We have another enormously important development for TNR Gold's royalty partner on the Marina Lithium Project, Ganfeng Lithium. The giant from China signed a 4-year supply agreement for battery materials with Huyndai. Ganfeng Lithium already supplies battery materials to a numeral of the most significant participants in the electric cars space including Tesla, BMW and VW. Hyundai is a fast-growing automaker with a range of cheaper electric cars and rapidly increasing its market share. They are targeting 30% growth for 2024 and will launch more affordable EV models soon.
"Due to the technical complexity, only the strongest Lithium companies will be able to develop new projects and achieve a significant production increase of Battery Grade Lithium. The whole industry produced only 737,000 T LCE of Lithium in 2022 and now we have to jump first to over 1 million T LCE by 2025. Ganfeng's Chairman is talking about 3 million T LCE annual demand by 2030 and Canaccord Genuity estimated that only Tesla will consume 2.7 million T LCE annually by 2030."
During the ongoing REE 2.0 Lithium price war Ganfeng is following its main strategy by using the crash in the Lithium market as an opportunity to consolidate the supply chains. The main efforts of all major players are focused on securing new production capacity for the raw materials and increasing the market share through long-term supply contracts for OEMs, automakers and, increasingly, providers of Energy Storage Solutions among other Lithium battery makers.
"According to Equal Ocean, Ganfeng Lithium "has planned to form a supply capacity of no less than 300,000 tons of LCE by 2025". "About 200,000 tons of LCE will come from the supply of its own resources".
Ganfeng Lithium is arguably one of the most active companies in the market building the Vertically Integrated Lithium Business. It built a diversified supply chain starting from the brine and hard rock sources for Lithium and advancing its ambitions with the cutting-edge technology of Lithium Solid-State Batteries.
By developing the Vertically Integrated Lithium Business Model including the production of higher-margin Lithium chemicals, battery materials and, particularly, expanding its Lithium Batteries business, Ganfeng can use its own raw material base of the Lithium supply chain to produce the higher margin products in the supply chain for electric cars.
Ganfeng's scale and technical expertise allow it to move into the higher value-added part of the supply chains while the producers of Lithium concentrate are being slaughtered by the REE 2.0 Lithium Price War.
TNR Gold Royalty Holding: Ganfeng's Mariana Lithium is on Track to Production in 2024
Mugglehead Magazine:
Ganfeng Lithium inks 4-year battery material supply agreement with Hyundai
By Rowan Dunne
China’s Ganfeng Lithium (SHE: 002460) finalized a lithium hydroxide supply agreement with the South Korean automotive giant Hyundai Motor Company (KRX: 005380) last week.
The agreement is valid from Jan. 1 this year until the end of 2027. Ganfeng said the price of product sold to Hyundai will be determined by an agreed-upon pricing formula. The company did not disclose any specific dollar figures for the deal or other particular details.
“The annual supply volume will be executed according to the agreement, the actual purchase volume and sales amount shall be subject to the final purchase orders,” Ganfeng said.
This is not the first supply agreement Ganfeng has had with a major vehicle company. The lithium producer signed a long-term supply deal with Bayerische Motoren Werke AG (BMW) (ETR: BMW) in 2020 and another with Tesla (NASDAQ: TSLA) in 2018. Volkswagen (OTC: VWAGY) buys battery materials from Ganfeng as well.
“Entering into this long-term supply agreement can satisfy Hyundai’s demands for key lithium raw materials used for production of batteries on the one hand,” Ganfeng said. “It is conducive to our company for improving its continuous profitability and facilitating its long-term growth on the other hand.”
