regulations, labor systems, and cultural customs. "In Europe, for example, electricity is expensive and workers work shorter hours. In China, the amount of work that can be completed by two shifts of workers in European factories requires 4-6 shifts of workers, and factories also need to hire more people. The person in charge said frankly.