Cobalt and lithium companies frequently go overseas to mine new energy vehicles and generate upstream demand

Since the beginning of this year, the sales of new energy vehicles at home and abroad have soared, and the market value of many new energy vehicle companies has reached new highs, which further highlights the value of the new energy vehicle industry chain.

Under this circumstance, many cobalt-lithium companies have begun to advance their positions and layout.

On December 24, Luoyang Molybdenum's secretary of the board Yue Yuanbin said: “We believe that the new energy vehicle boom will continue to increase the demand for upstream battery metals.

Fang Yutao, a researcher at Minsheng Securities, analyzed: “The global demand for power batteries has a high degree of certainty, and demand is gradually picking up.

Frequent overseas layouts

"Ternary" is the abbreviation for the combination of nickel, cobalt, manganese or nickel, cobalt and aluminum.

According to the statistics of the United States Geological Survey, the world has proven cobalt reserves of 7 million tons, of which Congo (DRC) reserves are 3.

Because of its scarcity, cobalt is the most expensive material among the three metals.

Public information shows that Kisanfu is located in Lualaba Province of Congo (DRC).

　　Lithium, as another major metal material for new energy vehicle batteries, is also the focus of companies getting stuck in advance.
On December 8, Tianqi Lithium also announced that its wholly-owned subsidiary, TLEA, plans to increase its capital and shares to introduce strategic investor IGO, an Australian listed company.

　　Yue Yuanbin said that it is necessary to understand the phenomenon of the current rising period of commodities and many companies seeking opportunities in overseas resource sectors: "First, the distribution of mineral resources itself is not balanced.
Copper and cobalt are relatively scarce resources in China.
Therefore, Chinese mining companies will inevitably need to go global and acquire resources from the world.

　　Secondly, the rise in commodity prices has increased the motivation of companies to go global, but bulk commodities have a strong cyclical nature.
Therefore, companies must grasp the rhythm and balance cash flow in the process of going global in order to effectively manage risks.
"

　　However, in recent years, the importance of ESG performance in overseas acquisitions has become more and more prominent.
Especially for mining and resource companies, environmental and community risks directly affect operations.
Therefore, whether companies can obtain "social licenses" "It is one of the keys to the success of overseas projects.

　　Yue Yuanbin said: “Domestic companies started relatively late in terms of risk and ESG management, and have a low degree of integration with international standards.
This is detrimental to our reputation building and mitigation of operational risks.
Chinese companies should adopt a more active and open attitude.
Integrating with international standards, strengthening communication, and building a responsible reputation will help us achieve our ambitions on a larger stage.
"

　　Collaborative Empowerment

　　In fact, while increasing the layout of overseas investment, many companies are also working hard to meet the high growth of the industry brought about by this round of new energy vehicle fever.
From the perspective of net profit growth in the first three quarters, Huayou Cobalt and Hanrui Cobalt have increased by 640.
27% and 502.
22%, respectively, and have begun to show the dividends brought about by the growth of downstream demand.

　　To this end, cobalt lithium companies are also tapping the potential value of stock minerals.

　　Luoyang Molybdenum's approach is to allow the acquired minerals to graft the resources of its subsidiaries, improve internal management, and play a synergistic effect.
In Yue Yuanbin's view, the company's experience in managing and operating TFM will also provide a good reference for future project development.
"This project is rich in resources, has great potential, and has multiple options.
Various synergies also depend on how we develop, construct and operate the project in the future.
"

　　Yue Yuanbin said: “The first is regional coordination.
The project is also located in Congo (DRC).
Through the operation of TFM, Luoyang Molybdenum has established rapport with the Congo (DRC) central government, local governments, and communities.
In 2016, Luoyang Molybdenum The acquisition of TFM for US$2.
65 billion.
The mining area covers an area of ​​more than 1,500 square kilometers and is one of the world's highest grade copper-cobalt mines.
It has great resource exploration and development prospects.
TFM mines achieved a copper metal output of 177,956 tons in 2019 and a cobalt metal output of 16,098 tons.
No.
The second is the synergy of varieties.
The main metal varieties in the mining area are still copper and cobalt.
Luoyang Molybdenum has accumulated rich experience in these two varieties; since the Chinese management team took over in April 2019, the TFM business has shown new vitality.
Through the improvement of management efficiency and technological improvement, the results of cost reduction and efficiency increase were significant, and the total cash cost in 2019 was reduced by 130 million US dollars.
The third is operational synergy.
The two mines are only 33 kilometers apart, and there are many synergy in infrastructure and technological processes.
may.
"

　　In 2019, Ganfeng Lithium included Minera Exar of Argentina in the bag, and deployed the upstream and downstream integration strategy by leveraging its internal industrial synergy.
Minera Exar owns the Cauchari-Olaroz lithium salt lake project in Jujuy Province, Argentina.
The average lithium concentration of the project reaches 592mg/L, the lithium content is 3,729,700 tons, and the lithium carbonate content is 19,852,700 tons.

　　Ganfeng Lithium said that the company has been accelerating the production schedule of the Cauchari-Olaroz lithium salt lake project, which is scheduled to start production in 2021.

Transfer from: Investment Express