Ann: LOI with BASF extended to 31 December 2020, page-195

Overview of the global lithium ore industry

Global lithium resource supply is gradually clearing from high to low along the industry's cumulative capacity cost curve, and industry integrators are also eager to move. We believe that the supply structure will not be broken. If there are 1-2 mines to stop production in the future, the industry is expected to undergo a subtle change. At the same time, we believe that in view of the fact that the basic lithium salt of ore production is difficult to compete with salt lakes in terms of cost and safety margins, the ore system should try to maximize its quality advantage. The future opportunity lies mainly in battery-grade lithium hydroxide. On the whole, the analysis framework of the lithium industry needs to consider both the cost curve and product differences. "The clever combination of resources and processing technology" is the secret of long-term success in the lithium industry, and the value of the corresponding long-term investment is not significant. Metaphorically.