The Battery Boom Has Created a New Lithium Superpower in China
The Battery Boom Has Created a New Lithium Superpower in China · Bloomberg

In This Article:

(Bloomberg) -- With a ruined 13th Century castle, the Irish town of Carlow is an unlikely staging post in the super-charged rise of a key player in China’s push to dominate the global electric-vehicle revolution.

Ganfeng Lithium Co. sent a team to the town -- a 90-minute drive southwest of Dublin -- in 2013, shuttling between prospective lithium deposits dotted through the verdant countryside. It was part of their company’s first foray outside China amid a drive to boost production of key materials needed to make rechargeable batteries.

With projects and partnerships now spanning South America to Australia, Ganfeng is aiming to use proceeds from a share sale in Hong Kong this week to continue a growth spree that’s forecast to make it the industry’s second-largest producer from this year.

“They understood so many years back -- in the early 2000s -- that lithium would be driving all of the green energy revolution,” said Kirill Klip, a former executive with Ganfeng’s first overseas partner, International Lithium Corp., who joined the working party in Ireland. “It’s a very hands-on approach, literally -- they were working with our geologists turning over rocks, studying all the lithium boulders,” said Klip, now executive chairman of TNR Gold Corp.

Since that Irish expedition, Ganfeng’s share of refined lithium output has jumped from about 6 percent in 2013 to an estimated 11 percent this year, according to Roskill Information Services Ltd. It accounts for about a quarter of battery-grade lithium hydroxide, the material that’s now most sought after by automakers, the researcher’s data shows.

Formed in 2000 in southeastern Jiangxi province and listed in Shenzhen a decade later, Ganfeng’s expertise has been in processing lithium raw materials -- which come typically from South America’s salt lakes or mines in Australia -- into the next stage chemical products that can be used in lithium-ion batteries.

Its rapid growth and plans to use its share sale proceeds to lift output further have drawn blue-chip customers anxious to secure long-term supply. Since August, Ganfeng has struck new agreements with Tesla Inc., BMW AG, and battery producer LG Chem Ltd.

“They’ve reacted quickly in a changing market and that’s enabled them to grow their output to market requirements,” Robert Baylis, a London-based analyst with Roskill, said by phone. “Other companies haven’t been able to do that with the same speed.”

That swift growth has been well timed. Fewer than one million EVs had been sold in total at the start of 2016, there are now about four million on the world’s roads and it’ll take only about another six months to add a further million, according to Bloomberg New Energy Finance.