On August 4, Weihua issued an announcement stating that Sichuan Zhiyuan Lithium Co., Ltd. (hereinafter referred to as "Zhiyuan Lithium"), a wholly-owned subsidiary of the company, recently signed a "purchase agreement" with LG International Corp. (hereinafter referred to as "LGI") 》, LGI intends to purchase finely ground lithium hydroxide from Zhiyuan Lithium, of which 1,500 tons will be shipped between July 2020 and December 2020.
LGI belongs to the LG Group of South Korea. The purchase contract signed by LGI and Zhiyuan Lithium this time should be to meet the requirements of LG Chem, a subsidiary of LG Group.
Thanks to the vigorous development of the global electric vehicle industry, the demand for power batteries is growing rapidly. LG Chem, a subsidiary of LG Group, has been expanding rapidly in recent years. According to LG Chem's previous disclosure, the company currently squeezes more than 870 billion yuan in orders, which will keep it busy in the next five years.
In order to ensure a stable supply of battery raw materials, LG Chem has been actively purchasing raw materials in recent years. In September 2018, LG Chem signed a supply contract with Ganfeng International. From January 1, 2019 to December 31, 2025, Ganfeng Lithium and Ganfeng International sold lithium hydroxide to LG Chem. And the total amount of lithium carbonate products is 92,600 tons.
According to Zhiyuan Lithium, in addition to supplying 1,500 tons of finely ground lithium hydroxide to LGI this year, the two parties will also negotiate a purchase and supply order for 2021 before the end of this year.
According to Battery China.com, Zhiyuan Lithium currently has an existing lithium salt production capacity of 23,000 tons, and another 17,000 tons of production capacity is still under construction. It is expected to be completed and put into operation in the second half of this year. By then, Zhiyuan Lithium will have an annual output of 40,000 tons of lithium. Salt production capacity.
On the customer side, Zhiyuan Lithium currently has signed long-term supply agreements with leading companies in the industry, such as Ningde Times, Xiamen Tungsten Industry, and Shanshan Energy, and the company's lithium salt business continues to develop steadily.
In addition, the first-phase production capacity of the Lithium Metal Project of Shengwei Lithium Industry, a wholly-owned subsidiary of Weihua Co., Ltd., has now entered the equipment installation stage and is expected to be completed and put into operation in the third quarter.
It is worth mentioning that Weihua also acquired Sichuan Shengtun Lithium Industry Co., Ltd. last year. Shengtun Lithium holds 75% of Jinchuan Oino Mining Co., Ltd. shares. Through the acquisition of Shengtun Lithium, all the lithium concentrate produced by Oino Mining will be sold to Zhiyuan Lithium for the production of lithium salt, ensuring the supply of lithium raw materials, reducing costs and enhancing the competitiveness of the company`s lithium salt products .