As of the end of 2021, Livent has 20,000 tons of lithium carbonate. The lithium carbonate plan will be expanded to 40,000 tons in 2023, 70,000 tons in 2025, and 100,000 tons of lithium carbonate in 2030.

(report producer/author: Wugang Securities, Sun Jingwen, Wu Shuang)

Looking at the global production capacity, efficient adsorption has become one of the main solutions for the new generation of lithium extraction of salt lakes

Based on the industrialization example of global salt lake lithium extraction, we believe that efficient lithium absorption and extraction has followed the salt field precipitation method and has become one of the main solutions for lithium extraction of salt lakes in the world, and the number of industrialization projects has increased rapidly in recent years. From the perspective of resource endowment, economy, ESG, mineral rights distribution, and infrastructure:

From the perspective of resource endowment: For salt lake brine with global suboptimal grade (low lithium ion concentration and complex chemical components), or salt lake projects in suboptimal areas (cannot build salt fields due to terrain conditions, or large rainfall), lithium absorption and extraction are the preferred solution; even for salt lake projects with high lithium ion concentration, although it is not necessary to use hard, adsorption can still help them significantly improve recovery and effective production capacity under limited halogen extraction strength and within limited salt field area, so it is also considered in the technical transformation and upgrading options.

From an economic perspective: most of the development resource providers of Greenland Salt Lake projects hope to seize the historic price high of the lithium industry, put into production as soon as possible, and maximize project returns. This is especially important for new entrants who have passed high premium acquisitions from 2021 to 2022. If salt fields are evaporated, the long halogen drying cycle cannot be escaped. Therefore, efficient adsorption, especially original halogen adsorption, has become an ideal solution.

From the perspective of ESG: the direct lithium extraction process represented by the adsorption method can greatly reduce the area of ​​salt fields, and even no need to build salt fields (if potassium fertilizer is not produced), so the environmental footprint is lower, so the original appearance of the salt lake's natural ecology can be maintained as much as possible. In addition, the interference of natural factors (rain, snow, mountain torrents) in production is also less affected.

From the perspective of mineral rights distribution: In the "lithium triangle" in South America, there are many complex situations of multiple mining rights in multiple companies on the same salt flat, and it is not easy to merge and integrate them. If each develops and builds all salt fields, it is not realistic. We believe that using original halogen adsorption and extraction of lithium will be one of the solutions.

From the perspective of infrastructure: "industrial continuous production" such as adsorption method requires mining areas to have more complete power and natural gas guarantees. Therefore, some resource providers choose to adopt mature processes such as evaporation and precipitation in the first phase of production capacity. After the initial production and the infrastructure is completed one after another, new processes such as adsorption are advanced in the second phase of production capacity or technical improvement optimization.

Argentina Hombre Muerto Salt Lake—Livent: a pioneer in the global adsorption and lithium extraction process

Livent (predecessor FMC Lithium) The Fénix lithium extraction facility in Hombre Muerto Salt Lake in Argentina is the earliest industrialization case in the world that adopts the adsorption and lithium extraction process. In 1986, Livent signed an agreement with the Argentine government for the development of Hombre Muerto Salt Lake. In 1998, selective adsorption and lithium extraction devices with high technical content were commercially produced, providing the company with low-cost and high-quality basic lithium hydroxide production bases at the back end. Although Hombre Muerto Salt Lake can fully utilize traditional precipitation methods to extract lithium, Livent, as a veteran lithium deep processing manufacturer who is proud of its leading technology, decided to become a pioneer in adsorption and extraction of lithium out of innovation and attention to lithium extraction efficiency at that time. The company subsequently purchased a patent for aluminum-based adsorption materials from Dow, the United States, and developed a selective purification adsorption method through self-development and update. This process allows lithium extraction to produce products with shorter production cycles, lower impurities and smaller salt fields, improving the efficiency of rapid energy expansion and reducing initial capital investment. Although it has experienced a long and tortuous running-in period after its production, it still does not prevent it from becoming a practitioner of innovative lithium extraction technology and becoming one of the few manufacturers in the world that can use salt lake lithium carbonate to causally produce high-quality single-water lithium hydroxide. As of the end of 2021, Livent has 20,000 tons of lithium carbonate. The lithium carbonate plan will be expanded to 40,000 tons in 2023, 70,000 tons in 2025, and 100,000 tons of lithium carbonate in 2030.At the same time, the company is also working with third-party process providers such as E3 Metals or self-developed to further improve technical transformation and optimization, achieving re-optimization of yield and energy consumption.

is adopted in the Hombre Muerto Salt Lake with its own developed selective purification and adsorption method (patented process). It is necessary to first extract 600ppm of brine using the extraction well, and evaporate and concentrate in a small salt field to a certain concentration, and then enter the adsorption workshop for lithium extraction. This process has at least two advantages: (1) It greatly improves production efficiency, which can shorten the production cycle of lithium carbonate to 4-9 months. In contrast, SQM and Albemarle use the traditional carbonate precipitation method in the Atacama Salt Lake in Chile, and the drying cycle lasts 12-18 months; (2) It uses drying first and then adsorption, which greatly reduces the required salt field area, and the lithium recovery rate is relatively high (can reach 80%, and traditionally only 30%-50%). However, the main disadvantage of this process is that fresh water consumes a lot and requires additional energy consumption, both of which are relatively scarce locally. In addition, unlike solid lithium ore, salt lake resources are flowing and interconnected water bodies below the surface. If more fresh water is brought in during the lithium extraction process, the rinsed and desorbed tail liquid is poured back into the salt lake, which can easily cause the short-term dilution of the lithium ion concentration of the brine. Similar to most of the later lithium extraction projects in the salt lake, Hombre Muerto experienced a painful and long running-in cycle after it was put into production. FMC once needed to purchase lithium chloride and other raw materials on a large scale to support the deep processing and production of the back end.

In recent years, based on ESG factors, Livent has continuously optimized its selective adsorption process. On the one hand, it reduces the freshwater consumption of lithium extraction. On the other hand, it is planned to adopt a large pre-evaporation tank that directly extracts lithium (no longer requires drying) in the future and gradually retires large-scale pre-evaporation tanks, and only a small area of ​​salt pond is retained for storing the adsorbed lithium-containing old halogen, thereby further improving efficiency and reducing the maintenance cost of salt fields. In addition, Livent also cooperates with E3 Metals, which is engaged in the development of direct lithium extraction (ion exchange) and lithium extraction in oil well brine. The technical feature of the latter is that the front end can achieve enrichment and removal at the same time, and electrolysis is used to produce lithium hydroxide at the back end.

Qinghai has become a global technical highland for lithium extraction in salt lakes, and has begun to promote the development of Tibet’s salt lakes

China’s lithium resources ranks sixth in the world, and the lithium resources of brine type account for nearly 80% of China’s lithium resource potential. However, Qinghai’s salt lakes brine belongs to the high magnesium lithium ratio and low lithium ion concentration type, and its resource endowment is far less than that of the first and second-tier salt lakes in South America. Although Tibet’s salt lakes have superior endowments, they are all in plateau and high-altitude high-altitude areas with ecological fragility. Moreover, Tibet is an Asian water tower and a pure land, so it is difficult to simply copy the classic precipitation method of South American salt lakes to extract lithium. After decades of industrialization experiments, especially with the explosive growth of China's demand for new energy vehicles, continuous large-scale capital investment, and the entry of professional lithium extraction technology service providers, Qinghai has become a global technical highland for lithium extraction in salt lakes due to its endowment. The development and industrial application of diversified lithium extraction technologies have become the world's leading position. At the same time, the technology has begun to spill over to Tibet, and is accelerating the development of salt lake resources in Tibet.

We believe that Qinghai Salt Lake lithium extraction has completed the development stage from 0 to 1, and the process routes of each main salt lake are basically fixed, and there is only a certain amount of optimization space. The capacity construction has entered the expansion period from 1 to N. At the same time, Qinghai's salt lake lithium extract has moved from marginal supply to mainstream. For example, Lanke Lithium Industry has already had strong pricing rights in the domestic lithium carbonate market. At the same time, under the important instructions of "accelerating the construction of a world-class salt lake industrial base", Qinghai Province's policy ideas and top-level design for vigorously developing the salt lake industry are also clearer and clearer. In terms of technical trends, "original halogen adsorption" has begun to gain more recognition, and it is expected to be commercially verified on Yiliping, Dachaidan and Xitai Salt Lakes in 2023.

The development of lithium extraction technology based on Qinghai's salt lake has formed the spillover effect , and is accelerating the development progress of Tibet's salt lake. Tibet has multiple salt lakes with an ideal concentration of lithium ion and magnesium-lithium than that of magnesium and lithium. It has sufficient freshwater supply and mostly surface brine, which has higher confidence in reserves. In addition, Tibet also has a large number of salt lakes with lower mineralization and .The main reason for the difficulties in developing salt lakes in Tibet is that the infrastructure is weak, especially the lack of industrial electricity, and the altitude of the mining area is generally above 4,400 meters, with harsh conditions and harsh environmental protection. Overall, we believe that the comprehensive development of Tibet's salt lake is still unpredictable, but with the support of the introduction of new salt lake lithium extraction technology and the " photovoltaic +photostor" clean energy, the construction progress of benchmark projects such as Zabuye is worth looking forward to. The development of high-quality salt lakes such as Mami, Laguo, Dangxiong, and Jiezeze tea card is also expected to make positive progress.

Qinghai Charhan Salt Lake - Salt Lake Co., Ltd. : Lanke joint venture platform is built 30,000 tons of lithium carbonate, and the salt lake is built again 40,000 tons of lithium salt

Salt Lake Co., Ltd. has been deeply engaged in the comprehensive resource development of the Charhan Salt Lake in Qinghai, and uses the old halo tail liquid after extracting potassium fertilizer for lithium extraction. After 12 years of hard work, it has become the largest salt lake lithium resource manufacturer in China and a backbone enterprise for lithium extraction in Qinghai Salt Lake. At present, the company's lithium industry platform in production is Lanke Lithium, which is controlled by 51.42%, which adopts the coupled technology of adsorption + membrane separation and concentration. Lanke Lithium has a total annual lithium carbonate production capacity of 30,000 tons, of which 10,000 tons of old lines and 20,000 tons of new lines; in addition to the Lanke Joint Venture Platform, at the end of May 2022, Salt Lake Co., Ltd. disclosed that it will invest and build a 40,000 tons of basic lithium salt project (including 20,000 tons of lithium carbonate and 20,000 tons of lithium chloride); plus the 30,000 tons of lithium carbonate project of Salt Lake BYD Joint Venture (49.5% holding of Salt Lake Co., Ltd.), which is still in the pilot stage, after all, we expect that the total production capacity of lithium compound controlled by Salt Lake Co., Ltd. will be expanded to 100,000 tons/year around 2025.

Charhan Salt Lake has a total area of ​​5856 square kilometers. It is China's largest soluble potassium magnesium salt deposit and one of the world's largest salt lake . It has a total reserve of 540 million tons of potassium chloride , 12.042 million tons of lithium chloride and more than 4 billion tons of magnesium chloride . The mining rights of Salt Lake Co., Ltd. are concentrated to the west of the Charhan Salt Lake Railway, and a total of about 3,700 square kilometers of Charhan Salt Lake, covering the core section. According to the annual output of 5 million tons of potassium chloride, the annual amount of old halogen can be produced about 200 million cubic meters, of which lithium-containing lithium chloride reaches 200,000 to 300,000 tons, and it has the resource guarantee for building large-scale lithium-enhancing capacity.

Lanke Lithium is a leading enterprise in the lithium extraction of Qinghai Salt Lake. Through more than ten years of hard work and polishing, the coupling technology of adsorption and lithium extraction + membrane separation and concentration has broken through the problem of lithium extraction from "ultra-high magnesium-lithium ratio and low lithium content" brine (to achieve the key separation of magnesium-lithium ratio from 500:1 to 4:1). Review of the development history: (1) In 2007, Salt Lake Co., Ltd. and Beijing Institute of Nuclear Industry jointly established Lanke Lithium Industry, trying to use adsorption method to extract lithium, but the manufacturing cost and crushing rate of adsorbent of the key link of the process - adsorbent was too high, resulting in poor progress; (2) In 2010, Qinghai Fozhao Lithium and Qinghai Weili introduced Russian adsorbent technology to Lanke Lithium Industry through technology investment, old stock acquisition and cash capital increase, achieving a preliminary breakthrough in the key technology of lithium extraction; (3) Since then, Lanke Lithium Industry has still experienced nearly 8 years of optimization and upgrading. After the filling and filling project, it achieved the first full production of 10,000 tons of lithium carbonate equipment in 2018, and started the expansion construction of battery-grade lithium carbonate annually with an annual output of 20,000 tons/year battery-grade lithium carbonate, and achieved a daily output of 10,000 tons in mid-2021. (4) Adsorption + film has fully confirmed its process maturity and production stability. The lithium carbonate production in 2019, 2020, 2021 and 2022Q1 lithium carbonate reached 11,300 tons, 13,600 tons, 22,700 tons and 7,000 tons respectively, and sales reached 11,300 tons, 13,800 tons, 19,200 tons and 6,700 tons respectively. We judge that through recovery rate optimization and other means, Lanke Lithium's production capacity has room for slight optimization and improvement.

Qinghai Chaerhan Salt Lake - Zangge Lithium Industry: Using efficient continuous adsorption and extraction of lithium, it has built a production capacity of 10,000 tons of lithium carbonate

Zangge Mining was established in 2002. In 2007, it achieved the integration of 13 potassium fertilizer companies east of the Chaerhan Railway and Qinghai Kunlun Mining, and started the process of potassium fertilizer resource development.The company owns the potassium salt mining rights certificate of the mining area east of the Charhan Salt Lake Railway in Qinghai. The mining rights area is 724.35 square kilometers (valid until December 2029), accounting for nearly 2/5 of the total area of ​​the Charhan Salt Lake. The estimated utilization reserves of potassium chloride are about 67 million tons and the reserves of lithium chloride resources are about 2 million tons. In addition, the company holds the prospecting rights of the Dalangtan mine area west of Qaidam Basin, with an area of ​​492.56 square kilometers, which can be used as a future resource reserve. In addition, it also indirectly invests in the Mamicuo Salt Lake in Tibet through the Tibetan Qing Fund.

Zangge Lithium, a subsidiary of Zangge Mining, was established in 2017. In 2018, it has successively cooperated with professional lithium service providers such as Lanxiao Technology and Qidi Qingyuan to use the "fine filtration-continuous adsorption removal (aluminum-based adsorbent)-sodium filtration- reverse osmosis- concentration-ion exchange removal-ion MVP concentration process" to successfully achieve the separation of magnesium lithium in brine with ultra-high magnesium lithium ratio and low lithium ion concentration, and obtain a high-purity lithium chloride solution with lithium content ≥30g/L (according to the company's disclosure, the recovery rate of the above link is above 80%) to produce lithium carbonate. The tail halogen after lithium extraction is returned to Carhan to form a cycle. In addition, the production line also has newly extracted extraction for the lithium precipitated mother liquor to recover to improve the yield. Since the lithium ion concentration of Charhan Great Salt Lake decreases from west to east, compared with the adjacent Salt Lake Co., Ltd., the lithium ion concentration in the company's potassium extraction tail halide is lower (only about 50ppm), so more efficient adsorbents and adsorption devices are needed, which instead forces and promotes the development of its lithium extraction technology. At present, the Zangge team is at the industry-leading level in the application practice of adsorption, and the yield of the adsorption section can reach 75-80%.

The company plans to produce an annual capacity of 10,000 tons of lithium carbonate (10 production lines) of the 20,000 tons of lithium carbonate. The actual production and sales in 2021 will be 7553 tons and 10,960 tons respectively, with a capacity utilization rate of about 76%. The production and sales volumes in 22Q1 will be 1,755 tons and 2,153 tons respectively. The annual production and sales target of 10,000 tons will be achieved in 2022 and strive to achieve 11,000-12,000 tons. Given the objective resource endowment, we expect the company's production capacity on the Charhan Salt Lake will remain stable in the future.

Qinghai Dongtai Jiner Salt Lake - Dongtai Lithium Resources: Excellent endowment, electrodialysis method 20,000 tons of lithium carbonate production capacity mature and stable

Dongtai Jiner Salt Lake is located in the western part of the Qaidam Basin in Qinghai. It is a magnesium sulfate subtype salt lake with an altitude of 2683 meters. It is a special large-scale boron ore, super-large lithium ore, and a medium-sized potassium ore. Its brine component is ideal for lithium extraction. It is a high-quality and high-grade salt lake brine in Qinghai. The area of ​​the Dongtai Jinnail Salt Lake Mine Area reaches 314.2 square kilometers. According to the reserve verification report, after excluding the production and mobility amounts from 2018/7/31 to 2021/11/30, the reserves of resource reserves are: brine volume 667.4887 million cubic meters, the porosity reserves of lithium chloride 2.022.8 million tons (equivalent to 1.7619 million tons LCE), and the concentration of lithium chloride is 3030.48 mg/L (equivalent to lithium ion concentration about 494 mg/L). Dongtai Lithium Resources adopts electrodialysis technology to extract lithium, with skilled and stable industry, and the quality of lithium carbonate products reaches the "salt lake battery level" standard. Compared with other technical routes in Qinghai, the advantage of electrodialysis is that the freshwater consumption is lower, but there are certain requirements for the lithium ion concentration of brine. The Dongtai Salt Lake was not fully produced in the early stage, mainly due to the warrant reasons (the prospecting rights need to be converted into mining rights), which led to the restriction of halogen mining. After the mining rights were implemented in 2018, the halogen mining area encountered dilution of rainfall and floods. It once needed to rely on the inventory of old halogen to maintain production. At present, the halogen mining in Dongtai has been restored and the brine channel system is being expanded.

The initial industrial development of Dongtai Salt Lake was led by Qinghai Lithium , and was later incorporated into the newly established Dongtai Lithium Resources Company. As of 2021, Dongtai Lithium Resources Company and its holding subsidiary Qinghai Lithium (74.5% equity) have a total of 20,000 tons of nominal lithium carbonate production capacity and 16,000 tons of actual production capacity. In 2021, it will achieve 10,225 tons of lithium carbonate production, and 12,000 tons of annual output in 2022. Focusing on the future plan: (1) Add 10,000 tons of lithium carbonate and build a 30,000 tons boric acid production line from 2022 to 2023, with an estimated investment of about 1.1 billion yuan; (2) According to the development and utilization plan of the Lithium Boron Potassium Mine of Dongtai Jiner Salt Lake, the 300,000 tons of Potassium sulfate production line is expected to invest about 300,000 tons, and construction will be considered in the later stage depending on the capital situation.We believe that Dongtai Salt Lake has a skilled craftsmanship, but after long-term mining, the brine margin at the front end in the future will determine its actual production capacity.

Qinghai Xitaijiner Salt Lake - CITIC Guoan Lithium Industry: One of the main increments in Qinghai in the future, from calcination to membrane method, welcoming transformation

Xitaijiner Salt Lake is located in the middle of Qaidam Basin, adjacent to Dongtaijiner Salt Lake, with a total area of ​​about 570 square kilometers and an altitude of about 2681 meters. Qinghai Guoan (Parent Company of CITIC Guoan Lithium) owns the mining rights of the main body of Xitai Jiner Salt Lake, with an area of ​​about 493 square kilometers. The terrain in the mining area is open and flat, and the surrounding road traffic and natural gas are complete. It also has a set of halogen mining and transportation systems. According to the resource assessment in 2017, Xitai Salt Lake has resource reserves (solid retained + liquid porosity): sodium chloride 4.9 billion tons, magnesium chloride 153 million tons, potassium chloride 41.99 million tons, and lithium chloride 2.63 million tons (2.29 million tons LCE), of which the lithium ion concentration is about 210mg/L, and the magnesium-lithium ratio is about 62:1. After the reserve reduction in 2020, the porosity resources of lithium chloride in liquid ore retained are 2.35 million tons (2.05 million tons LCE). CITIC Guoan was used to extract lithium resources from high-magnesium lithium-based salt lakes as early as 2007 through its independently developed calcination technology. It is also one of the earliest manufacturers in Qinghai to realize the commercial development of lithium resources. Calcination method is a path that is both controversial and pros and cons. It consumed a lot of Capex in the early commercialization attempts and technical transformation process. However, through continuous optimization in recent years, environmental protection emissions have met standards and product quality has been significantly improved. CITIC Guoan Lithium has become the only manufacturer in Qinghai Salt Lake that can produce "national standard" battery-grade lithium carbonate.

Qinghai Xitai Jiner Salt Lake - Hengxinrong Lithium Industry: Outbound purchase of old brine, the pioneer of Qinghai's membrane introduction method

Qinghai Hengxinrong Lithium Technology was established in 2014. It has introduced a membrane technology widely used in the field of water treatment for the first time in Qinghai. It extracts lithium carbonate at low pollution and high recovery rate. It can comprehensively utilize 1 million cubic meters of brine every year. In 2015, the annual production of 20,000 tons of membrane lithium carbonate project began to be built in Xitai Park. It covers an area of ​​380 mu and has a total investment of 664.7668 million yuan. The material production test run was successfully carried out at the end of October 2017, and the acceptance was approved in 2018, which successfully opened up a new technological path in Qinghai. Hengxinrong Lithium mainly relies on purchasing CITIC Guoan's deboring brine, and uses nanofiltration reverse osmosis membrane method to extract lithium, that is, use a special lithium magnesium separation membrane to obtain low-magnesium brine greater than 550ppm. Then, it gradually forms a finished lithium carbonate product through concentration, precipitation and drying, and by-product magnesium hydroxide . At present, the company is promoting the second phase to the combination process of "adsorption + film method", and is expected to carry out deep raw halogen extraction. In 2019, the company used the lithium deposited mother liquor from the production line to further supplement the annual lithium phosphate production capacity of 6,000 tons. The total output in 2020 was close to 4,000 tons. In 2019, it signed a long-term strategic cooperation agreement with South Korea ECOPRO and China Energy Wanda International Trading Company. In December 2021, Fulin Precision has completed the acquisition of 9% of Hengxinrong's equity for RMB 330 million, and is expected to increase the equity to 31.7496% through capital increase and other methods. The core bottleneck restricting Hengxinrong Lithium's production lies in upstream resources. Focusing on resource reserves, the company obtained the prospecting rights of the deep brine potassium ore in the northeast of Xitai Jiner Salt Lake with an area of ​​394.26 square kilometers in 2019, and actively prepared mining rights application. However, the extraction of deep brine requires deep drilling and pressurization, and the sustainability of brine extraction is also necessary to ensure the large capital investment required for mining, and future economic mining needs to be observed and verified.

Qinghai Yiliping Salt Lake - Wugang Salt Lake: Annual production of 10,000 tons of lithium carbonate is efficiently produced, and the launch of the original halogen adsorption will increase the production capacity

Yiping Salt Lake is located on the west side of the Xitai Salt Lake in Qinghai, forming a large salt flat with the same origin as Dongtai Salt Lake and Xitai Salt Lake, and is also the last complete development of Haixi . Yiliping Salt Lake is currently controlled by 51% of Wumin Group. It adopts "membrane gradient coupling" lithium extraction technology (the main nanofiltration membrane and reverse osmosis process are similar to Hengxinrong, but have electrodialysis boron removal). In 2019, 10,000 tons of lithium carbonate production capacity has been put into production.Overall, the lithium ion concentration and reserves of Yiliping Salt Lake are lower than those of Dongtai and Xitai Salt Lakes. At the same time, the magnesium lithium in the brine is relatively high (97:1), but we believe that it is still a scarce and high-quality asset. Mainly because of its detailed resource data, the team has actively demonstrated and adopted advanced technologies and system devices such as membrane method, old halogen adsorption, and original halogen adsorption, and has rich technical experience. But objectively, the actual production capacity of Yiliping will be affected by the front-end halogen extraction condition and the original halogen accumulation.

Yiliping Salt Lake is located in the western region of the Qaidam Basin in Haixi Prefecture, Qinghai Province. It is an magnesium sulfate subtype salt lake. The brine is rich in potassium, lithium, boron, magnesium and other elements. It has a high rubidium content and an average lithium ion concentration of about 150mg/L. The total porosity of Yiliping Salt Lake has a resource of approximately 984.8 million cubic meters of brine, containing 1.897 million tons of lithium chloride, 18.6587 million tons of potassium chloride, and the total water supply resource reserves of 469.2 million cubic meters of brine, containing 920,74 million tons of lithium chloride, and 9.0036 million tons of potassium chloride. As of April 2020, the resources consumed by the salt lake in the past years were 23,790 tons of lithium chloride and 849,000 tons of potassium chloride. The inventory resources and online volume of salt fields were 69,820 tons of lithium chloride and 713,600 tons of potassium chloride. ➢ Wugang Salt Lake is the only resource provider on Yiliping Salt Lake, with 300,000 tons of potassium chloride and 14,000 tons of carbonate

gradient membrane separation and coupling: The membrane method used by Yiliping Salt Lake is to combine the "gradient coupled membrane separation technology" of the Institute of Salt Lake, Chinese Academy of Sciences and the "multi-stage lithium-ion concentration high magnesium lithium ratio brine lithium extraction technology" of Freiberg University of Technology in Germany. The old brine is obtained by segmented crystallization. After extracting potassium, the magnesium chloride brine is evaporated by multi-stage and crystallization of and demagnesium, and then further concentrated, separated, precipitated, evaporated, and other steps to obtain the finished lithium carbonate product.

Original halogen adsorption: In May 2021, the "Salt Lake Original Halogen High Efficiency Lithium Extraction Technology Research Project" of Wugang Salt Lake passed the evaluation of scientific and technological achievements. The core highlight is that it has changed the classic process of "firstly precipitating sodium and potassium to obtain old halogen through the salt field, and then enter the workshop to separate magnesium lithium and concentrate lithium extraction" to "lithium extraction pre-position", achieving simultaneous separation of sodium, magnesium, potassium and lithium and concentrating deboron removal of lithium, thereby greatly reducing the loss of lithium in the salt field system and significantly increasing the primary yield of lithium. The ideal situation can be increased from about 35% to 70%, and the halogen-lithium extraction production cycle can be shortened from 2 years to about 20 days. In addition, the application of continuous decoupling equipment has improved the device efficiency and automation level.

Qinghai Dachaidan Salt Lake - Dahua Chemical: 000 invested, upgraded extraction production line, newly built adsorption capacity and actively expanded capacity

Qinghai Dachaidan Salt Lake is located in the northern area of ​​the Qaidam Basin. It is a typical Qinghai-Tibet Plateau sulfate-type salt lake with an ore deposit area of ​​about 240 square kilometers. Dachaidan Dahua Chemical holds the mining rights of 8975,059 square kilometers of Dachaidan Salt Lake. As of the end of 2020, the amount of liquid ore control and inferred resources was 3.2421 million tons of potassium chloride, 514,100 tons of boron oxide, 293,920 tons of lithium chloride, 49.8997 million tons of sodium chloride, 8.89757 million tons of magnesium sulfate, 18.41149 million tons of magnesium chloride, and 11,77 million tons of bromine. The amount of solid ore control and inferred resources was 125.9405 million tons of sodium sulfate and 561.4955 million tons of sodium chloride. Before Yiwei acquired the shares, Xinghua Lithium Salt (51% of the shares) under Dahua Chemical was a major enterprise that relied on Dachaidan Salt Lake to extract lithium. It was established in 2016 by Dahua Chemical and Qaidam Construction Investment Co., Ltd., with a completed production capacity of 10,000 tons of lithium chloride, 2,000 tons of lithium hydroxide, 3,000 tons of lithium carbonate and 25,000 tons of boric acid. Overall, in the upstream, Dahua Chemical has potassium fertilizer, magnesium fertilizer and lithium chloride production capacity through multiple platforms. In the downstream, Dahua Holdings Jinkunlun Lithium has built a metal lithium production capacity of 1,000 tons in , Golmud City (annual capacity of 3,000 tons in the future) and built a salt lake resource circulation industrial chain around Dachaidan Salt Lake.

In July 2021, YI Lithium Energy acquired 5% of Dahua Chemical's equity. At the same time, its controlling shareholder, Tibet Yiwei Holdings, acquired 29% of Dahua Chemical's equity, becoming Dahua's second largest shareholder. In this transaction, the core asset Dachaidan Lake (Zone A) boron potassium mine mining rights appraised value is approximately 2.846 billion yuan.In addition, Yiwei Lithium Energy acquired a total of 49% of Xinghua Lithium Salt through auction and acquisition, and acquired 28.125% of Jinkunlun Lithium, a subsidiary of Dahua Chemical. It also established a new joint venture with Jinkunlun in Qinghai, Jinhai Lithium, with Yiwei Holdings 80% and Jinkunlun 20% of Jinkunlun. After introducing Yiwei as a strategic shareholder, the capacity construction around Dachaidan Salt Lake has been significantly accelerated. After solving the financial problem, the future lithium salt output of Dachaidan mainly depends on resource endowment. (Report source: Future Think Tank)

Qinghai Balunmahai Salt Lake - Jintai Potassium Fertilizer: Resources of low potassium and high sodium, old line extraction and new line adsorption

Barlunmahai Salt Lake is located in Lenghu Town, Qinghai Province, located on the northern edge of the Qaidam Basin, and is a high potassium and low sodium salt lake. Founded in 2004, Jintai Potassium Fertilizer is the main producer of the Barunmahai Mining Area. It has been mined for many years and has a mining area of ​​about 197.96 square kilometers for the Mahai brine potassium Mine and a prospecting area of ​​174 square kilometers. Jintai Potassium Fertilizer has carried out lithium extraction through its subsidiary Jintai Lithium Industry (established in 2016), and plans to produce a production capacity of 10,000 tons of lithium carbonate. It received an environmental impact assessment approval in mid-2017. The old line of Jintai Lithium Industry is an extraction process, and the new line turns to adsorption: (1) The first phase produces 3,000 tons of lithium carbonate annually. It adopts the extraction method. It is built by Jintai Potassium Fertilizer. It started construction in June 2016 and started production in July 2017. The sodium salt, potassium salt, light halide and part of magnesium are removed through evaporation in the salt field, and concentrated to form old halide. Then centrifugal extraction is carried out to further remove impurities such as sulfate. (2) The second phase of the yearly output of 7,000 tons was signed with Lanxiao Technology, and replaced the adsorption + film concentration combination process, and supplemented with boron removal and mother liquor recovery to improve quality and efficiency, providing Jintai with complete production line construction and operation services. The second phase of 7000 tons is further subdivided into two production lines: 3000 tons and 4000 tons, of which 3000 tons have been completed and put into production, and the 4000 tons construction and operation agreement has been launched in September 2021. In 2020, the company optimized the production line for multiple links such as application processes and system integration. During the subsequent construction process, many new technical units including boron removal and mother liquor recovery were added, and adsorbent materials were improved.

Tibet Zabuye - Tibet Mining : The rare carbonate salt lake in the world, actively expanding production capacity and carrying out titanium adsorption pilot

Zabuye Salt Lake is located at the northwest end of Zhongba County, Shigatse in the hinterland of the Qinghai-Tibet Plateau, with an altitude of 4,422 meters. It consists of a surface brine lake in the north and a semi-dry salt lake in the south. The total area of ​​the lake area is 247 square kilometers. As a rare carbonate salt lake in the world, it not only has a high concentration of lithium ion and an extremely low magnesium-lithium ratio, but also contains boron, potassium, rubidium and other resources. Tibet Mining holds exclusive mining rights for Zabuye Salt Lake, and as of 2021, it will control 50.72% of the shares. Salt Lake's shareholders also include Tianqi Lithium , BYD , etc. At present, China Baowu Steel Group has become the actual controller of Tibet Mining, with a shareholding ratio of 22.27%. The first phase of Zabuye has completed a 7,000-ton " lithium concentrate " production capacity and upgraded the technology to 10,000 tons. The "new phase of the second phase" project under construction adopts a membrane process and will add 12,000 tons of lithium carbonate production capacity. By 2025, the Tibetan mining industry is expected to form a total lithium salt production capacity of 30,000 to 50,000 tons.

According to the announcement at the end of November 2021, Zabuye's lithium carbonate reserves are 1.788 million tons, and the credible reserves are 572,000 tons. The lithium ion concentration is between 420 and 1610mg/L (some documents use an average diameter of 800mg/L). The lithium ion concentrations of the northern surface brine and the southern intergranular brine are both high, and the magnesium-lithium ratio is as low as 0.015. In addition, the symbiotic ore in Zabuye also includes potassium chloride and boron oxide, with the reserves of potassium chloride of 15.926 million tons and the credible reserves of 5.638 million tons; while the cumulative identified resource reserves of boron oxide are 9.629 million tons.

Phase I solar pool method: Zabuye, a carbonate-type salt lake with high lithium ion concentration and extremely low magnesium-lithium ratio, can produce crude lithium carbonate through a simpler process, but the brine component also makes its lithium content not easy to be further enriched, and it is easy to disperse and precipitate during each stage of evaporation.Based on the characteristics of brine, after a long period of exploration since the early 1980s, Zabuye Phase I adopted the solar pool crystallization process. It is generally fed with the lithium salt in winter, then after three quarters of steaming and drying, then in the winter of the following year, there is no difference between off-peak and peak seasons. The solar pool method cleverly uses "the solubility of lithium carbonate in water to decrease with the increase of temperature" to extract lithium, and produce about 65% of lithium carbonate crystals at the product level in the mining area (the company calls it "lithium concentrate" and its actual grade fluctuates between 50 and 70%). Then the "lithium concentrate" is transported to the Gansu Baiyin Zabuye Lithium Salt Factory at the back end. After slurry adjustment and other processes, concentrate slurry is formed, and finally, lithium carbonate and lithium hydroxide products are purified by caustic-carbonization method. The first phase of Zabuye completed industrial acceptance in 2006, but it has been facing problems such as climate and salt field leakage. However, after Baowu Group took over, the overall management and operation have been significantly improved. The first phase of production capacity has been optimized from 5,000 tons to 7,000 tons/year (the actual output in 2021 is 9,016 tons). In the future, technical transformation will be carried out through dynamic halide mixing and film laying, and will be further increased to 10,000 tons/year (equivalent to 5,000~7,000 tons LCE) by 2023. In addition, the company disclosed in May 2022 that it plans to list and transfer the equity of Baiyin Zabuye Lithium Salt Factory, and will directly sell "lithium concentrate" in the future.

Tibet Mamicuo Salt Lake - Tibetan Qing Fund: The pearl among lithium-rich salt lakes on the plateau

Mamicuo Salt Lake is located in the southwest of Gaize County, Ali District, Tibet, and is located in the northern Tibet Plateau area. The lake area is 110.4 square kilometers and the lake surface is 4343 meters above sea level. It is a magnesium sulfate subtype salt lake, which contains large-scale lithium and boron resources. The salt lake mining rights (electronic mining rights warrant) are held by Tibet Ali Mamicuo Mining, with a mining rights area covering 115.36 square kilometers. Mamicuo Mining is penetrated and held by Tibet Qinghai Fund Holdings and Zangge Mining. At present, the development of the salt lake is mainly promoted by Zangge Mining. It plans to adopt the adsorption + membrane coupling process to design an annual output of 50,000 tons of lithium carbonate. The goal is to start construction in the second half of 2022 and plan to complete trial production in the second half of 2023. We expect that the start time of its construction will largely depend on the progress of project establishment and paper mining rights certificate acquisition.

Mamicuo Salt Lake was first conducted by the Fifth Geological Brigade of the Tibet Geological and Minerals Bureau in 1993, and completed the detailed investigation report in 2011. The amount of lithium chloride resource (liquid brine ore + latent brine ore) was found to be 2.5 million tons, equivalent to lithium carbonate equivalent of 2.18 million tons, and the magnesium-lithium ratio was only 3.97:1. The proportion of liquid brine ore in the salt lake is 98%, corresponding to the concentration of lithium chloride of 5644mg/L, which is equivalent to the concentration of lithium ion of 920mg/L. In addition, it is also rich in boron oxide, potassium chloride, rubidium cesium and other resources.

Tibet Laguocuo Salt Lake - Zijin Mining: Another high-quality salt lake resource in Mami Township, it is planned to adjust the drying solution to adsorption

Laguocuo Salt Lake is located in Mami Township, about 60 kilometers south of Gaize County, Ali District, Tibet. It is located in the western part of the northern Tibetan Plateau, with an altitude of about 4467-4800 meters. The lake area is 95.6712 square kilometers. It is rich in lithium, potassium, magnesium, sodium and other resources. It currently has an electronic mining license. Previously, the development of salt lake was mainly promoted by Jinshi Mining, a subsidiary of Dun'an Environment. In May 2022, Zijin Mining acquired Jinshi Mining for 4.897 billion yuan, obtained 70% of the project's equity and led the development. It will actively promote the acquisition of paper mining warrants. The first phase is planned to produce 20,000 tons of lithium carbonate, and the second phase is planned to expand to 50,000 tons of annual output.

Laguocuo Salt Lake has low impurities and according to the 2012 Tibet Land and Resources Reserve Registration Data, the amount of resources retained by the salt lake is 2.14 million tons of lithium carbonate (because the lake contains lithium, its resources can be regarded as reserves), the average lithium ion concentration is 270mg/L; the magnesium-lithium ratio is 3.32:1, 3.82 million tons of boron oxide, the average content is 2.57g/L, 7.44 million tons of potassium chloride, the average content is 5.13g/L, as well as sodium chloride, magnesium chloride, rubidium oxide, and cesium oxide, among which lithium carbonate, boron oxide, rubidium oxide, and cesium oxide all reach large scale.

In terms of infrastructure support: (1) The 110 kV state grid line has reached Gaize County, and the 35 kV power grid from Gaize County to Mami Township has been connected. Industrial electricity can be directed from Gaize County to the mining area. The straight line distance is about 33 kilometers. However, the total power of the power in Ali area is small, which cannot meet the development and electricity demand of the mining area. Given the good terrain conditions and sufficient light, photovoltaic power generation and energy storage systems can be built; (2) There are two annual rivers, Meizangbu and Xiongbuka River on the south side of the lake area. The terrain on the north side is gentle and wide, providing abundant freshwater and vacant land for capacity construction and production, suitable for lithium ion elution of adsorbents, which helps to optimize costs; (3) The salt lake is about 38 kilometers west of Mami Township, and 920 kilometers east from Gaize County to the Qinghai-Tibet Gong The road is connected to the Qinghai-Tibet Railway, and from the junction is 390 kilometers south to reach Lhasa and 790 kilometers north to reach Golmud City, Qinghai. The transportation is convenient, but the journey is long.

Original Development Plan: The production scale of Laguocuo is an annual production of 10,000 tons of lithium carbonate. The original development and utilization plan designed in 2016 is to use a water pump to extract brine at the Laguocuo Salt Lake site, build salt fields on the east bank of the salt lake, and the brine is transported to Yantian Beach through pipelines and obtain lithium-rich old brine. It is transported to Golmud, Qinghai by automobile, and produce lithium carbonate and potassium fertilizer products in Golmud Tibet Industrial Park. The lithium carbonate production scale is 10,000 tons/year.

Tibet Jiezechaka Salt Lake - Guoneng Mining (Tibet Urban Investment): Cooperate with Lan Xiao and promote the production capacity of 10,000 tons of lithium hydroxide adsorbed

Jiezechaka Salt Lake is located in Ali area, Tibet. The mining rights belong to Tibet Guoneng Mining. Tibet Urban Investment holds 41% of its shares, which contains rich lithium, potassium and boron resources. The Jiezechaka Salt Lake is about 100 kilometers away from Longmucuo Salt Lake, which is also a subsidiary of National Energy Mining. The total lithium chloride resources of the two salt lakes are 4.48 million tons, equivalent to LCE is 3.9 million tons, and the lithium ion concentration is about 129-191mg/L. Guoneng Mining has signed a entrusted processing contract with Lanxiao Technology for the development of Jiezechaka Salt Lake. Lanxiao Technology is responsible for the construction and operation of the entire line, and has formed a partner with Yiwei Lithium. The first phase of 10,000 tons is planned to be completed by the end of 2023. Then, the second and third phases of production capacity will be promoted depending on the situation, with 20,000 tons of lithium hydroxide each.

Jiezechaka Salt Lake is located in Dongru Township, Ritu County, Ali Prefecture, Tibet. It has an altitude of 4,600 meters. It is a high-quality carbonated salt lake with a surface brine area of ​​99.6 square kilometers. According to the reserve verification report, the amount of 332 controlled resources of Jiezechaka: lithium chloride is about 2.31 million tons, with an average lithium ion concentration of 191mg/L, a large scale and excellent endowment; boron oxide is 1.61 million tons, an average boron concentration of 821mg/L; potassium chloride is 9.8 million tons, and an average potassium concentration of 4984mg/L.

Longmucuo Salt Lake is located in the northeast of Ritu County, Ali Prefecture, Tibet, with an altitude of 5,100 meters. It is a chloride-type salt lake with a surface brine area of ​​100.91 square kilometers and a surface brine volume of about 2.734 billion cubic meters. According to the announcement, the mineral components of the surface brine of Longmucuo Salt Lake are mainly boron, and symbiotic minerals include lithium, sodium and potassium. Among the 332 control resources: lithium chloride is about 2.17 million tons, corresponding to the average lithium ion concentration of 129mg/L; boron oxide is 1.7 million tons, corresponding to the boron concentration of 620mg/L; potassium chloride is 18.59 million tons, corresponding to the potassium concentration of 6802mg/L.

Tibet Baqiancuo Salt Lake - Jinyuan Co., Ltd.: Be the first to introduce the electrochemical deembedding method, which will provide the industry with reference samples

Jinyuan Co., Ltd. was the predecessor of Jilin Province Light Industry Import and Export Company. It was listed in 1994 and officially confirmed in 2022 that the strategy will focus on lithium resources as the core, and the treatment of solid hazardous waste resources and the comprehensive recycling of rare and precious metals. It is also planned to gradually withdraw from the original building materials and cement main business at an appropriate time. Tibet Baqiancuo Salt Lake is the company's main project at present. The introduced electrochemical deembedding method cleverly applies the working principle similar to lithium batteries to extract lithium, providing new ideas for lithium extraction for salt lakes with low mineralization in Tibetan areas. The industrialization attempt of this process is of great significance, and the actual progress remains to be verified and observed. At present, the project has completed a field expansion test device with a capacity of 2,000 tons of lithium carbonate equivalent and is under debugging. It is planned to further complete the completion and production of the 8,000 tons of equipment by the end of 2022.

Since September 2021, the company has disclosed that it plans to acquire 51% of Tibet Ali Chenyu Mining through its subsidiary Jinyuan New Energy (still in negotiation), 51% of Alibaba Lithium Source Mining (completed) and 51% of Tibet and Lithium Lithium (lithium processing capacity, still in negotiation). If all the above transactions are completed, it will obtain mining rights of Jibu Chaka Salt Lake and Baqiancuo Salt Lake. In addition, in June 2022, the company disclosed that it plans to acquire the remaining 49% stake in Alibaba Lithium Mining, thus obtaining 100% of Lithium Mining. In addition to Baqiancuo Salt Lake, Ali Lithium Mining also holds the mining rights of Chabocuo Salt Lake in Gaizen County, but this mining area is in the experimental area of ​​Qiangtang Nature Reserve in Tibet and is applying for the transfer of the protected area.

8Qiancuo Salt Lake is located in Wenbudangsang Township, Geji County, Tibet. The lake surface is 4956 meters above sea level, the salt lake brine area is 15.24 square kilometers, and the registered mining rights area is 24.5484 square kilometers (mining mineral species boron, lithium, and potassium). The mining rights have been transferred to Geji Lithium Industry. According to the 2021 "Resource Reserve Verification Report", the reserves of boron lithium potassium ore retained in the Baqiancuo Salt Lake Mine Area of ​​Geji County, Tibet Autonomous Region (statistics on the resource reserves of surface brine during the water-abundant period, the porosity of shallow-stacked brine and solid boron ore retained in the resource reserves) boron (B2O3) is 151,000 tons, lithium (LiCl) is 186,000 tons, and potassium (KCl) is 415,000 tons.

Tibet Dangxiongcuo Salt Lake - Tibet Xusheng Mining: Another scarce carbonate type, lithium ion concentration is 330mg/L

Dangxiongcuo Salt Lake, also known as Dangqiongcuo, is located in Nima County, Nagqu Prefecture, Tibet. It is located in the southwest of the Qinghai-Tibet Plateau. The lake surface is 4475 meters above sea level, the lake area is about 318 square kilometers, and the surface brine area is 55.53 square kilometers. It is a moderate carbonate salt lake. The brine in the lake area is rich in sodium, potassium, lithium, boron, bromine and other minerals. According to the "Surface Brine Lithium Mine Resource Reserve Verification Report" of Dangxiongcuo Salt Lake in 2010, the main mineral is about 858,800 tons of lithium chloride (equivalent to LCE 748,000 tons), reaching the scale of a large lithium mine industry. According to literature records, the lithium ion concentration reaches 330mg/L and the potassium ion concentration is about 8,000mg/L. In addition, the symbiotic ore species boron, bromine, rubidium, and sodium sulfate have reached a large scale, while potassium chloride, alkali, etc. are medium-sized. Established in 2003, Tibet Xusheng Mining holds a mining rights certificate (electronic mining rights certificate) of Dangxiongcuo Salt Lake. The controlling shareholder is Tibet Zhengwo New Energy (whomally owned subsidiary of Tibet Ronghe Investment), with a 65.38% stake and a mining rights area of ​​approximately 88.99 square kilometers. According to the environmental impact assessment disclosure of the Dangxiongcuo Lithium Potassium Boron Comprehensive Development Project (Phase I Project)", in 2017, Xusheng Mining invested 486 million yuan to carry out mining, corresponding to an annual output of 26,750 tons of lithium carbonate, and supporting production of 100,000 tons of borax, 240,000 tons of potassium chloride and 170,000 tons of soda ash. The project is currently introducing strategic investors, and development is expected to be gradually started.

Zacang Chaka Salt Lake, Tibet - Pengcheng Mining, Tibet: Three lake areas, the resource scale cannot be underestimated, the lithium ion concentration reaches 635mg/L

Zacang Chaka Salt Lake is located in Geji County, Ali District, Tibet, and is located in the northern Tibetan Plateau, with an altitude of about 4300-4400 meters. The overall salt lake is spread in an almost east-west direction, about 33km long from east to west and about 10-15km wide from north to south, and consists of three lake areas. Zacang Chaka Salt Lake was first discovered around 1960. The lake is rich in boron, lithium, potassium, rubidium, cesium and other elements. It is a magnesium sulfate subtype salt lake. It was first developed mainly with boron ore, and began in the 1980s. The mining rights of Zacang Chaka Salt Lake (boron ore and its associated ore) are held by Tibet Pengcheng Mining. The surface resources of lithium chloride are between 68,000 tonnes (compared with LCE of 59,000 tonnes), corresponding to the concentration of lithium chloride is about 2944-3393mg/L (compared with lithium ion concentration of 480-553mg/L); while the lithium chloride resource of underground brine exceeds 3.3 million tonnes (compared with LCE of 2.87 million tonnes), reaching the scale of a super-large lithium deposit, corresponding to the concentration of lithium chloride is about 3898mg/L (compared with lithium ion concentration of 635mg/L).

Other salt lakes in Tibet: The development process is arduous, but the long-term potential is huge and the prospect is bright. According to the geological exploration plan of the Tibet Autonomous Region, the salt sedimentary deposits of salt lakes in northern Tibet are widely distributed and numerous in number. After considering the avoidance of the northern Tibetan nature reserve, the focus of the work mainly focuses on two areas: (1) Pangongcuo-Nujiang fault zone and its secondary level fault: The zone has huge geothermal anomalies, many lake basins, and good mineralization conditions. At present, the salt lakes that have been evaluated are Zhacang Chaka, Mamicuo, and Laguocuo, which have a high prospect for mineral exploration. (2) Area north of Gangdise-Nianqing Tanggula Plate: The representative salt lakes currently evaluated in this belt include Zabuye Chaka, Dangxiongcuo, etc., with good mineralization background and a high level of work.

Looking to the future, we believe that based on the experience accumulation, technological innovation and technological spillover of Qinghai Salt Lake lithium extraction, coupled with the gradual improvement of roads and power infrastructure (the shortage of industrial electricity is difficult to completely solve in the short term, but photovoltaics and solar thermal construction can be built), the resource potential of Tibet's salt lake is expected to be continuously explored. In particular, breakthroughs in lithium extraction technology in salt lakes, such as membrane method, raw halogen adsorption, are expected to bring more feasibility to green development without large-scale construction of salt fields and chemical reagents. Although the process of carrying out lithium extraction in salt lakes in Tibet is undoubtedly arduous and challenging, the prospects are bright and have far-reaching strategic significance for China's lithium resource supply.

Xinjiang Salt Lake: Lop Nur plan to start the annual production of 5,000 tons of lithium carbonate. The lithium adsorption and extraction of lithium

Lithium resources are one of the advantageous minerals in Xinjiang. Both ore lithium and salt lake lithium have, but their ore lithium resources have greater potential. The salt lake resources in Xinjiang are mainly Lop Nur dry salt lake located in Ruoqiang County, Bayingoleng Mongolian Autonomous Prefecture (east of the Tarim Basin), as well as Kushui Lake, Hongshan Lake, Huangcaohu boron lithium mine located in the West Kunlun-Karakoram Metallogenic Belt. Among them, Lop Nur dry salt lake is a world-class super-large potassium salt deposit, and it symbiotics of sodium, magnesium, and associated lithium, boron and other elements, with an area of ​​10,350 square kilometers and an altitude of 780 meters. In 2006, Guotou Xinjiang Lop Nur Potassium Salt Company began to build potassium sulfate production capacity. Guotou Luotou has become the world's largest monomeric potassium sulfate producer, with 1.5 million tons/year potassium sulfate production capacity, and together with the Qinghai Charhan Salt Lake, it has formed the pattern of China's two major potassium fertilizer production bases. In late June 2022, Guotou Luo Potassium Plan started the construction of comprehensive utilization of lithium resources, and planned to use the old halogen after potassium extraction, based on the "aluminum adsorbent + film method" process to extract lithium, and plan to produce 5,000 tons of lithium carbonate annually. The construction content includes old halogen transportation, salt field drying, adsorption, membrane treatment and evaporation, lithium precipitation, drying and ancillary facilities. If the approval and construction progress are promoted as scheduled, it is planned to be completed by the end of 2023.

In the green space project for lithium extraction in South America salt lakes, adsorption has become the mainstream solution as important as the precipitation method

According to our observation, in the development of the green space salt lake project in South America "lithium triangle" area, especially in the development of emerging salt lakes in Argentina (there are currently 27 projects in the country in the exploration, construction and production stages, of which 2 are in production), the adsorption method has now become an important process route as the precipitation method. The main reason is that the resource endowment, brine components and geographical conditions of some salt lakes are not completely suitable for building large-area salt fields, or after comparing and evaluating the process, resource providers will determine that the production efficiency and economicality of using adsorption will be better. We believe that if China's experience and technical accumulation of salt lake development are replicated in South America, the construction, commissioning and full production process of projects will be greatly accelerated. The process developed by overseas resource providers or overseas start-up lithium extraction technology companies still need to be tested in practice, and the full production process will be difficult to achieve overnight. In addition, although some Argentine salt lakes adopt traditional salt field precipitation technology in the initial production capacity, it is not ruled out that innovative technologies such as adsorption will be adopted in the expansion of the second phase of energy, so as to greatly improve production efficiency after supporting facilities are mature and the time is ripe in the future.

Argentina Rincon Salt Lake - Rio Tinto: Designed to use original halogen adsorption technology to produce 50,000 tons of lithium carbonate per year

Rincon Mining's mining rights cover most of the area of ​​Rincon Salt Lake in Argentina. Since 1998, the development of lithium extraction technology around Rincon Salt Lake has lasted for more than 20 years. It is a historic large-scale salt lake brine project in Argentina. At the end of 2021, global mining giant Rio Tinto disclosed that it acquired Rincon Mining, a subsidiary of private equity investment group Sentient Equity Partners, for US$825 million, to enter the development of Argentina's salt lake lithium resources. According to Rincon Mining's plan, the coupling process of raw halogen adsorption + membrane separation is designed to produce 50,000 tons of lithium carbonate annually, and a test factory has been built in the mining area. We believe that considering the brine components of Rincon Salt Lake, given its mediocre lithium ion concentration and high magnesium-lithium ratio, it is not suitable for the salt field precipitation process, and it is more suitable for the use of adsorption method to extract lithium.

Rincon Salt Lake is located in Salta Province, Argentina, with an altitude of 3765 meters. Rincon Mining controls a total of 830 square kilometers of mining rights, covering 94% of the salt flat area, and a small number of non-core mining rights around it belong to companies such as Argosy. According to the resource and reserve report updated in July 2021, Rincon Mining Mining has: (1) Total reserves of 1.9846 million tons of LCE, with an average lithium ion concentration of 359mg/L. (2) Proven + control resource amount is 5.8024 million tons LCE, with an average lithium ion concentration of 367mg/L, and an additional inferred resource amount of 5.9655 million tons LCE, with an average lithium ion concentration of 390mg/L. (3) According to some segment samples, the magnesium-lithium ratio is 9.4~10.8. We believe that Rincon's lithium ion concentration is located in the second and third lines in the "lithium triangular" of South America, and the magnesium-lithium ratio is higher than that of South America's main salt lakes, but it is still relatively ideal worldwide. In addition, Rincon is also a large salt lake project with few remaining and complete mineral rights in Argentina, so it has a certain degree of scarcity.

Rincon The infrastructure conditions of the salt lake are ideal and the fresh water supply is abundant. (1) Road: The National Expressway connects the project to the capital of Salta. In addition, there is a railway line 30 kilometers away, leading to the Chilean port of Antofagasta and Buenos Aires, the capital of Argentina, to facilitate material replenishment and product transportation. (2) Freshwater: According to geological surveys, freshwater under the surface of the alluvial fan can support an annual production capacity of more than 100,000 tons, and the company has obtained nearly exclusive freshwater use rights. (3) Energy: The project is only 1 kilometer away from the high-voltage power grid across the Andes, and the company also signed an intention to coordinate with a large photovoltaic power station around the Salt Lake. (4) Salta's mining policies are generally friendly, and the project is not far from the salt lakes under production and under construction in the northern Hujuyi Province, and is expected to form a cluster effect in the future.

Argentina Centenario-Ratenes Salt Lake - Eramet: Introducing Qingshan Industrial joint venture, the first phase of the original halogen lithium extraction started the construction of

France Eramet Through its subsidiary Eramine Sudamérica, wholly owned by the Centenario Ratones Salt Lake in Salta Province, Argentina, is composed of the northern Centenario Salt Lake and the southern Ratones Salt Lake. The mineral rights cover the entire salt flats and are permanent mineral rights, with a total area of ​​about 500 square kilometers and an altitude of 3,800 meters. Currently, the proven reserves are 1.1 million tons of lithium carbonate equivalent, the resource is nearly 10 million tons of lithium carbonate equivalent, and the average lithium ion concentration is nearly 400mg/L. Overall, we believe that the resource scale of Centenario-Ratenes is relatively ideal, but in terms of lithium ion concentration, it is only a second-tier level. Together with the Rincon Salt Lake, it belongs to Argentina's small number of large-scale salt lake lithium resource projects with complete mineral rights. It can be fully installed and developed in the future, and there is no problem of coordination and integration of mineral rights. Therefore, it has high scarcity, but infrastructure conditions will pose a challenge.

After Qingshan acquired a stake in Centenario-Ratones Salt Lake has restarted the first phase of the 24,000 tons of battery-grade lithium carbonate production capacity construction on 22Q1, and is planned to be tested in the first half of 2024 and reach production in the second half of 2025. The first phase of production capacity will adopt the "adsorption + membrane separation" technology developed by Eramet to directly extract lithium from the original halogen, with a budget investment of about 500 million euros. In the future, the resource reserves of the salt lake will be sufficient to support Eramet and Qingshan's respective production capacity for multiple phases of construction.According to feasibility study and experimental factory parameters, this technology is expected to achieve a recovery rate of up to 90% (only 40~50% in traditional salt field processes), the lithium extraction cycle only takes 1 week (18 months to dry the braised salt field in South America), and the cash cost of assessing lithium carbonate is only US$3,500/ton. We believe that this process is similar to the design of Livent and some salt lakes in Qinghai, China, but the difference is that its adsorption is not "selective adsorption", but rather the uniform adsorption and concentration of cations, and separation is carried out in the rear-end membrane section. Given the limitation of nanofiltration membrane treatment concentration, the efficiency of separation of small molecules (magnesium lithium, sodium lithium), and the loss of the membrane itself, the efficiency of this process flow in large-scale continuous production, actual capital expenditure strength, and capacity running-in cycle need to be verified.

Kachi Salt Lake, Argentina - Lake Resources: Lilac's ion exchange is used to directly extract lithium, and a planned 50,000 tons of

Lake Resources controls 100% ownership of the Kachi Salt Lake project in Katamarca Province, Argentina through merger LithNRG. In the DFS under production, the first phase is planned to produce 50,000 tons of lithium carbonate annually. In terms of development and utilization, the company introduced Lilac Solutions, a US lithium extraction technology company, as a technology partner, and will use Lilac patented ion exchange technology to directly extract lithium. As a consideration, Lilac will acquire up to 25% of the equity of the Kachi Salt Lake project. In terms of product underwriting, Kachi's planned production capacity has been locked by Hanwa Industrial and Ford Motor Company.

Kachi Salt Lake Project is located in the Catamarca Province of Argentina. It is about 100 kilometers away from the Fenix ​​lithium extraction facility under Livent, and the mine rights area is about 705 square kilometers. According to the initial resource assessment in 2018, the project has a control + inferred grade lithium resource total of 4.4 million tons, LCE, and a total of 30.7 million tons of potassium chloride resource total of 221mg/L, an average lithium ion concentration of 4380mg/L, and a magnesium-lithium ratio of about 4.7:1. Among them, the controlled resource amount is 1.05 million tons of LCE, the average lithium ion concentration is 289mg/L, the inferred resource amount is 3.394 million tons of LCE, and the average lithium ion concentration is 209mg/L. Given that the project has a large mineral rights area, there is a lot of room for investment in exploration and expansion of lithium resources in the future, it is not ruled out that it will reach 8 million to 17 million tons of LCE.

According to DFS, which was launched in January 2022, the Kachi project's design annual production plan has been greatly increased from 25,500 tons to 50,000 tons LCE. Kachi will use the new ion exchange technology patented by Lilac Solutions to efficiently, quickly and environmentally friendly lithium extraction from salt lake brine, with a test recovery rate of up to 80~90%, and can produce battery-grade lithium carbonate products. In September 2021, Lake and Lilac signed an agreement. Lilac will provide lithium extraction technology and engineering teams to be responsible for building experimental factories in the mining area. As a consideration, it can obtain up to 25% of the equity of Kachi Salt Lake held by Lake (the initial 10% will be obtained by completing technical testing, and then 5% and 10% will be obtained by completing project demonstration plant testing and product inspection one after another), and will be responsible for approximately US$50 million in financing in commercial development. Lilac Solutions, as a new American lithium extraction technology company, has attracted investments including the Breakthrough Energy Fund led by Bill Gates, the MIT The Engine support fund, Chris Sacca's Lowercarbon Capital, BMW, Sumitomo and SK Materials. (Report source: Future Think Tank)

Argentina Sal de Los Angeles Project - Mount Everest, Tibet: Ambition to introduce China's leading adsorption + membrane process

Sal de Los Angeles (SDLA) project is located in the Pune Plateau region of Salta Province, Argentina, 700 kilometers from the port of Anto Fagasta, Chile's port, and close to the Hombre Muerto Salt Lake. The SDLA project occupies more than 95% of the Salar de Diablilos Salt Lake and is controlled by PLASA (Lithium Potassium Company), an Argentine subsidiary of Mount Everest, Tibet. It has a total area of ​​116.51 square kilometers, an average altitude of 4,050 meters, and has multiple elements such as lithium, potassium and boron.Previously, the project was mainly developed by Lithium X, Canada. It was acquired by a shareholder of Mount Everest in 2017. It was put into production on the 2,500-ton pilot line in 2019. In 2021, it signed cooperation agreements with Jiuwu Hi-Tech, Zhongnan Lithium Industry, Changsha Nonferrous Metals, Qinghai Salt Lake Institute, etc. on promoting the pilot research on adsorption coupling membrane method and the lithium extraction pilot project of electrochemical deintercalation method. In 2022, it cooperated with Lanxiao Technology, Qidi Qingyuan, China Power Construction International and others to promote the construction of annual production capacity of 50,000 tons of lithium carbonate equivalent production capacity.

In terms of resources, Mount Everest in Tibet has been updated with NI43-101 report. According to the announcement in August 2018, the SDLA project has a total resource of 385,000 tons of lithium metal, equivalent to 2.05 million tons of LCE, and the average lithium ion concentration of the entire deposit is 490mg/L. Among them, the proven + controlled resource amount is 307,500 tons of lithium metal, equivalent to 1.64 million tons of LCE, the average lithium ion concentration is 479mg/L, the potassium resource amount is 4.205 million tons, equivalent to 8.032 million tons of potassium chloride, and the magnesium-lithium ratio is below 3.7. The

Sal de Los Angeles project has undergone several transfers. In 2016, Lithium X acquired 80% of the equity of Potasio y Litio de Argentina SA (PLASA) from Aberdeen and obtained the SDLA project. In December 2017, Lithium X was further acquired by Nextview New Energy Lion HongKong, which is owned by Tibet Everest (Hong Kong), for US$265 million. Among them, Tibet Everest's shareholding in Tibet Everest (Hong Kong) has increased to 54%, achieving the holding of the project. In April 2022, it is planning to increase the shareholding of Mount Everest (Hong Kong) to 87.5%.

Argentina Sal de Oro project - POSCO: Production of battery-grade lithium hydroxide products based on lithium phosphate

Korea POSCO's Sal de Oro project is located in the northeast of the Hombre Muerto Salt Lake at the junction of Catamarca and Salta provinces in Argentina. The project was originally part of the northern region of the Sal de Vida project and was acquired by POSCO in 2018 for US$280 million from Galaxy Resources (Galaxy Resources has been merged with Orocobre into Allkem). In order to promote the development and utilization of lithium resources in salt lakes, POSCO officially established POSCO Argentina in 2018, further carried out exploration in the future, and officially started the project construction on 22Q1, and plans to put 25,000 tons of lithium hydroxide into production in the first half of 2024.

After expanding exploration, the lithium resource reserves of the Sal de Oro project were about 13.5 million tons of LCE, a significant increase from the 2.2 million tons of LCE at the beginning of the acquisition in 2018. The lithium ion concentration was about 920 mg/L, and the content of impurities such as magnesium was lower. In February 2019, POSCO has increased the mine rights area to 228 square kilometers through further acquisition and integration.

POSCO adopts the independent direct lithium extraction technology on the project, and plans to extract lithium phosphate first from the supporting lithium processing plant in the Salt Lake Mining Area, and then transport it to the Güemes General Industrial Park factory to produce lithium hydroxide and lithium carbonate products. At the end of March 2022, the 25,000-ton lithium hydroxide production line in Argentina was officially started and is scheduled to be completed in the first half of 2024. The total capital expenditure is approximately US$830 million (0.95 trillion won), and the huge amount of resources supports LOM for more than 50 years. The operation and financing of the production line will be solely responsible for the subsidiary POSCO Argentina. The POSCO Group also plans to increase its production capacity to 50,000 tons from the end of 2024 and gradually increase its production capacity to 100,000 tons by 2028.

POSCO independently developed the direct lithium extraction technology (Posco Lithium eXtraction) in 2010. It is a new phosphate precipitation-membrane electrolysis technology. It can be evaporated and concentrated in the salt field, removed magnesium calcium with sodium hydroxide, and added sodium phosphate to precipitate and precipitate low-soluble lithium phosphate, and added excess phosphoric acid to form lithium phosphate solution, and then used electrolysis to produce lithium hydroxide. The advantage of this process is that the feed materials in production can be selected in a variety of ways and the required concentration is much lower than that in carbonate precipitation. At the same time, the recovery of phosphoric acid can be achieved, the pool area can be greatly reduced, and the efficiency of lithium extraction can be further improved, but the cost of chemical reagents is relatively high. As early as 2011, POSCO started experimental production in South Korea and achieved operation of 2500 tons in 2017, making it the first opportunity for commercial production on the Sal de Oro project.

Argentina Cauchari-Olaroz Salt Lake - Ganfeng/LAC: Using limestone precipitation method, the first phase is put into production. The lithium-ion lake lithium resource project is located in the southeast of Olaroz Salt Lake in Jujui Province, Argentina, and above the Cauchari Salt Lake. It has an altitude of 3,940 meters and is adjacent to the Olaroz Salt Lake lithium extraction facility under Allkem. CauchariOlaroz is also the only green space salt lake project expected to be put into production in 2022 (the rest are brownfield energy expansion). Canadian American Lithium Industry (LAC) has started the project exploration since 2009. In 2016, LAC and SQM established a 50/50 joint venture to jointly promote the project design and development. In the future, Ganfeng Lithium Industry acquired SQM's equity and increased the equity ratio in the project step by step, and obtained a controlling stake in 2020. LAC retains its equity. The first phase of the Cauchari-Olaroz project adopts the salt field precipitation method. The original design has an annual output of 25,000 tons of battery-grade lithium carbonate. It will be adjusted and expanded to an annual output of 40,000 tons. It is expected to be put into production in the second half of 2022. The second phase is planned to add at least 20,000 tons, and construction is also expected to start in the second half of 2022.

According to the resource and reserve assessment report in May 2019: The Cauchari-Olaroz project has a total lithium resource (M+I+I) of 4.617 million tons of lithium metal, equivalent to lithium carbonate equivalent of 24.576 million tons, of which the proven + controlled resource (M+I) totals 3.7297 million tons of lithium metal, equivalent to lithium carbonate equivalent of 19.853 million tons, and the average lithium ion concentration is 592mg/L; the project has a total lithium resource reserve (P+P) of 682,900 tons of lithium metal, equivalent to lithium carbonate equivalent of 3.635 million tons.

In the development process, Cauchari-Olaroz was originally a wholly-owned project of LAC. In 2016, SQM obtained 50% of the project's equity through capital injection and established a 50/50 joint venture with LAC, and jointly promoted the design and development of the project. Later, SQM reached an agreement with Chile Corfo on the Atacama Salt Lake in Chile, successfully renewed and expanded the lithium extraction quota and no longer needed to diversify risks, so it agreed to sell its equity in the CauchariOlaroz project to Ganfeng Lithium. After the transaction was completed, Ganfeng Lithium acquired 37.5% of the equity in the Cauchari-Olaroz project and increased the equity ratio to LAC. 62.5%; in the future, Ganfeng Lithium successfully locked 51% of the controlling stake in the project by gradually increasing its equity ratio, participating in LAC and providing low-interest debt financing, and LAC retained the remaining 49% of the equity; after JEMSE, a provincial investment platform in Hujuyi, Argentina, chose to exercise 8.5% of the equity, Ganfeng Lithium as the largest shareholder, holding 46.7%, and LAC held 44.8%. The Cauchari-Olaroz project officially started construction in 2017, but due to the cyclical fluctuations in the industry and the impact of the new crown epidemic, the production time has been postponed to the second half of 2022.

Argentina Mariana Project - Ganfeng Lithium: The first phase of 20,000 tons of lithium chloride has started construction, fully demonstrating the green concept

Mariana Project is located in the Salar de Llullaiillaco Salt Lake in the western part of Salta Province, Argentina. The mining rights completely cover the entire salt lake. It is 100% held by the Litio Minera Argentina SA (LMA) platform, and 100% equity of the indirect control project MLC (Mariana Lithium) subsidiary of Ganfeng Lithium. Mariana has completed the feasibility study in 2019 and further updated and expanded its resource size in July 2021. At present, the 20,000 tons of lithium chloride production capacity in the mining area has officially started construction, which will provide Ganfeng Lithium's metal lithium production capacity in China with low-cost upstream raw material guarantee. The project fully considers sustainable development in its design concept, and specifically reserves natural ecological reserves for flamingos, regularly conducts environmental monitoring of the project surroundings, recycles freshwater, and uses 100% green energy in the production activities in the salt lake mine area (builds a 120MW photovoltaic power station and is equipped with lithium battery energy storage). The

Mariana project covers a total area of ​​324.36 square kilometers. According to the July 2021 Update Resource Update Report, the total amount of lithium resources (M+I) is 1.287 million tons of lithium metal, equivalent to approximately 6.854 million tons of lithium carbonate equivalent, and the average lithium ion concentration is 319mg/L.Among them, the proven resource amount reached 833,000 tons of lithium metal, equivalent to about 4.436 million tons of lithium carbonate equivalent, with an average lithium ion concentration of 315mg/L, and a controlled resource amount of 454,000 tons of lithium metal, equivalent to about 2.418 million tons of lithium carbonate equivalent, and an average lithium ion concentration of 326mg/L. In addition, the project also has inferred level resources of about 23.8

Argentina Tres Quebradas Salt Lake: Zijin Mining is 100% held, and plans to be put into production in 2023 for 20,000 tons. The project is located in the southwest of the Catamarca Province of Argentina, located at the southern end of the "lithium triangle" of the Pune Plateau, with an altitude of 4100 meter, only 25 kilometers away from the Chilean border, is the salt lake resource green space project with the highest concentration of lithium ion in the world. Zijin Mining Industry completed a 100% equity acquisition of the Tres Quebradas project in January 2022, with the mining rights area of ​​the project exceeding 350 square kilometers (and the mining rights period is granted for 99 years). The first phase of the project adopts the precipitation method to produce 20,000 tons of battery-grade lithium carbonate annually. It was officially started in March 2022 and is planned to be completed and put into production by the end of 2023. In addition, Zijin Mining will continue to promote the second phase of research, planning to expand its production capacity to 40,000-60,000 tons. At the same time, in order to improve the recovery rate, the company may adopt a new process for the second phase based on its specialty hydrometallurgy process.

Tres Quebradas The project has large resources, high grade, low impurities, and good development conditions. According to the company's FS disclosure in November 2021: (1) Under the boundary grade of 400mg/L lithium ion concentration, the total lithium carbonate equivalent resource amount of about 7.63 million tons, of which the total proven resource amount and controlled resource amount reached 1.009 million metal tons (M+I), with a depreciated LCE of 5.369 million tons, with an average lithium ion concentration of 637mg/L; the inferred grade resource amount is about 425,000 metal tons, with an equivalent LCE of 2.261 million tons, with an average lithium ion concentration of 561mg/L. (2) The project has a total reserve (P+P) of 313,000 metal tons, equivalent to LCE is 1.672 million tons, accounting for 31% of the proven + controlled resources, and the average lithium ion concentration is about 786mg/L. (3) The project has few impurities, the Mg/Li range is about 1.77-4.12, while the SO4/Li ratio is around 0.48-0.53.

Argentina Sal de Vida Salt Lake - Allkem: Phase I produces 15,000 tons of lithium carbonate annually. It will be put into production in the second half of 2023

Sal de Vida Salt Lake project is located in the southeast of Hombre Muerto Salt Lake in Catamarca Province, Argentina, east of Livent's Fenix ​​base and south of POSCO's Sal de Oro under construction. It is controlled by Allkem (Lithium One, which integrates Galaxy Resources and is earlier acquired by Galaxy Resources). The resource volume and brine endowment of this project are relatively excellent. After multiple rounds of resource evaluation, process demonstration, and field test line construction in history, the project finally adopts a phased development strategy. The first phase produces 15,000 tons of battery-grade lithium carbonate annually, and is planned to be put into production in the second half of 2023. 30,000 tons will be added in the next phase of the second phase, and the total annual production capacity after completion will reach 45,000 tons of lithium carbonate.

According to the updated disclosure in February 2022: The total amount of lithium resources (M+I+I) in Argentina has a total of 1.29 million tons of lithium metal, equivalent to approximately 6.851 million tons of lithium carbonate equivalent, and an average lithium ion concentration of 752mg/L. The total reserves of the project (P+P) are 327,000 tons of lithium metal, equivalent to approximately 1.74 million tons of lithium carbonate equivalent. In addition, the salt lake project has low impurities contents of Mg, Ca and B, and can obtain battery-grade lithium carbonate through a relatively simple process. The evaporation pool built by the

project has an area of ​​about 13 square kilometers (1300 hectares). The process flow will be mainly precipitation method, and lithium carbonate product output will be achieved through buffer ponds, softening, ion exchange and crystallization processes: (1) The brine is further concentrated and fed through lime; (2) Heat it with caustic soda solution to precipitate Ca and Mg; (3) Use ion exchange equipment to reduce Ca and Mg; (4) Add soda ash to generate lithium carbonate at high temperature.

For the leading salt lake lithium extraction leader with first-class endowment and precipitation method, it has become a consensus that refined and improved yield and improve the yield

Saltfield precipitation method is the most commercialized and traditional salt lake lithium extraction process in the lithium industry. This route is mostly adopted in the first-line salt lake projects in South America with excellent resource endowment and natural conditions.Currently, the mainstream precipitation methods are divided into two categories. One is the evaporation precipitation method of salt fields represented by SQM and Yabao in the Atacama Salt Lake in Chile. The other is the precipitation method represented by Olaroz of Allkem (in production) and Cauchari-Olaroz of Ganfeng/LAC (in construction and about to be put into production). In addition to relying on evaporation and sunburn, a large amount of quicklime is also added to the salt fields to reduce sulfate and magnesium ions. The precipitation method in the past was a mature but relatively extensive process. Not only did the overall yield of lithium be low, but the lithium carbonate products at the back end were also mainly industrial-grade. However, with the improvement of environmental standards in the global mineral industry, the increasingly strict requirements for ESG downstream of new energy vehicle terminals in Europe and the United States, and the explosive growth of demand for lithium resource supply efficiency, we have paid attention to the traditional extensive salt field precipitation method being towards refinement, and the research on the loss of lithium in the salt field system is deeper, most of the production capacity is pursuing lean production to implement technical transformation, so as to implement a significant increase in lithium production capacity without expanding brine extraction and freshwater consumption, and even on the premise of significantly reducing brine extraction and freshwater consumption, we will implement a significant increase in lithium production capacity and optimize product quality.

Chile Atacama Salt Lake - SQM: The world's largest salt lake lithium extractor company, which significantly expands production and significantly reduces the amount of halogen extraction

Chile Atacama Salt Lake is located in the Antofagasta region of northern Chile in the South American lithium triangular region. The salt lake is about 100 kilometers long, about 80 kilometers wide, and at an altitude of about 2,300 meters (very ideal). It is the world's highest lithium ion concentration and the largest proven resource volume. Bolivia's Uyuni Salt Lake will most likely surpass Atacama in the future in terms of the potential of lithium resources in the future, but its lithium ion concentration and brine components are far inferior to Atacama. Currently, the two companies that are developing potassium and lithium resources in Atacama Salt Lake are mainly Chile SQM (Chile Chemical Industry and Mining Company) and Albemarle Corporation of the United States. According to Chile's new mining law in 1983 (lithium is a strategic metal that cannot be granted mining rights), neither of them has the mining rights in the main section of the salt lake. Both need to obtain leases and lithium quotas from the owner of the mine rights, the state-owned agency Corfo, for production. SQM has signed a lease with Corfo since 1993, with the mining rights area covering 819.2 square kilometers (81920 hectares). The recently renewed lease expires in 2030. SQM has a lithium metal quota of 349,500 tons of lithium metal, equivalent to 1.86 million tons of lithium carbonate equivalent. Renegotiation will be required after the expiration of the future lease.

SQM In the Atacama Salt Lake Mining Area, it mainly consists of four parts, including the ore source and water supply system, evaporation tank, potassium sulfate area (SOP) and potassium chloride area (MOP). Among them, in 2021, 379 halide extraction wells with an average depth of 39.5 meters, 360 evaporation tanks with a total of 25.55 square kilometers (2555 hectares) have been built (10.33 square kilometers for evaporation and extraction of sodium chloride, 9.86 square kilometers for evaporation and extraction of potassium chloride, potassium sulfate and sodium chloride, and 5.36 square kilometers for extraction of light halogenite, lithium chloride and magnesite), and 9 processing plants are also equipped. In the Carmen production area, the main facilities include storage areas such as lithium chloride, lithium carbonate factories (boron SX, purification, carbonization links), lithium hydroxide factories, etc.

The lowest cost: With the resource endowment, the cost of lithium carbonate produced by SQM is in the global low quarter. According to the 2021 technical report assessment (in the context of global inflation), the production and operation cost, including raw material consumption and labor, is about US$3,000/ton, which was once lower than US$2,000/ton in history. However, it should be noted that SQM, including Yabao, must pay the lease fee (potassium and lithium products) levied to Chile Corfo, and adopt the advanced rate based on the selling price, reaching 40% at the highest level.

In the process flow, SQM uses the classic salt field precipitation method to evaporate through solar energy in the evaporation pool around the Atacama Salt Lake, rock salt, potassium salt, and light halide stone are precipitated step by step, and finally 5.6~6.2% lithium-rich old halogen (halogen drying cycle is about 12 months). The old halogen is then transported by truck to Salar del Carmen near Antofagasta port for further treatment, extracting boron, removing impurities, and precipitating lithium to obtain lithium carbonate.The key point is that SQM used to build salt fields to use potassium as the main product and lithium as the by-product. Therefore, two large-scale salt fields were built to produce potassium chloride and potassium sulfate respectively. In the past, the lithium extraction capacity was insufficient (the demand had not risen) and mainly sold the old halide containing lithium directly or returned to the mining area. Therefore, in the current lithium production capacity expansion, SQM did not need to build new salt fields, expand the amount of halide extraction, or expand the production scale of potassium fertilizers (even reducing), so it can quickly and controllably improve the lithium resource capacity of the salt lake mining area with a controllable and relatively flexible approach. In order to meet higher ESG standards and reduce the impact of halogen extraction and salt lake resource development on the ecological environment and surrounding communities, SQM's sustainable development plan plans to reduce terrestrial freshwater consumption, reduce carbon emissions, and reduce salt lake brine extraction. Among them, (1) It is planned to immediately reduce the amount of freshwater used on land by 30% on the basis of 2019 and reduce the amount of freshwater by 50% by 2030; (2) to achieve carbon neutrality of all product lines by 2040, lithium, potassium and iodine will be achieved in advance in 2030; (3) By improving yield and production efficiency, the amount of brine extraction will be actively reduced by 20% in November 2020 until the level of reducing the amount of 50% by 2030.

Chile Atacama Salt Lake - Albemarle: Recovery optimization technology is expected to be deployed in 2022, from 40% to 65%

Another resource provider engaged in salt lake resource mining in Atacama, Chile is Albemarle Corporation in the United States, which is the world's largest lithium and its derivatives manufacturer. Yabo and its predecessors (from Foote, Cyprus Foote, Chemetall, Rockwood and finally Yabo) have a long history of development in Atacama Salt Lake in Chile. They discovered brine resources in the 1960s, signed a long-term agreement with the Chilean government for the development of lithium-rich old balsamics in early 1975 and obtained the first mining quota of 200,000 tons of lithium metal. The construction of the salt field was started in 1981 and the construction of the La Negra lithium salt plant was started the following year. In 2015, Yabao acquired Rockwood and officially entered the lithium industry, and at the end of 2016, it signed a salt lake lease with Chile Corfo. At present, it has built a lithium carbonate production capacity of about 85,000 tons per year around Atacama.

According to the agreement reached by Yabao at the end of 2016 with Corfo in Chile, the lease term of Atacama Salt Lake is extended to 2043, with an area of ​​approximately 167 square kilometers (16,700 hectares). The lithium extraction quota increases the amount of 262,132 tons based on the original remaining amount of 200,000 tons of lithium metal equivalent, thereby increasing the total amount of Yabao to 340,170 tons of lithium metal (as of the end of August 2021), equivalent to more than 1.81 million tons of lithium carbonate equivalent, and the expiration time of the quota is January 1, 2044.

Compared with the SQM that also operates at Atacama, Yabao has a smaller lease area, but the lithium ion concentration is equally excellent. The lowest, highest and average lithium ion concentrations in the Atacama Salt Lake Basin reach 900mg/L, 7000mg/L, and 1400mg/L, respectively. According to Yabao's 2021 annual report, the total amount of lithium resources (proven + control + inferred) in the mining area is 1.491 million lithium metal, of which the proven + control resource is 1.36 million tons of lithium metal, corresponding to the average lithium ion concentration of 1959mg/L; the amount of lithium resource reserves (proven + summary) in the mining area is 647,000 tons of lithium metal, corresponding to the lithium ion concentration as high as 2071mg/L.

In terms of production process, Yabao is similar to SQM, but is slightly different in the miscellaneous removal process. After extracting the raw halogen containing about 0.2% of lithium, the solar energy was used to evaporate and concentrate in the salt field. After 18 months of sunburning in the five salt field systems (SQM only takes 12 months), the old halogen enriched to about 6% was transported to the La Negra factory near the port of Antofagasta for lithium carbonate production. The biggest difference from SQM is that Yabao's salt field system initially used lithium as the main product and potassium fertilizer was only used as a by-product of the lithium business, so Yabao's salt field area is relatively small. However, every capacity expansion requires the construction of a new Yantian evaporation system and evaporate and dry the halogen. In addition, the product shipped strictly requires battery grade as the standard, so its capacity climbing and product certification cycle are relatively slow.

Argentina Olaroz Salt Lake - Allkem: The production capacity will be expanded to 42,500 tons by the end of 2022, from extensive to refined

Olaroz Salt Lake is located in the Jujuyi Province, Argentina, not far from the Chilean border, and has relatively convenient logistics and transportation. Its resource volume is at the forefront of the world. Orocobre, the predecessor of Allkem, explored the Olaroz Salt Lake in 2008, and introduced Japan's Toyota Trading (TTC) in 2010. Adding to the dry-share equity of JEMSE, an investment platform in Jujuy, Argentina. The three parties hold 66.5%, 25% and 8.5% of the equity of the project operation platform respectively. The Olaroz project started construction in November 2012, put into production in early 2015, and released the first batch of commercially produced lithium carbonate products in April. It was the first newly put into production of salt lake lithium extraction facilities in more than 20 years. In addition, the project is also an important layout of Japanese-funded enterprises in South America's lithium resources. Japanese shareholders and Japanese syndicates provide low-interest loan support for the first and second phases of the project. JOGMEC of Japan's state-owned assets provided guarantees. Lithium carbonate products are exclusively sold by Toyota Tongshang. The completion capacity of Olaroz Phase I is 17,500 tons of lithium carbonate/year. After the second phase of the second half of 2022 is put into production, the total capacity of lithium carbonate will be expanded to 42,500 tons of lithium carbonate/year.

In terms of the process flow, based on the traditional evaporation and precipitation method, and according to the characteristics of the brine components, the company also added quickstone ash to the salt field to reduce sulfate and magnesium ions. The subsequent boron removal, impurity removal and lithium precipitation are all traditional processes. The maximum freshwater consumption of Olaroz Salt Lake is less than 20L/s, which is lower than the industry standard. No tail-half storage facilities are set up. The tail-half brine during the production process is reinjected into the circulation system. The salts precipitated in the drying pond are collected and removed every three years.

Olaroz has not been smooth since its production in 2015. It was once questioned due to fluctuations in the brine concentration in the Yantian system and low product quality (only "coarse carbon grade" lithium carbonate can be produced). After comprehensive evaluation, optimization of the Yantian system, standardization of the operation process, and changes in management, production has been stable (the concentration of old halogen entering the workshop is stable in the range of 7000-7500ppm), the first phase output has achieved ~75% of the design level, the magnetic particles of lithium carbonate have decreased by 93%, and the proportion of battery-grade lithium carbonate production is 35% in 22Q1, and is expected to increase to 50% in the future. However, we have noticed that the increase in Olaroz's output in Phase I was due to the advance putting the Yantian built in Phase II into use. Therefore, after the second phase was completed in the next phase, the overall capacity utilization rate of the project still needs to be verified.

For downstream customers, Allkem's predecessor Orocobre has signed a long-term supply agreement with PPES, a battery company jointly venture between Toyota and Panasonic, to supply up to 30,000 tons of lithium carbonate equivalent lithium salt products annually by 2025. We believe that in the future, Olaroz will become an important strategic fulcrum for Japanese lithium battery companies to ensure the supply of lithium resources.

United States Silver Peak Salt Lake - Albemarle: The only salt lake currently produced in the United States is currently producing lithium extraction, with a very low magnesium lithium ratio

Silver Peak Salt Lake (Silver Peak) is located in Clayton Valley, Nevada, USA. This area was once a famous silver and gold mine area in American history, so it formed a mining town named after "Silver Peak". The resource development process of Yinfeng Salt Lake can be traced back to around 1860. Later, Foote Minerals officially started mining in 1966. It is the earliest salt lake project in the world to use lithium as its main product, and is of milestone significance. Later, Foote was integrated by Chemetal, and Chemetal was integrated for Rockwood Holdings, and finally merged by Albemarle (American Yabo Company). Later, Yabo sold Chemetal as an independent subsidiary of the surface treatment business to BASF. In terms of resource endowment, although the lithium concentration of Yinfeng Salt Lake is not ideal, the magnesium-lithium ratio is extremely low, only 1.3/1.4:1, so it is suitable for evaporation precipitation method for concentration separation. To this day, Yinfeng Salt Lake is still Yabao's only lithium resource base in the United States, with an annual production capacity of about 6,000 tons of lithium carbonate, and is accelerating the capacity doubling plan to expand its capacity to 12,000 tons by 2025.

Yabao's mining rights in Yinfeng Salt Lake cover 13,500 acres (more than 10,500 acres are held by the company, and the rest are leased from the US government). Several startup resource providers are also engaged in the exploration of salt lakes and sedimentary rock-type lithium resources in the non-core areas around the mining rights. According to the 2021 annual report, Yinfeng Salt Lake has: (1) a total resource of 980,000 tons of lithium metal, of which 350,000 tons of lithium metal are controlled + proven resources are 350,000 tons of lithium metal, corresponding to lithium ion concentration of 145mg/L, and the inferred resource is 630,000 tons of lithium metal, corresponding to lithium ion concentration of 121mg/L. (2) The total proven total reserves are about 620,000 tons of lithium metal, and the lithium ion concentration is 83mg/L.

In production, the brine of Yinfeng Salt Lake in the Yantian system (area exceeds 16 square kilometers) takes about 2 years to evaporate and enrich the lithium ion concentration of 5000ppm, and is initially removed, and then transported to a supporting lithium salt factory near Yantian to produce lithium carbonate products. Although it has experienced long-term mining, Yinfeng's resource endowment can still support a mining life of about 20 years according to its current production intensity, and can supplement Yabao's industrial-grade lithium salt products with a certain scale.

Atypical brine lithium extraction project: commercial exploration will not stop, and direct lithium extraction technology is a must-have

In addition to typical salt lake brine, it also contains rich potassium lithium resources in oil field water, deep marine brine, and geothermal brine. Since such projects are difficult to build salt fields for evaporation and concentration, innovative lithium extraction technologies such as raw halogen adsorption must be adopted. However, in view of the economic problems of deep brine well drilling, the difficulty in predicting the sustainability of brine extraction, the "fight" between oil and gas extraction and lithium extraction, the failure to allow brine reinjection in some projects, and the feasibility of comprehensive utilization, it has not yet been commercialized. Since such projects focus on green and sustainable lithium resource development, they have successfully attracted leading downstream companies such as General Motors, Volkswagen, Renault, Stratrantis, LGES, and Umeco to sign underwriting agreements, but we believe that they are mainly "the limelight". Overall, we judge that based on the mature deep brine bromine ore and geothermal power stations currently being produced, grafting the device with the newly added adsorption method to directly extract lithium is a more feasible commercialization path. The core of success or failure lies in two points: whether the tail brine can be re-injected and whether it is compatible with the existing production operations. (Report source: Future Think Tank)

United States Arkansas Smackover Project - Standard Lithium: Direct lithium extraction from bromine/hydrocarbon tail solution, supported by Cochrane

Standard Lithium Brine Lithium flagship project is the United States Arkansas Smackover Project, consisting of the Lanxess project and the SWA (South-West Arkansas) project in Arkansas, both located on the Smackover strata. Unlike other brine lithium extraction projects, the company uses brine raw materials as by-products of liquid bromine ore or oil and gas fields. As of 22Q1, Standard Lithium has officially signed an agreement with Lanxess AG on the one hand, and fully promoted feed research, planning to form DFS in 2022Q4. At the same time, it has obtained a US$100 million investment from Koch Strategic Platforms, a subsidiary of Koch Industries Group, through targeted issuance, and agreed to acquire future lithium products and carry out further cooperation. The

Lanxess project and the SWA project are both located in the Smackover region, which is the most brine-rich in Arkansas, USA. This region is the core of the US oil fields and bromine industry. The Smackover formation has the best bromine content in the world (30 times higher than seawater). Therefore, Albemarle, Lanxess AG and others have bromine extraction plants here. However, in the production of oil fields and bromine, the waste brine containing lithium was injected back into the formation before and was not used. Therefore, Standard Lithium reached an agreement with global professional chemical companies Lanxess and Tetra Technologies, respectively, to use waste halogen in the production process for lithium extraction.

According to the PEA of two major projects: (1) The Lanxess project is Standard Lithium's flagship project, and its main raw material is brine, a by-product after bromine extraction. The project covers an area of ​​about 150,000 acres, and the total resource is inferred to be 590,000 tons of lithium metal, equivalent to 3.14 million tons of lithium carbonate equivalent, with an average lithium ion concentration of 168mg/L. (2) The SWA project is located 40 kilometers west of the Lanxess project. This brine area is mainly used to produce oil and natural gas, and lithium extraction raw materials are by-products for hydrocarbon extraction.According to the company's disclosure, it is inferred that the lithium resource amount is 225,000 tons of metal, equivalent to 1.19 million tons of lithium carbonate equivalent, and the average lithium ion concentration is 255mg/L.

As of 2022Q1, Standard Lithium has reached an agreement with Lanxess AG and established a wholly-owned company to be responsible for all development of the Lanxess project, promote front-end engineering design (FEED), and has 100% of the project's equity during this period. It plans to complete the DFS report in 2022Q4. After completing the DFS, Lanxess AG can choose to acquire no less than 30% of the project's equity and up to 49% of the project's equity. Previously, Standard Lithium also received a US$100 million investment from Koch Strategic Platforms, an investment platform under the US industrial giant, Koch Industrial Group, through a targeted issuance, to cooperate to promote project development and industrialization of direct lithium extraction processes. At the same time, Koch also signed a letter of intent to acquire the future lithium products produced by the project and help the project purchase key raw materials and reagents.

United States Arkansas Bromine Lithium Extraction Liquid - Albemarle: independently developed DLE Lithium Extraction, and once operated a pilot factory

Yabo As the world's second largest producer of bromine specialty chemicals, relying on Jordan's Dead Sea and Arkansas, the United States, to engage in resource extraction, and has built a mature vertical integrated supply chain from resources, basic products, and then to specialty chemicals. The brine concentration of its two major bromine ore resources is the world's top, and the production cost is the lowest in the world. Among them, the magnolia plant leased in southern Arkansas produces about 45% of the company's bromine products, and can be continuously produced for decades according to the current mining intensity.

As early as 2011, Albemarle developed a direct lithium extraction process, which can extract lithium carbonate from the bromine brine of the Magnolia bromine factory, and plans to build and operate the pilot factory through this technology. However, considering the quality of the extracted lithium and the high operating costs and capital pressure at that time, it did not continue to advance.

Salton Sea, California, USA Geothermal Brine - BHER: Berkshire Hathaway's geothermal brine lithium extraction project

Berkshire Hathaway Energy Renewables (BHER) is controlled by Berkshire Hathaway and plans to develop a geothermal lithium extraction project in Salton Sea, located in the southernmost part of California, USA. Salton Sea is the largest lake in California with an area of ​​343 square miles. Due to its magmatic linkage plate boundary, it is rich in geothermal energy and is one of the largest geothermal resources in the world. There are 11 operating geothermal power stations around the lake area, 10 of which are owned by BHER. In 2019, BHER began promoting the Salton Sea geothermal lithium extraction project, which was approved by the California Energy Commission (CEC) in May 2020. As of the end of 2021, the company adopted a proprietary ion exchange process to filter out lithium from flowing brine. It has operated two demonstration plants in the surrounding Imperial Country to produce lithium carbonate or lithium hydroxide. The first plant plans to extract lithium from brine first and operate in April 2022. The second plan is to convert it into lithium salt products. If the project commercialization verification is successful, it is planned to start commercialization operations as early as 2024.

Geothermal brine in Germany - Vulcan Energy: Combining geothermal energy development with brine adsorption and extraction of lithium, directly hitting European pain points

Vulcan Energy Resources, a two-listed start-up company in Australia and Frankfurt, Germany, focuses on the Upper Rhine Valley in Germany, and envisions and plans to combine "operating geothermal resources to solve Germany's energy crisis" with "commercial lithium extraction from geothermal brine". In terms of geothermal resources, Germany currently has 37 geothermal power plants in operation, especially the rich geothermal energy in the Rhine Valley in the Upper Germany. The company plans to form a technical team to promote the development of geothermal energy; in terms of lithium business, the company designs to directly extract lithium from deep geothermal brine using original halogen adsorption technology, and pour the tail liquid back into the ground. It plans to produce 40,000 tons of lithium hydroxide annually. The project is currently being promoted to DFS (completed in the second half of 2022), and is planned to be put into production in stages in 2024.Since the labels such as "clean renewable energy in Europe, green zero-carbon lithium extraction, and local lithium resource development in Europe" are the pain points of the anxiety of the European new energy vehicle industry chain, the avant-garde Vulcan Energy has attracted the attention of many lithium-electric materials, batteries and European automakers. Among them, the car company Stellantis has become the second largest shareholder (holding 8% of the shares). At the same time, it has also signed underwriting agreements with Youmeke, LGES, Volkswagen, Stellantis, and Renault, locking in all production capacity in the five years before production. We believe that the company's business vision is undoubtedly of reference significance for the global lithium industry, but geothermal energy development and raw halogen lithium extraction (including the production of lithium compounds at the back end) are all highly specialized and heavily invested in the capital, taking into account the difficulty of implementation in practice.

Vulcan Energy wholly owns 9 geothermal brine prospecting licenses, with a total lithium resource of about 15.85 million tons of lithium carbonate equivalent, distributed in Germany, Italy, France and other places. In addition, the company has also signed a 20-year brine acquisition agreement with geox GmbH, a geothermal power plant located in the Upper Rhine Valley, to extract lithium from its brine and return to the power station to re-inject it into the underground. Vulcan plans to complete the first phase of DFS in the second half of 2022 and drill in the first phase of the first phase and the second phase of the second phase, respectively.

As the basis of industrialization, Vulcan Energy is building a display factory for adsorption and direct lithium extraction in Germany. It produces 15-20kg/h concentrated lithium chloride solution from 5000-6000 L/h geothermal brine. As of April 2022, the design work has been completed and 80% of the required equipment has been purchased. It is planned to start production in 22Q3, and the production scale will reach a ratio of 1:200 compared to the commercial capacity in the first period in the future. Previously, the company had built a pilot plant (Pilot Plant 1) on an operating geothermal power plant, started operations in April 2021, and tested adsorbents from DuPont and other companies. The lithium ion concentration is stable and the impurity content is low, and the recovery rate is averaged 94-95%, higher than the design level of pre-feasibility study in 2021. In addition, the company has also built a lithium hydroxide display plant (LiLy) in the chemical park near Frankfurt. In the future, it will receive lithium chloride solutions produced from the direct lithium extraction display plant and cooperate with Nobian to develop technology to electrolyte lithium chloride to produce battery-grade lithium hydroxide.

Other atypical lithium extraction projects overseas: Geothermal brine lithium extraction is mainly concentrated in Europe and the United States, and oil and gas fields lithium extraction is concentrated in Canada and the United States

At present, projects that have made positive progress in geothermal brine lithium extraction are mainly concentrated in the Upper Rhine Valley in Europe and the United States Salton Sea. Focusing on Salton Sea in California, USA, in addition to the Berkshire Hathaway holding project, there are: (1) Controlled Thermal Resources (CTR)'s Hell's Kitchen Lithium and Power project, planned to provide 49.9MW of clean electricity in 2024 and 250MW from 2025 to 2026. In terms of lithium products, it hopes to deliver 20,000 tons of LCE in 2024, and has reached a strategic cooperation with General Motors to supply lithium products to it. (2) Energy Source Minerals' ATLiS project began to be promoted in 2016, using its unique lithium extraction technology, ILiAD, to extract lithium. The raw materials are from geothermal brine produced by the John L. Featherstone power plant that has been operating since 2012. The project has obtained environmental impact assessment and other licenses by the end of 2021 and is planned to deliver the first batch of lithium products in 2024. In addition, according to Vulcan statistics, related geothermal lithium extraction projects include TerraLithium (a cooperation project between AllAmerican Lithium and Oxy Low Carbon Ventures), Kenya Djibouti, Simbol (who refused Tesla acquisition but went bankrupt in 2015), NIAIST Japan, Hazen/Bureau of Mine and other projects, but most of them are in the laboratory or pilot plant stage.

Currently, overseas lithium extraction projects are mainly concentrated in the Smackover strata of the United States (Standard Lithium, Yabo, etc.) and the Leduc strata of Alberta Province in Canada (E3 Lithium, Summit Nanotech, etc.). In addition, Germany, North Dakota, Texas, and Saskatchewan, Canada also have the potential to develop lithium extraction in oil and gas fields.Among them, E3 Lithium has 7 sub-projects for lithium extraction in oil and gas fields in Alberta, Canada. Among them, Clearwater (flagship project), North Rocky Resource Area (NRRA) and Exshaw West Resource Area (EWRA) ​​all released PEA from 2017 to 2020. The three projects totaled 7 million tons of LCE inferred resources, with an average lithium ion concentration of about 53-75Mg/L. In June 2022, E3 Lithium has reached a cooperation with Imperial, Canada's largest crude oil producer, to further promote the development of the Clearwater project, with a planned total investment of US$710 million to build a 20,000 tons of lithium hydroxide production capacity, and to achieve production by the end of 2025, with a theoretical production cost of US$3,656/ton.

China's deep underground brine: contains large-scale potassium and lithium resources. Whether it can be reinjected constitutes a key prerequisite for commercial utilization

The distinction between deep underground brine and shallow brine of salt lake is mostly based on underground brine with a mineralization degree greater than 50g/L and located in the deep halogen storage layer of salt-containing sedimentary basins. According to a more rigorous division, it can be divided into three categories: "oil field water type, marine deep brine type, and geothermal type". Deep underground brine is mostly in a deep buried, highly enclosed and high-pressure state. Since it does not participate in modern water circulation, it cannot be restored and supplemented. In China, its main distribution areas include the Sichuan Basin, the western Qaidam Basin, the Jianghan Basin, etc. It was found that it mainly originated from oil and gas exploration wells. Up to now, the exploration discovery degree is relatively low and the research is insufficient. The sodium, potassium, calcium, boron, lithium and bromine resources contained in deep brine are huge, and the potential for future exploration is huge. Through the pilot cases, the production process has gradually become clear. However, we believe that the core constraints at this stage are "whether it is compatible with oil and gas lifting, whether the tail brine can be reinjected, whether the well is economical and whether the brine can be continuously produced", which constitutes the key prerequisite for commercialization. If the bet cannot be returned, given the environmental protection issues of the storage of tail halide and solid waste, a comprehensive utilization plan for full components is needed. Not only is the production line too complex and the investment scale is huge, the problem is that the lithium salt production capacity of tens of thousands of tons will bring out millions of tons of sodium chloride, and even if the construction of a dual alkali plant is invested, it will face the problem of limited market capacity. If you can return the bet, it is a more direct economic calculation. The cost of deep drilling and drilling is high. It is necessary to build a detailed hydrological model for deep brine in order to ensure the sustainability of long-term brine extraction. The difficulty of its development will undoubtedly be far higher than that of salt lake-type brine resources.

Deep brine in western Qinghai: mainly brine potassium salt deposits, and many enterprises have layout of prospecting rights as resource reserves. Deep brine resources located in the western Qaidam Basin are characterized by rich in potassium, boron, lithium and bromine. They are similar in genesis to the shallow brine salt lakes in western Qaidam Basin. They are mainly concentrated in the fault depressions in front of the mountain, inclined depressions, and Nanyishan and Shizigou anticline tectonic areas. They are mainly brine potassium salt deposits, and a small number are oilfield water mines. Currently, Ganfeng Lithium, Zangge Mining, Zhongnong Group, etc. have all laid out deep brine resources in northwestern Qinghai. Most of these mineral rights are close to Mangya City and are currently in the reserve or exploration stage. In the future, it is expected to become a resource continuation for the Salt Lake District (the main salt lake produced in the production) in the central Qinghai for a long time.

Sichuan Xuanhan Deep Brine: Create a demonstration park first and promote the construction of the pilot base

Dazhou Xuanhan Deep Brine is located on the east side of the Sichuan Basin. It contains rich potassium lithium resources. In 2017, Xuanhan County discovered lithium-rich potassium brine and mulhalite. It is the first marine lithium-rich potassium resource mine in the country. It is predicted that lithium-rich potassium brine within 1116 square kilometers will be about 2.09 billion cubic meters, containing 2.4 million tons of lithium chloride, 56 million tons of potassium chloride, 2.89 million tons of bromine, 12.16 million tons of boric acid, 540 million tons of sodium chloride, and 70,000 tons of iodine. The highest lithium ion concentration is 427mg/L, the potassium ion concentration is 30.12g/L, and the magnesium-lithium ratio is only 4-6:1. In 2008, the region found that its natural gas reserves reached 500-550 cubic kilometers. It is the largest and most abundant super-large marine gas field in China, including Xuanhanpu Polygonum Gas Field and Puguang Natural Gas Purification Plant. In terms of potassium lithium resource development, Hengcheng lithium potassium pilot base and Hanwei lithium potassium pilot base are built, and primary products such as lithium, potassium and sodium are extracted through well extraction.As of 2021, Xuanhan County has completed the park planning and industrial planning, and aims to build the first deep brine lithium potassium comprehensive development demonstration park and a 100,000-yuan industrial park in the country. Focusing on lithium resources, the lithium battery new energy industry and supporting projects based on the annual production of 50,000 tons of battery-grade lithium carbonate, 100,000 tons of lithium iron phosphate positive electrode materials, and 100,000 new energy vehicle manufacturing.

Dazhou Hengcheng Energy Group obtained the Dazhou Xuanhan potassium salt exploration rights in 2003. So far, it has completed a total investment of more than 300 million yuan and has built a Hengcheng Potassium Lithium Pilot Base. The existing probation ore area is 35.13 square kilometers, located in the core area where lithium potassium resources are rich in Xuanhan. The predicted resources are: 120,000 tons of lithium chloride, 2.8 million tons of potassium chloride, 150,000 tons of bromine, and 100 million tons of potassium sulfate of new halide potassium salt ore. In 2008, the company independently researched and established the "Dazhou Natural Gas Energy and Chemical Industry Zone Salt and Natural Gas Associated Resources Technology Research and Development Center", and cooperated with the Chinese Academy of Geological Sciences, Tianjin University of Science and Technology, Chengdu University of Science and Technology, China Salt Engineering Technology Research Institute, etc. The plan is to promote projects such as "Potassium Lithium Resource Harvest and Harvest Project" and "30,000 tons of Potassium chloride/year and Brine Comprehensive Utilization Project". Among them, the Potassium Lithium Resource Harvest and Harvest Project is located in Hengcheng 3 Wellfield. It was completed in 2020 and will produce 1 million cubic meters of halogen per year; and the Potassium chloride project plans to invest 300 million yuan, with an annual output of 30,000 tons of potassium chloride, 1,000 tons of lithium carbonate, 19 tons of sodium chloride, 23 tons of iodine, 1,000 tons of bromine and 4,900 tons of boric acid.

Special adsorbents for lithium extraction in salt lakes are in strong demand, and high-performance products will be sought after.

. In the context of efficient adsorption and extraction of lithium has become one of the main solutions for lithium extraction in the world, coupled with the global lithium industry's diligent pursuit of higher selectivity, greater adsorption capacity, longer cycle life, and lower device investment, we expect that in the future, special molecular sieve/ionic sieve adsorbents for lithium extraction in salt lakes will have a strong demand, and adsorbent materials and system devices with high technical barriers will be tighter. The adsorption method of

is generally mature, but the special adsorbent barrier for lithium extraction in salt lakes is relatively high. Chinese companies have come from the

adsorption process as a whole. Its development history can be traced back to 1935 and was used in water treatment in the 1960s. Its current application is mature in many fields such as environmental protection, medicine, food, and hydrometallurgy. In the overall field of adsorption materials, overseas leading enterprises have production capacity and technical advantages. The first echelon is mainly a large global adsorption resin material manufacturer, including Dow Chemical in the United States, Lanxess in Germany, etc. Its advantages are its complete product line, leading core technology, strong R&D capabilities, and a long history of the company. Therefore, it occupies the global market share of high-end adsorption products; the second echelon is a leading domestic adsorbent, such as Lanxiao Technology, etc.; the third echelon is a regional small and medium-sized enterprise distributed in China, India and other countries. The overseas production capacity of adsorbed resin accounts for about 53% (the global production capacity of multinational companies such as Dow Chemical in the United States, LANXESS, UK Philet, Japan Mitsubishi Chemical, Sumitomo Chemical in the United States accounts for about 46%), and China accounts for about 47% of the world. However, in the salt lake lithium extraction industry, adsorption method is still a blue ocean and is still rapidly iterating and upgrading. In the field of special adsorbents for salt lake lithium extraction, we believe that Chinese companies have come from behind and are at the leading level in the world. The essential reason is that the market for adsorbing and extracting lithium extraction is in China (the technology is required for the salt lake brine with high magnesium-lithium ratio and low lithium content in Qinghai). Therefore, there are more opportunities for experiments and industrialization projects, and it continues to be iterative and upgraded in "Learn from Comparison to Help Over". Looking forward, the future capacity construction of lithium extraction in Qinghai salt lakes, the development of salt lake resources in Tibet, and the investment boom of Chinese-funded enterprises in the "lithium triangle" region in South America will bring historic opportunities to the development of special adsorbent resins for lithium extraction in salt lakes and the growth of professional lithium extraction technology service providers.

The adsorption process accounts for 66% of the global lithium extraction capacity of salt lakes under construction, and the high-end adsorbent capacity is structurally tight

According to our statistics, the global lithium extraction capacity of salt lakes in 2022 was about 492,000 tons, of which the production capacity of salt lakes under construction was about 90,000 tons, accounting for only about 18%; as of the first half of 2022, the planned construction capacity of salt lake lithium extraction in the global salt lake has reached 860,000 tons, of which the production capacity of salt lakes under construction has reached 571,000 tons, of which the production capacity of salt lakes under construction is as high as 66% of the global lithium extraction capacity of salt lakes under construction. This data fully confirms that adsorption method has become the main solution for the world's new generation of lithium extraction of salt lakes.

At present, special adsorbents and system devices for lithium extraction in global salt lakes are still in the development and iteration stage. Although there are many R&D and production enterprises, there are only a handful of suppliers of special adsorbents for salt lake lithium extraction that have been deeply rooted in the long term and have made achievements, mastered their own patent portfolio, have specialized and scale advantages, and have continuous R&D and large-scale production capabilities. At the same time, due to the high differentiation of product performance, the production efficiency of the production line is directly determined, the high capital investment is involved, and the trial and error and replacement costs are high, the standards for resource providers to choose technical service providers will be more cautious and strict in the construction stage of truly commercialized production capacity. Under this background, we expect high-end salt lake lithium extraction special adsorbent materials and their system devices to experience structural supply tightness, and leading lithium extraction technology service providers will be expected to enter a positive development cycle of "relying on specialization and scale-based development - getting more opportunities for industrialization projects - more accumulation of technology and experience, and faster iteration and upgrading of products."

China's representative salt lake lithium extraction process service provider

Focusing on the construction of lithium extraction production capacity of salt lake lithium extraction, the main technical service links include: process package design, lithium extraction material development (adsorbent, membrane, extraction agent, etc.), supply of special devices, engineering design/construction/operation, etc. Among them, we believe that the design of key process packages and the development of lithium-extracting materials are undoubtedly the most valuable, and providing a comprehensive solution of "material + device" can further consolidate barriers and improve competitive advantages. In addition to commercial lithium extraction technology service providers, scientific research institutes have also continued to play a key role in resource exploration, process research and development, and technology upgrade and iteration, and are the cornerstone backbone driving the commercial exploitation of salt lake resources.

Zhonglan Changhua: an integrated engineering technology service provider focusing on the chemical industry and mining fields. It is a meritorious enterprise of China's potassium salt and potassium fertilizer industry, and is a comprehensive engineering technology service enterprise integrating scientific research, design, survey, supervision, consulting, and engineering general contracting. The company was founded in 1978 and was formerly the Changsha Chemical Mining Design Institute of the Ministry of Chemical Industry. It has developed to this day and has been involved in chemistry, mining, tailings, environment and construction engineering, and has mastered a number of key core technologies in the fields of potassium, phosphorus, lithium, environmental protection, fine chemicals, etc. In 2020, it was awarded the title of "China Potassium Salt Potassium Fertilizer Industry Meritorious Enterprise". Among them, in the field of lithium extraction of salt lakes, the company has deeply participated in the construction of lithium extraction projects of Lanke Lithium Industry-Charhan Salt Lake and Qinghai CITIC Guoan-Xitaijiner Salt Lake, and has promoted process development and research based on Tibet lithium salt lake (Zacang Cha Ka, Jieze Cha Ka, Cha Bocuo, etc.), and has accumulated a deep accumulation in the field of process design.

Lanxiao Technology: a professional integrated solution provider for adsorption materials + equipment formation, and accumulating technology and experience. It is a leading enterprise in the field of adsorption separation materials in China. It has independent intellectual property rights and specializes in providing special adsorption separation materials for salt lake lithium extraction, as well as supporting system devices and overall solutions with adsorption separation materials as the core, especially the aluminum molecular sieve adsorbent industry leading. As of June 2022, the company has completed and under construction of 9 industrial adsorption units and whole lines, with a capacity of approximately 73,000 tons of lithium salt, objectively demonstrating the company's recognition in the lithium industry. Looking back, the company was founded by Ms. Gao Yuejing in 2001 in Xi'an Hi-Tech Zone and listed on the GEM in 2015.Founder has been engaged in research on modified functional polymer materials at the National University of Singapore, and has rich experience in production and research. At the same time, another actual controller, Mr. Kou Xiaokang, was also the chief engineer of Xi'an Electric Power Resin Factory, with a deep technical background. After 20 years of development, Lan Xiao has grown into a national key high-tech enterprise and a national-level specialized and new "little giant" enterprise. The company specializes in adsorption separation materials and supporting system devices. It has a rich variety of products, a large span of downstream application fields, and has the ability to explore new application fields. It has achieved import substitution in many fields. At present, the company has built a multi-functional and complementary industrial park mainly based on bases such as Xi'an, Hebi, Weinan and Belgium, including material production bases, equipment production areas, hazardous waste resource recycling parks, etc., with a total production capacity of 50,000 tons of adsorption and separation materials. In the development of the lithium extraction market for salt lakes, based on its own patented technology, the company is mainly based on Qinghai, China. At present, the development of the lithium industry has extended to overseas markets such as Tibet, China and Argentina.

Company's adsorption and separation materials include more than 30 series and more than 100 varieties, and are widely used in food, medicine, plant extraction, environmental protection, hydrometallurgy, water treatment, ion membrane caustic soda and other fields. As of the end of 2021, the company has a production capacity of 50,000 tons of adsorption and separation materials, of which Gaoling New Materials Industrial Park was completed in 2019 and has a production capacity of 25,000 tons/year for special products; and the Pucheng Materials Park project began operation in 2019 and has a production capacity of 15,000 tons/year for large-scale application series resins; in addition, it also includes the equipment production of Gaoling System Engineering Park, the resource recycling of Hebi Lansai, and the multi-way valve equipment matching of Puritech in Belgium. The company has formed a layout of interoperability of production capacity in various industrial parks and complementary multiple bases.

Company has obvious first-mover advantages, specialization and scale advantages in the field of hydrometallurgical adsorption resins. It has more than 10 patents and focuses on the research on the process of raw halogen lithium extraction. Using the "adsorption + film" process with independent intellectual property rights, the 10,000-ton lithium carbonate adsorption section of Zangge Lithium Industry, the 3,000-ton whole line construction of Jintai Lithium Industry Phase I, and the 1,000-ton renovation project of Wugang Salt Lake has been completed one after another. The company is currently promoting industrialization projects including the first phase of Guoneng Mining, the 10,000-ton project of Jinhai Lithium Industry, the 10,000-ton whole line construction of Jinkunlun Lithium Industry, the provision of the 5,000-ton lithium carbonate adsorption device of Jintai Phase II, the 4,000-ton whole line construction of Wugang Salt Lake, etc., and has carried out experimental projects of different scales in China (mainly Qinghai and Tibet) and overseas (North America, Europe, South America), and customers include SQM (Chile), Annson (US), Vulcan (Europe), etc. The overseas leading adsorption resin companies, DuPont, LANXESS and PiaoLite, have not yet been used on a large scale in the field of lithium extraction in salt lakes.

Jiuwu Hi-Tech: Based on the application of membrane materials and membrane separation technology, it extends to the special adsorbent for lithium extraction in salt lakes

Jiuwu Hi-Tech is a leading enterprise in the domestic ceramic membrane field. It focuses on the research and development and application of membrane materials and membrane separation technology mainly based on ceramic membranes, and provides membrane integration solutions to the fields of industrial process separation and special water treatment. The company was established in Jiangsu by Academician Xu Nanping and Nanjing University of Technology Research Institute in 1997. It was listed on the GEM in 2017. The largest shareholder is Shanghai Dehui Group. The company's ceramic membrane has an annual production capacity of 38,000 square meters. It is now building a new organic membrane production line in 2020. It is expected to form a production capacity of 30,000 hollow fiber membrane elements, 20,000 nanofiltration membrane elements, 50,000 reverse osmosis membrane elements, and 300 membrane devices per year. After completion, it is expected to reduce the company's costs and achieve production independence. In the field of lithium extraction in salt lakes, the company further extends to the field of efficient adsorption materials based on its advantages in the fields of membrane materials and membrane modules. Its products include sodium lithium, magnesium lithium separated aluminum adsorbents and titanium adsorbents. In 2013, the company achieved entry through membrane extraction, completed the 10,000 tons/year full-film extraction of Wugang Yiliping Salt Lake (providing a complete set of magnesium and lithium separation devices), participated in the 15,000 tons/year lithium extraction project of Bolivia Salt Lake (providing a complete set of membrane separation equipment), and cooperated with the subsidiary Qinghai Salt Lake Magnesium Industry, Sinopec (a deep brine lithium extraction project) and other companies.Since 2021, the company has further signed a business contract for the salt lake lithium extraction with Shigatse Zabuye Lithium High-tech (construction of a 100-ton/year pilot line for raw halogen lithium hydroxide extraction), Jinhai Lithium Industry, a subsidiary of Yiwei Lithium Energy Holdings (General contracting of 1,000-ton lithium chloride project), and Mount Everest of Tibet (Argentine Salt Lake original halogen lithium extraction pilot line). In addition, in May 2022, the company also signed a strategic cooperation agreement with the mining giant Zijin Mining to work together to build a related system for the development of salt lake lithium resources. Jiuwu will provide technical support for the lithium adsorption material development and lithium extraction process development for Zijin's planned acquisition and acquired lithium salt lake resource projects, and provide technical support for Zijin's lithium resource deep processing projects, sodium adsorption material development, metal lithium electrolysis and bipolar membrane electrolysis technology development.

Qidi Qingyuan: Special membrane separation process is the core advantage, and representative cases include Lanke Lithium Extraction Project

Qidi Qingyuan (Beijing) is a subsidiary of Qidi Holdings directly under the Ministry of Education. It was established in 2000 and was the Tsinghua Science and Technology Park Development Center established in 1994. The business focuses on film separation technology, relying on the School of New Materials, School of Environment, School of Chemical Engineering, etc. of Tsinghua University as its technical support, focusing on application development in salt lake lithium extraction, seawater desalination, material separation and concentration, municipal engineering, industrial water treatment and other fields. The company has Qidi Qingyuan (Shanghai), Anhui Qidi Qingyuan, Qinghai Qidi Qingyuan and other companies, and has invested in the production base of membrane products including microfiltration, ultrafiltration, nanofiltration membranes and other membranes in Wuhu, Anhui. The company's team has been deeply rooted in Qinghai. Since 2016, it has participated in the membrane magnesium-lithium separation + concentration project of Lanke Lithium 1+20,000 tons lithium carbonate production line, etc., the lithium chloride separation and concentration device of Zangge Lithium 10,000 tons lithium carbonate, and the 2,000 tons lithium carbonate pilot project of Qinghai CITIC Guoan Lithium 2000 tons lithium carbonate membrane method. In March 2022, Qidi Qingyuan (Shanghai) and Songdu Lithium Technologies signed a full-line BOT cooperation agreement for the SDLA Salt Lake 50,000 tons lithium carbonate project in Argentina, providing lithium extraction equipment, operation and technical services for the project. In addition, it participated in the project Qinghai Salt Lake Qidi New Materials 500 tons lithium hydroxide project, Tibet Zhacang Chaka feasibility study, and Jintai Lithium Carbonate project, etc.

Donghua Technology: China's top 100-ton lithium carbonate EPC+O project in Zabuye, Tibet,

Donghua Engineering Technology Co., Ltd. was established in 1963. It is an engineering survey and design enterprise affiliated to China Chemical Engineering Group, focusing on multi-field engineering construction and full-process services. Its service areas cover chemical industry, petrochemical, new materials, new energy, ecological and environmental protection, infrastructure, biomedicine, etc. Since 2018, the company has successively participated in the engineering design and construction projects of lithium carbonate projects in Zangge Lithium, Bolivia, Zabuye Salt Lake, etc., and has patented technologies such as "systems and methods for continuous production of battery-grade lithium carbonate" and "lithium carbonate reactor". In its development strategy, the company has clearly adhered to the development direction of new materials, new energy and new environmental protection, continuously optimized the lithium extraction technology of salt lakes, extended the industrial chain, and expanded the "lithium" market. We expect that after successfully winning the EPC+O contract for 12,000 tons of lithium carbonate in Zabuye Salt Lake in Tibet, the company will gain an advantage in engineering design and project construction at least in the engineering design and project construction process and in the future, after successfully winning the EPC+O contract for 12,000 tons of lithium carbonate in Tibet Zabuye Salt Lake, Tibet, with its status as a central enterprise, at least in the engineering design and project construction process, and in the future.

(This article is for reference only and does not represent any of our investment advice. If you need to use relevant information, please refer to the original text of the report.)

selected report source: [Future Think Tank]. Future Think Tank - Official Website