Pacific Securities: Continued upgrading of the lepidomite industry emphasizes long-term opportunities in the industrial chain

The Zhitong Finance App learned that Pacific Securities released a research report saying that China has abundant reserves and clear production areas. It is the core local raw material to guarantee the independent supply of lithium resources. The resources are concentrated in Yichun, Jiangxi, and large-scale mining belts have been discovered one after another; the industry incorporates strategic mineral supervision and superimposed mine rectification, and the supply and demand pattern is likely to remain tight in the short term, and the competitive advantage of the medium- to long-term industry will lean towards resource+integrated leaders. The lithium extraction process routes for lithium mica are diverse, and low-carbon comprehensive recycling is the main line of long-term technology upgrading.

Pacific Securities's main views are as follows:

China has abundant reserves and clear distribution of production areas. It is the core local raw material to guarantee the independent supply of lithium resources

Resources are concentrated in Yichun, Jiangxi, and large-scale mining belts have been discovered in Xiangchuan and Mongolia; the industry incorporates strategic mineral supervision combined with mine rectification, and the supply and demand pattern is likely to remain tight in the short term, and the competitive advantage of the medium- to long-term industry will be skewed towards resource advantage+integrated leaders.

The lithium extraction process routes for lithium mica are diverse, and low-carbon comprehensive recycling is the main line for long-term technology upgrades

Sulfate roasting is currently the mainstream of mature mass production; the development prospects for various new low-carbon lithium extraction technologies are promising, but large-scale industrialization has not yet been implemented due to equipment and cost restrictions.

Low-grade lepidomite development has many advantages

These include a high resource self-sufficiency rate, high comprehensive utilization value of associated rare metals, perfect localization support in the industrial chain, and strong policy support, etc., which are important ways to ensure the safety of China's lithium resources and hedge against fluctuations in overseas supply chains. However, the development process also faced many challenges, such as large fluctuations in ore grade, low recovery rates, high pressure on environmental protection and solid waste disposal, stricter mining approvals, and the risk of lithium price cycle fluctuations.

Companies related to the industrial chain

1) High process flexibility: Improve the cost efficiency of lithium carbonate processing through process methods such as sulfate roasting, and broaden profit margins by recycling associated metals, such as Dazhong Mining, Yongxing Materials, Keliyuan, etc.; 2) Mining and metallurgical integration+resource certainty: open up the full mining-lithium-extraction-battery support chain, focus on self-sustaining compliant lithium mica mines, and lock in cost advantages, such as Ningde Era, Ganfeng Lithium, Guoxuan Hi-Tech, etc.

Risk warning: the risk of lithium price fluctuations, the risk of rising raw ore costs, the risk of tightening environmental protection policies, the risk of technology iteration falling short of expectations, the risk of limited resource extraction, and the risk of weak downstream demand.