The first aerospace coenzyme Q10 terminal product in China began to enter the civilian market

"In 5 to 10 years, the raw materials currently used for the production of lithium-ion batteries will be exhausted." In the Future Energy Development Forum at the World's Top Scientists Carbon Conference held on November 2nd, the 2019 Nobel Prize in Chemistry Winner Stanley Whittingham said so.

Now is the period of vigorous development of new energy vehicles. According to data from the Passenger Association, the retail sales of new energy vehicles from January to October this year reached 2.139 million, a year-on-year increase of 191.9%. The "heart" of new energy vehicles is the lithium-ion power battery. China Minmetals Securities Research Report pointed out that power batteries account for approximately 30% to 40% of the cost of electric vehicles.

If relevant materials face exhaustion, new energy vehicles will lose their "heart" and their development will inevitably be restricted. Since Sony successfully developed lithium batteries in 1992, in just 30 years, where did the "shortage dilemma" of lithium battery raw materials come from? Specifically, what kind of resource became "the shortest piece of wood on the barrel"?

Wang Zidong, deputy secretary general of the China Automotive Power Battery Industry Innovation Alliance, said that the "depletion" of lithium battery raw materials may mainly refer to cobalt resources.

Under the new energy boom, resource demand has doubled

2021 is the "year of outbreak" of new energy vehicles. According to data from the Passenger Federation, in October this year, the retail sales of new energy passenger vehicles reached 321,000, a year-on-year increase of 141.1%. This result was achieved in the context of a year-on-year decline in overall sales in the automotive industry.

Earlier, it was mentioned in the "New Energy Vehicle Industry Development Plan (2021-2035)" issued by the General Office of the State Council that the sales of new energy vehicles in 2025 should reach about 20% of the total sales of new vehicles.

According to data released by the China Automobile Manufacturers Association (hereinafter referred to as the China Automobile Association), the overall penetration rate of new energy vehicles has reached 11.58% from January to September this year. Among them, in the passenger car field, the market penetration rate in September has exceeded 19%. Compared with the overall penetration rate of new energy vehicles of 5.4% in 2020, this has doubled in the first nine months of this year.

It is estimated that by 2035, new energy vehicles may occupy "half of the country" in the automotive industry, achieving substantial sales growth. The "Energy-saving and New Energy Vehicle Technology Roadmap 2.0" compiled by the Ministry of Industry and Information Technology Department of Equipment Industry and led by the Chinese Society of Automotive Engineers shows that by 2035, new energy vehicles will account for more than 50% of total vehicle sales. Citic Futures cited data from EV Sales in its research report, stating that global sales of new energy vehicles will be 3.12 million in 2020, and sales are expected to reach 11.46 million in 2025.

This has also doubled the industry's demand for upstream resources. The research report of China International Financial Securities pointed out that the global installed capacity of power batteries will be 158.2GWh in 2020, and the demand for lithium for power batteries will be about 190,000 tons. It is estimated that the demand for lithium for power batteries will reach 1.07 million tons in 2025, which will increase by 4.6 in 5 years. Times more.

South America or reduced production, lithium resources will be exhausted within a few years?

Under the expansion of demand, "how to obtain sufficient resources" has become a new problem facing the industry. The Research Report of Minmetals Securities pointed out that the global new energy automobile industry chain generally faces "resource anxiety."

According to the "Wen Wei Po" report, Stanley Whittingham stated at the Future Energy Development Forum of the World's Top Scientists Carbon Conference that the raw materials of lithium batteries may be exhausted in the next 10 years. In addition to increasing research on new materials, the recycling of lithium batteries Utilization is imminent. Most of the world's lithium mines are produced in South America. According to Stanley Whittingham's estimation, the production of lithium mines in South America will be reduced within two to three years. The lithium supply chain may encounter problems within 10 years, and it is necessary to take precautions.

Stanley Whittingham, John Goodenough, and Akira Yoshino won the 2019 Nobel Prize in Chemistry for their research contributions to lithium-ion batteries, and they are collectively known as the "Fathers of Lithium Batteries." .

Stanley Whittingham mentioned South America as the most important lithium resource distribution area in the world. The National Securities Research Report quoted the US Geological Survey as saying that as of the end of 2020, the global lithium resources are about 86 million tons. The sum of lithium resources accounts for nearly 60% of the total global lithium resources, Australia's lithium resource reserves account for 8% of the world, and my country's lithium resource reserves account for 6% of the world.

So, is there the possibility of "actively reducing production" in the next few years for the extraction of lithium from salt lakes in South America? In response, a staff member of the Securities Department of Ganfeng Lithium (002460, SZ) said: "What we are seeing now is that everyone is actively expanding production, and the upstream, midstream and downstream are expanding. There is no reason why they are reducing production. "The staff member said that the current global demand for lithium resources is very large, and there is no reason for the upstream to actively reduce production.

However, "passive production cuts" may also occur. Mo Ke, the chief analyst of True Lithium Research, said that the grades of South American salt lake lithium resources and Australian ore lithium resources (referring to the content of useful components or useful minerals in ore or beneficiation products) are high, the development level is also high, and the cost is low. Basically, the resources of these two places are used now. The demand for lithium will grow rapidly in the next few years, and the supply of lithium resources in these two places may encounter problems within 10 years.

If the extraction of lithium from salt lakes in South America reduces production, will lithium resources face exhaustion within 10 years? Mo Ke believes that there are other places with lower grade lithium resources that can be developed and utilized. Generally speaking, there will be no shortage of lithium resources in ten to twenty years.

The relevant staff of Ganfeng Lithium Industry said that lithium is a metal with relatively abundant reserves, which is enough to support the development of new energy. From the perspective of total reserves, lithium resources can be used for at least 40 to 60 years, and "depletion within ten years" is almost impossible.

Yu Qingjiao, secretary-general of the Zhongguancun New Battery Technology Innovation Alliance and chairman of the Battery Hundreds Association, believes that several leading lithium companies in the world have large reserves of lithium resources, but due to high mining costs, low prices, and geopolitical factors, Many lithium mines have not been developed or are in a state of discontinued production.

"I personally believe that when the price of lithium rises to a certain level, it will definitely stimulate the enthusiasm of mining enterprises for development, and the production capacity of lithium mines will increase substantially." Yu Qingjiao said.

The precious metals nickel and cobalt. Who is the "cask shortcoming"?

Although the possibility of lithium resources facing exhaustion in the short term is not high, the raw materials of lithium batteries not only refer to lithium resources, but also include other raw materials currently used for the production of lithium-ion batteries. Some precious metals may indeed be exhausted. A senior industry insider said: "There are still nickel and cobalt in lithium batteries, and the current supply is very tight."

It is understood that nickel and cobalt are mainly used in ternary batteries. Ternary battery, that is, a lithium ion battery using nickel cobalt lithium manganate ternary positive electrode material or nickel cobalt lithium aluminate ternary positive electrode material. Among them, "ternary" refers to the nickel, cobalt, manganese or aluminum in the cathode material.

CITIC Futures Research Report pointed out that the global power battery installed capacity in 2020 is 137GWh, of which ternary batteries account for up to 82%. It is estimated that by 2025, the global installed capacity of power batteries will reach 493GWh, with ternary batteries accounting for 74%.

The increase in demand for ternary batteries will also cause the market's demand for nickel and cobalt resources to soar. CITIC Futures Research Report pointed out that the global demand for nickel for power batteries in 2020 will be 73,000 tons. It is estimated that the global demand for nickel in the global new energy vehicle market will reach 270,000 tons in 2025, nearly four times the demand in 2020.

According to relevant research reports of Tianfeng Securities, the global amount of cobalt used in new energy vehicles will be 18,400 tons in 2020, and it is expected to reach 95,100 tons in 2025, achieving a four-fold increase in five years.

The above-mentioned industry insiders stated that 60% to 70% of cobalt resources are in the Congo (DRC) in Africa; in terms of nickel resources, the current high-grade nickel sulfide ore has basically been mined, and now only the laterite nickel ore, which is very difficult to mine, is left. These two kinds of resources are scarce. From this perspective, we must look at the problem of "Lithium battery raw materials facing exhaustion".

If it is the shortest board on the barrel that determines how much water a wooden barrel can hold, then in the field of lithium-ion batteries, who is the "shortest board" of cobalt and nickel?

The Guosen Securities Research Report cited data from the US Geological Survey that the global nickel resource reserves in 2020 are about 89 million tons, of which about 60% are laterite nickel ore and about 40% are nickel sulfide ore. Based on the global production of 2.5 million tons of nickel ore in 2020, the static mining life of global nickel ore is about 35 years.

Wang Zidong, deputy secretary-general of the China Automotive Power Battery Industry Innovation Alliance, said that Stanley Whittingham's statement that "the lithium battery raw materials will be exhausted within ten years" may mainly refer to cobalt resources.

The research report of Tianfeng Securities pointed out that in 2020, the global amount of cobalt used in new energy vehicles reached 18,400 tons, an increase of nearly 20% over 2019. However, due to the impact of the epidemic and other factors, the global cobalt mining project in 2020 has a net reduction of 11,700 tons. . According to the forecast of Tianfeng Securities, the global cobalt industry will always be in a tight balance in the next five years, and there will be a continuous shortage of cobalt resources from 2021 to 2025.

In order to cope with the problem of the shortage of cobalt resources, major manufacturers are developing towards "high nickel". The CITIC Futures Research Report pointed out that substituting nickel for cobalt with high nickel will not only reduce the cost of raw materials, but also increase energy density and reduce the cost of unit energy. This is the future development direction of ternary materials.

According to data from CITIC Futures, in 2020, NCM811 (the ratio of nickel, cobalt and manganese is 8:1:1) and NCM622, the two high nickel materials, account for 26% and 29% of the ternary materials, respectively. It is estimated that by 2025, the proportion of NCM811 will increase to 56%, while the proportion of NCM622 will drop to 26%.

In other words, the total proportion of high-nickel materials will increase to 82% by 2025, and the demand for cobalt resources for ternary batteries will be further reduced.

At the same time, many manufacturers have also begun to deploy in the field of cobalt-free batteries. According to the reporter of "Daily Economic News", at present, head battery suppliers such as CATL, BYD, and LG have begun to develop cobalt-free batteries. In July of this year, Honeycomb Energy, a subsidiary of Great Wall Motors, has achieved mass production of cobalt-free batteries.

How to solve the resource problem: grab mine or recycle

In addition to deploying "high nickel" and "cobalt-free" to reduce dependence on scarce resources, domestic companies have also launched a "battle for quarrying."

In January this year, Yiwei Lithium Energy and its controlling shareholder Tibet Yiwei Holding Co., Ltd. subscribed for the non-public offering of Huayou Cobalt (603799, SH) for 1.8 billion yuan. This move is considered by the outside world to indirectly deploy multiple cobalt mines in Congo (DRC).

In April of this year, CATL acquired a 25% stake in Luoyang Molybdenum's Sun Company KFM Holdings Co., Ltd. through an indirect holding of Ningbo Bangpu Times New Energy Co., Ltd. with an investment of USD 137.5 million. The latter holds a 95% interest in the Kisanfu copper-cobalt mine project in Congo (DRC).

In August, Luoyang Molybdenum announced that it would invest an additional US$2.51 billion in the Congo (DRC) TFM copper-cobalt mine in which the company holds 80% of its shares for the construction of three production lines. It is expected to be completed and put into production in 2023. After reaching capacity, the annual average output of new copper will be about 200,000 tons, and the average annual output of new cobalt will be about 17,000 tons.

In addition to the competition for "cobalt grandma", in May this year, Yiwei Lithium Energy and Ganfeng Lithium also increased their upstream nickel resources through joint ventures in the construction of nickel mine projects and equity stakes in related companies. From July to September this year, Ningde Times and Ganfeng Lithium also staged a "war of cutting Hu" around the acquisition of Millennium Lithium. However, recently, the Canadian lithium company American Lithium announced that it would acquire Millennium Lithium at a higher price ($400 million), and CATL is also in a position of being "cut off".

For enterprises, it is indeed a way to break the game by "grabbing mines" to lay out core mineral resources in the upstream. But starting from the entire industry, no matter who has more nickel, cobalt, or lithium, it can't change the reality that resources are used less and less. In this context, strengthening recycling has become a feasible solution.

Stanley Whittingham also mentioned that the recycling of lithium batteries is imminent. A senior industry insider said that with the continuous exploitation of natural resources, there will definitely be a day of exhaustion. Based on the requirements of sustainable development and green development strategies, resources must be recycled.

A staff member of the Securities Department of Ganfeng Lithium Industry said: “We can extract lithium from some decommissioned batteries, and we can also recycle them. We believe that by 2035, a considerable proportion of lithium resources will be directly recycled from decommissioned batteries. of."

Tianfeng Securities Research Report pointed out that electric vehicles generally enter the replacement cycle in 5 to 6 years, and the real start of the ternary battery volume in 2017~2018, it is expected that my country will usher in the first round of ternary battery retirement from 2022 to 2023 tide.

When the first round of ternary battery decommissioning is coming, has the power battery recycling industry been fully prepared to successfully complete the recycling and realize the recycling of nickel, cobalt, and lithium resources? From the current point of view, this may not be the case. The recycling of power batteries still faces many difficulties.

Mo Ke said that the current (power battery) recycling volume is far behind the increase in demand, and the gap between the two is still widening. Many recycling capacity is idle. How to recycle waste batteries is a big problem.

It is understood that the Ministry of Industry and Information Technology has previously released a number of batches of new energy vehicle waste power battery comprehensive utilization "white list", a total of 27 companies on the list. However, some people in the industry said that the "white list" only serves as a guide, not a "licensed qualification", and it is not compulsory.

The Xinhua News Agency previously stated that in 2020, my country’s cumulative power battery decommissioning amounted to about 200,000 tons, of which a large number of them flowed into informal channels such as small workshops, bringing safety and environmental hazards. Merck said that the current ownership of the battery belongs to the car owner, and the automaker or battery factory just wants to recycle it, and it also depends on whether the car owner feels the price is right.

Some insiders pointed out that the power battery recycling industry is currently facing the situation of "bad money driving out good money": because recyclers who do not have business qualifications do not need to invest too much environmental protection costs, the price (for discarded batteries) must be higher than that of regular manufacturers. To be higher. But this will also cause environmental pollution and waste of resources.

The above-mentioned industry insiders stated that it is necessary to establish clear norms and standards, and at the same time combat the influx of waste batteries into the black market, so that the power battery recycling industry can develop healthily and solve the problem of resource shortage.