Qinghai to Build a 100 Billion Yuan Lithium Industry Base

At 2014 China Qinghai Trade Fair for Green Development Investment, Qinghai EV Rally 2014 was introduced for the first time. With electrical vehicles' eco-friendly features, Qinghai manifested its determination on green development.

Introducing Qinghai EV Rally was just a signal. By leveraging its rich salt lake resources and existing industry foundation, revolving around emerging industries such as lithium resources development, anode and cathode materials of lithium batteries, energy storage batteries and power batteries, Qinghai will have built a 100-billion yuan lithium industry base in 2020, thereby further adjusting structure and expediting industry transformation and upgrading, turning resource advantages into a new impetus for economic advantages. That is the ultimate goal.

Qinghai has more than 22 million tons of proven reserves of lithium chloride, accounting for 83.4% in the total of the country's lithium reserves in salt lakes, and one third in the world's reserves of lithium brine resources. Furthermore, in Qinghai, distribution of lithium resources is highly concentrated, there is a small number of single deposits, mineral resources are of low grade but available in large reserves, which is conducive to comprehensive resource development by large mining, beneficiation and metallurgical enterprises.

In 2011, Qinghai successfully brought in Amperex Technology Limited, which is the world's No. 1 supplier of polymer lithium batteries. At the same time, in view of the close cooperation between upstream and downstream enterprises in the lithium battery industry, and high entry barriers of the high-end lithium industry, Qinghai introduced Pulead Technology Industry Co., Ltd., which holds a series of completely independent intellectual property and core technological results, to build a 10,000-ton lithium iron phosphate production base in the province.

According to information provided by Qinghai Provincial Economic and Information Commission, in this year production capacity of lithium battery cathode materials, mainly lithium iron phosphate produced by Qinghai Taifeng Pulead, will top 10,000 tons in Qinghai, and output of energy storage batteries and power batteries mainly produced by Qinghai New Times New Energy Science & Technology Co., Ltd. and Qinghai Green Grass Technology Co., Ltd. will exceed 30 billion ampere-hours.

As a number of lithium firms such as Qinghai Taifeng Pulead, Qinghai Tuohai New Materials Co., Ltd., Qinghai Green Grass Technology Co., Ltd. gather in Xining Economic Development Area, a lithium industry chain is taking shape. As Qinghai's lithium industry marches forward slowly, national energy restructuring and new energy strategy provide opportunities for Qinghai's lithium industry.In 2012, China unveiled the 12th Five-year Plan for the Strategic Emerging Industries, with the aim of expediting the cultivation and development of strategic emerging industries such as environmental protection, high-end equipment manufacturing, new energy, advanced materials, and new-energy vehicles. In 2012, BAIC Group and Jieshen Group jointly established a special vehicle production base with an annual production capacity of 5,000 in Qinghai. In 2013, high-precision aluminum alloy auto parts and other related parts were launched one after another. The seemingly irrelevant industry layout makes it possible to prolong the lithium industry industry and form the integration of equipment manufacturing and the lithium battery industry. In September 2013, four ministries and commissions including the Ministry of Finance jointly released the Notice on Continuing to Carry out the Promotion and Application of New-energy Vehicles, kicking off a new round of new-energy vehicles promotion.

Given its superior resource advantages, favorable policy, huge market demand, and a relatively complete lithium industry chain formed by Qinghai through years' efforts, Industry insiders predict that Qinghai's lithium battery industry is entirely possible to evolve into a world-class lithium industry base with annual output value of 150 billion yuan. Certainly, there is bound to be difficulties in development, and there are challenges as well as opportunities. “In recent years, there has been great enthusiasm for investing in the lithium industry. With the extension of the industry chain, there has been an increase in M&A and reorganization, and the industry has over-capacity on the whole. As market competition further intensifies, price wars for some products are on the verge of “turning white-hot”, said Zhang Jiangfeng, secretarygeneral of the Lithium Chapter of China Non-Ferrous Metals Industry Association, “Severe competition has an impact on Qinghai's primary industry dominated by raw materials. In Qinghai, lithium resources development is still confined to mining and primary processing. Lithium carbonate is available in single variety, and the upstream is severely out of sync with the downstream. Only by stepping up the R&D of upstream supporting technologies and downstream key technologies after making breakthroughs in core technologies, gaining proprietary intellectual property, and building an industry layout with clear regional division of work, segmentation of industry links, reasonable division of work, and industry clusters, can Qinghai cope with the fierce competition in the international lithium market.“