Kings Resource to build fluorinated lithium ion battery material project 11-10-2021

On October 13, Kings Resources announced that the company signed a Project Investment Agreement with the Committee of the Jiangshan Economic Development Zone of Zhejiang Province for a project with an annual output of 25,000 tons of fluorinated lithium ion battery materials and 80,000 tons of fluorite. The total investment of this project is approximately RMB 1.55 billion, of which the fixed asset investment is about RMB 1.48 billion.

Kings Resources is currently the largest enterprise in China's fluorite industry in terms of resource reserves, mining, and processing scale. According to its disclosure, as of the end of 2020, the company had reserves of about 27 million tons of fluorite resources, as well as about 13 million tons of minerals, accounting for about 30% of the country's total reserves.

New project comes among shortage of fluorite materials in China

At present, China's fluorite production accounts for nearly 60% of global production, but its resource reserves are only about 13% of the world's total. However, while the fluorite chemical industry in China is large, the industry is still rather weak, which is due to a certain extent to a large loss of fluorite resources.

As China continues to increase efforts to encourage the development of the fluorite chemical industry, the supply and demand pattern of fluorite has changed from oversupply to a self-sufficiency rate of less than 90%, and the shortage of upstream fluorite resources may gradually become more prominent.

In 2021, Kings Resources plans to produce a total of 450,000 tons of various fluorite products. In the future, the controllable output will gradually reach an annual output of 1.5 million tons within five years. In March of this year, two joint ventures for fluorite mineral processing and fluorite chemical engineering will be established by Baogang Group, Zhejiang Yonghe Refrigerant Co., and Longda Group.

Currently, the market price tends to be stable. The price of fluorite was RMB 2656 per ton in early September, and the price was RMB 2700 per ton on October 12, a small increase.

In the first half of 2021, Kings Resources relied on the expansion of its scale of production and sales, achieving a revenue of RMB 417 million, a year-on-year increase of 29%. Net profit attributable to parent companies was about RMB 100 million, a year-on-year increase of 11%. At the same time, affected by the decline in the price of fluorite, the net profit margin of Kings Resources was 24%, down nearly 4% year-on-year.

Lithium battery materials expected to be in demand with development of electric car industry

According to a research report of IFC Securities, the current supply for lithium hexafluorophosphate is already tight, with its price rising from RMB 69,500 per ton in August 2020 to RMB 465,000 per ton in early October 2021. IFC Securities judges that the price of lithium hexafluorophosphate will remain high and fluctuate during the first half of 2022. After the second half of 2022, supply should increase to meet demand.

Regarding the project, Kings Resources stated in the announcement that the new energy automobile industry is one of the emerging industries that is strongly supported by China, and lithium batteries are the core link in the development of the new energy automobile industry. Electrolytes are the transport carriers of lithium ions in lithium batteries. Lithium hexafluorophosphate is currently the most widely used electrolyte lithium salt, and it is the basic raw material for the development of lithium batteries and new energy industries. Lithium bisfluorosulfonimide may be the future development direction of electrolyte lithium salt.

For more information, please check our China Li-ion Battery E-News.

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