Throw away the hammer! Premium is nearly 9000 times, which sends a positive signal to the lithium prices to stop falling and stabilize

According to the online natural resources trading system of Jiangxi public resources trading platform, on November 28th, a company won the mining right of ceramic clay (including lithium) mine in Zuojiali mining area of Zhenfeng County, Fengxin County, Jiangxi Province for 2.51 billion yuan, with a starting price of 280000 yuan, which is nearly 9000 times higher than the starting price. At 16:51 on November 29th, the transaction ended. 

This move conveys the confidence of lithium enterprises in stabilizing the price of lithium carbonate. Some insiders believe that with the gradual balance between supply and demand in the market in the future, the price of lithium is expected to stabilize and rebound. 

1) Send a positive signal that lithium prices have stabilized and stop falling

The mining area is located in Yishang Town, Fengxin County and huaqiao town City, Yifeng County, with an area of 0.843 square kilometers, an annual development and utilization rate of 9 million tons, and a mining period of 22.9 years (excluding a construction period of 1 year)

In terms of resource reserves, within the open-pit mining boundary of the project (the minimum mining elevation verified by industrial indicators is more than 320m), the amount of ceramic clay (containing lithium) is 2062.57 million tons, the associated lithium oxide (Li 2O) is 638769 million tons, with an average grade of 0.31%, and the associated rubidium oxide (Rb 2O) is 3028.88 million tons, with an average grade.

A total of 722.31 million tons of ceramic soil (including lithium) ore, 2.16333 million tons of associated Li 2O (lithium oxide) with an average grade of 0.30%, and 1.052803 million tons of associated Rb 2O (rubidium oxide) with an average grade of 0.15% have been identified in the entire region (above an elevation of+220 meters).

In addition, according to the instructions for online auction of mining rights transfer, the winning bidder has to bear a policy disposal fee of 145,425,600 yuan within the mining area, and promises to pay the policy disposal fee in full before signing the transfer contract.

In the face of the "low operation" of lithium carbonate prices, Ningde stopped production and adjusted its lithium carbonate production enterprise in Yichun, Jiangxi Province in September. Ningde's discontinued Jianxiawo lithium porcelain clay concentrator is also located in Yishang Town of Fengxin County and huaqiao town of Yifeng County.

Generally speaking, the mining period of lithium ore is relatively long, about 4-5 years. The difference in mining time and cost is the root cause of the cyclical nature of the lithium industry. Some people in the industry believe that obtaining low-grade lithium-containing porcelain clay resources sends a positive signal that lithium enterprises have confidence in the future stabilization of lithium carbonate prices. 

2) The 'Asian Lithium Capital' has added over 5 million tons of lithium resources

On November 6th, the Ministry of Industry and Information Technology issued the Action Plan for High-quality Development of New Energy Storage Manufacturing Industry (Draft for Comment), which clearly proposes to increase support for China's lithium, cobalt, nickel and other mineral resources, scientifically and orderly liberalize mining rights, and enhance domestic resource support capacity.

Industry insiders have pointed out that in the context of the global transition to a low-carbon economy and the electrification of automobiles, the strategic position of lithium resources is becoming increasingly prominent. It is very important to further intensify the exploration and development of lithium resources to ensure the supply of lithium resources.

In July this year, Yichun Natural Resources Bureau announced that Yichun is vigorously promoting a new round of strategic actions of mineral exploration breakthrough, and achieved a series of results. It is reported that in February 2023, three ceramic soil (including lithium) mineral exploration projects will be established in Yichun, including the eastern section of Shijiali in Yifeng County, Jinzifeng in Fengxin County - Zuojiali in Yifeng County, and Baishili in Yifeng County. These three projects have all completed field acceptance and report review this year. Among them, after the merger of the eastern and western sections of the Shijiali mining area, the total area is 4.217 square kilometers, and the identified resources of ceramic soil (lithium-containing) ore exceed 800 million tons, making it the second largest ceramic soil (lithium-containing) mine in Yichun City.

The mining right auction in Jinzifeng Zuojiali mining area has identified 722 million tons of ore and 2,163,300 tons of associated lithium oxide, with an average grade of 0.3%; The proven ore quantity in Baishili mining area is 267 million tons, and the associated lithium oxide is 902,300 tons, with an average grade of 0.34%. If calculated according to the annual production scale of 5 million tons, it can be used for about 13.5 years. A total of 1.793 billion tons of ceramic clay (lithium-bearing) minerals and 5.0258 million tons of associated lithium oxide resources have been proved in the three mining areas.

Among them, Jinzifeng in Fengxin County and Zuojiajia in Yifeng County, as well as Baishili in Yifeng County, have attracted the attention of many new energy companies because of their good grade of lithium resource.