year old but good insight on how domestic supply ramped up when prices surged and potentially an indicator how quickly it will disappear again




Investigation into the Chaos in the Lithium Mine in Yichun, Jiangxi: Crazy Digging, National Speculation

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2023.02.14 18:32

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Eleven People in Finance | Liu Ding Zheng Keshu

The hot sales of new energy vehicles have driven up the price of lithium, and people who believe in "digging lithium into gold" are rushing to mine it. However, as regulations were implemented, lithium prices fell and large enterprises went into production, the lithium speculation boom quickly cooled down.

Yichun City 414 Mine. Photography: Liu Ding Zheng Keshu

News that a kind of white stone was valuable spread in the village.

In December 2022, in some villages in Yichun City, Jiangxi Province, men, women and children picked up hoes. Young people working abroad returned to their hometowns early and walked along narrow field roads and mountain roads to abandoned mining areas and mountains and forests. Digging stones all night long. The stones collected by hand and hoe are put into feed bags and piled into hills in the village open space, waiting to be weighed and sold.

Some villagers have just passed the New Year. Some neighbors came to pay New Year greetings on the first day of the Lunar New Year, but no one was seen.

What the villagers are rushing to dig is lepidolite ore. Yichun has the world's largest polymetallic associated lepidolite mine, and has proposed the goal of building the "Asian Lithium Capital" since 2008. According to the 2021 exploration survey by the Jiangxi Provincial Bureau of Geology and Mineral Resources and Yichun City, Yichun City and its subordinate jurisdictions It has proven lepidolite ore accounting for about 40% of the country's reserves and can produce more than 9 million tons of lithium oxide, equivalent to more than 20 million tons of lithium carbonate. It can theoretically equip 600 million electric vehicles.

The continued growth in orders for new energy vehicles in recent years has driven demand for lithium batteries, and raw ore prices have continued to rise. Data from commodity data service provider MySteel shows that the price of lithium carbonate has been rising in the past two years: in early 2021, it was less than 100,000 yuan per ton, and in November 2022, the price of lithium carbonate was 590,000 yuan per ton.

The price of lithium ore has risen accordingly, from tens or hundreds of yuan to 1,300-3,000 yuan per ton. Some villagers can earn five to six hundred yuan, or even thousands, from digging for one day. In 2021, the per capita disposable income of rural residents in Yichun City is less than 20,000 yuan, and the average monthly income is less than 1,600 yuan.

The lithium ore dug by the villagers was put into feed bags and piled in the village open space. Photo provided by interviewee

In order to dig out the lithium ore buried underground, the villagers dug a pit two to three meters deep in the back mountain and planted a small tree next to it on the ground. A local said there were more than a dozen such pits.

There were more and more quarrels. Some villagers believed that the land on the mountain belonged to them and would not allow outsiders to dig it. The other party retorted: "The trees above belong to you, and the resources inside belong to the country, and everyone has a share."

In the mountains behind a village in Yichun City, holes were dug out of the ground by villagers. Photography: Liu Ding Zheng Keshu

In the mountains behind a village in Yichun City, holes were dug out of the ground by villagers. Photo provided by interviewee

Minerals are not something that “everyone has a share of”. According to the criminal law, mining without a mining license is suspected of "illegal mining."

The local regulatory authorities acted quickly. They launched a rectification operation on January 28, 2023, the seventh day of the Lunar New Year, focusing on cracking down on illegal mining, transportation, and trading of mineral resources. The village cadres distributed paper notices and legal education leaflets, listed more than 20 reporting hotlines, and patrolled to persuade the mining villagers to return; simple shacks were built on the roadside at the entrance of the village, guarded by people, and monitoring equipment was installed; outside the village, law enforcement teams were stationed Set up checkpoints on traffic arteries to check suspicious vehicles.

In February, the local government reported an old case from 2016 to 2019: four people who did not apply for a mining license used excavators to mine illegally and made an illegal profit of 980,000 yuan, which constituted the crime of illegal mining and was sentenced. At the same time, the price of lithium carbonate has fallen. The latest price is 450,000 yuan per ton, down about 24% from November last year.

Rising lithium prices are stimulating more than just mining. A large number of local small and medium-sized enterprises have been established or transformed to join the lithium industry; existing large-scale enterprises have accelerated their layout and consolidated their advantages; ore intermediaries have emerged as the times require, and the sayings of "Lithium is everywhere" and "Lithium still exists" are spread.

The dividend period that weak individuals and small and medium-sized enterprises can capture is short-lived. Now, you can no longer see the sight of villagers going up the mountain to dig stones. When the newly built factories of large enterprises are put into operation, the industrial chain will form a closed loop, small and medium-sized enterprises will withdraw from the stage, and the craze of "national speculation in lithium" will also cool down; Yichun, the "lithium city" that is at the forefront of lithium batteries, also needs to be vigilant about production capacity. Issues such as excess, changes in battery technology routes, and environmental pollution.

crazy stone

The craze for mining lithium ore started in October last year. A local villager said that every late at night, there are excavators excavating in the back mountains, and trucks are transporting the materials one after another. The roar of machines and vehicles makes people unable to sleep. Some villagers blocked the project and complained about the noise, but they were appeased by the diggers.

More than a month later, perhaps too conspicuously, the excavators and large trucks stopped. Knowing that the stones are valuable, the villagers spontaneously go up the mountain. Hundreds of people can gather on a narrow hilltop. Bag after bag of ore collected by hand picking and hoeing is carried out on the shoulders of villagers and on electric vehicles.

The news attracts buyers. They came from other places on motorcycles, tricycles, vans and even heavy trucks. Some were owners of mineral processing plants that needed lithium raw materials, and some were middlemen who resold lithium ore. They purchased the ore by the kilogram and paid in cash to avoid leaving traces. The village was like Just like going to the market, the roads in and out of the village are congested. The price of ore is also different in different regions. The price of lithium feldspar near Xinfang Town in Yichun is about 1,300 yuan per ton, and the price of lithium porcelain stone in Huaqiao Township is about 3,000 yuan per ton.

In Jiangxi, the tradition of "picking up stones" has a long history. Jiangxi is rich in mineral resources. By the end of 2015, a total of about 190 kinds of useful minerals had been discovered in the province, and about 80 kinds of identified resource reserves ranked among the top ten in the country. A Xinyu City villager recalled that twenty years ago, villagers had the habit of mining ore, and merchants would come to buy it.

Outside the village, legal and compliant mining sites are equally busy.

The Yichun Tantalum-Niobium Mine (locally called the "414 Mine") owned by Jiangxi Tungsten Industry Holding Group Co., Ltd. is located in Xinfang Town, Yichun City. It is the largest proven lepidolite mine in the world. In early February, excavators plowed the contiguous mountain peaks into huge yellow pits, and heavy trucks continued to flow on the muddy mountain roads, transporting lithium ore to the concentrator.

After processing, the lithium ore of the 414 mine produces feldspar powder, lithium-containing slag, lepidolite and other products. In the past, when the ceramic market was good, factories extracted feldspar powder to make ceramics, and lithium was discarded. Mining companies even needed to hire people to transport lithium slag to the mountains for burial and stacking. Now, the price of lithium products has soared, and the ceramic industry is in depression. People are rushing to dig out the lithium slag that was previously discarded. The lithium slag and feldspar powder are piled up in the warehouse without anyone paying attention.

“Mining companies have made a lot of money,” the person in charge of a local mineral processing plant told Finance Eleven. The mining cost per ton of ore is less than 100 yuan, and the lithium ore from Mine 414 sells for about 1,300 yuan per ton.

Yichun City 414 Mine. Photography: Liu Ding Zheng Keshu

Yichun City 414 Mine. Photography: Liu Ding Zheng Keshu

In the lithium ore producing area of Huaqiao Township, part of the mountain has been dug up. Photography: Liu Ding Zheng Keshu

Locals said there had never been any rush for lithium ore before because it was not valuable. However, since 2022, the price of lithium ore has skyrocketed, and about 200 mineral processing plants have sprung up in villages near the mines within a year. October, when excavators appeared in the mountains behind the villages, happened to be the time when a large number of mineral processing plants were put into operation.

It is difficult for these concentrators to purchase ore from formal channels. Currently, Yichun’s lithium resources are nationalized or allocated to large enterprises. The Yichun Municipal Government established the wholly state-owned company "Yichun Mining Co., Ltd." in 2013 to integrate the purchase and storage of lithium resources across the city. According to the Jiangxi Provincial Government website, the company acquires equity interests in mines in various places through wholly-owned, holding, shareholding, entrusted operation, fixed income, etc. As of July 2022, 29 lithium-containing mines in the city that can directly produce have been acquired by the company. Reserve 19 seats.

Large enterprises enter Yichun.

In April 2022 , Ningde Times obtained an exploration right in Yifeng County, Yichun City with a quotation of 865 million yuan;

BYD announced in August 2022 that it would invest 28.5 billion yuan in Yichun City to build lithium mining and processing, lithium carbonate production, and power battery production projects;

In March 2022, Guoxuan Hi-Tech acquired a 51% stake in Yichun Hua Lithium Mining.

Demand has increased significantly, and formal mineral resources are controlled by the government and large companies. Ore processing plants can only buy privately mined ore from villagers. In addition to mining, more local people are looking for connections to resell.

The proliferation of mineral processing plants and the transformation of ceramic companies

Zhao Qitai (pseudonym), a businessman from Gao'an City, Jiangxi Province (a county-level city under the jurisdiction of Yichun City), saw an opportunity. He is 34 years old. In March last year, he started reselling lithium ore and witnessed the skyrocketing price: the same grade of stone sold for 400 yuan per ton in March, and the price rose to 1,400 yuan per ton in the middle of the year.

When he first entered the industry, a friend warned him that the industry was “deep” and full of scammers, but he still entered. Back then, real estate was the hot spot after ceramics, and he regretted not buying more houses before housing prices soared. After missing out on real estate, he didn’t want to miss out on new energy again.

Amid the storm, there are a large number of people reselling lithium ore in Yichun, and Zhao Qitai is just one of them. Local people’s WeChat Moments, Douyin, and Weibo are full of information about finding or selling lithium. An unexpected case emerged: a processing plant purchased lithium ore and found that the grade was far lower than what was stipulated in the contract. After suing, seven entities in the chain were brought out - the goods were resold six times.

在这个利益链条上，货主享有绝对的主导权。一次，赵启泰去货场买锂矿石，担心品位无法保证，想先买500吨，并预付30万元的货款。对方一口回绝，称1000吨起卖，太小的订单不接。

还有一次，他支付100万元货款之后，对方拉着他去喝酒，饭后却说不卖了，理由是货被其他人订走了。拉扯一番，对方退回99.8万元货款，称2000元是当晚的餐费。“他们就是靠这手段赚各路买家的2000元。”

每天，赵启泰“至少跟10个骗子周旋”。有的货主在高品位的锂矿石中混入杂石，赵启泰们着急抢货，来不及辨认就整车装走，最后亏钱。有人假称自己是“领导家属”，有拿到锂矿石的特殊渠道，骗取货款。收款形式看似合理：市场价1000元一吨的石头，他们报价1300元，要求买货方分两张卡打款，1000元打到矿区官方账号，300元打到私人账号，作为“领导回扣”。打款后，杳无音讯。

赵启泰经常接到卖家的视频电话，卖家会展示一堆矿石并声称认识货主，询问他是否需要购买。为防止买家私自拉货，卖家在洽谈阶段不提供矿石的具体位置，只给模糊的地名。赵启泰判断，这类人不是一手货主，找到了货，就四处寻找买家，成交后赚取差价。

入行快一年，赵启泰总结，这种多手倒卖模式并不靠谱。他看好的模式有两种：

一种是从各种渠道搜集到锂矿石，将它们堆放在货场，买家上门购买；

另一种则是掌握第一手货源，直接对接有需求的工厂，带着工厂的资金和人员，前往货源处拉货，如此不用自己出钱，也能避免被中间环节欺骗或分利。

宜春市某锂矿石货场，正在装车。摄影：刘丁 郑可书

找矿的热情已经延伸到了一万公里外的尼日利亚。

宜春人蔡三姐（化名）在深圳打拼多年，此前做智能手机生产和销售，主要卖到海外。2022年，她看到家乡锂业的热潮，决定到尼日利亚发展锂产业。

非洲锂资源丰富，中信证券称其是“下一轮锂矿开发的主赛场”。尼日利亚出产“锂辉石”，锂元素含量远高于江西出产的锂矿石，可以跳过破碎提纯的工序，直接焙烧加工。

尼日利亚的街头，许多当地人售卖小包装的锂辉石，像国内乡村赶集。很多宜春人来此购买锂辉石，用集装箱发回国内。蔡三姐结识的三个宜春人，连英语都不会，就来尼日利亚找矿；还有一位浙江老板，从尼日利亚的矿区买了一批货，运输时被当地武装拦截，付了好多钱才放行。

调研一个尼日利亚矿区时，蔡三姐听说，当地有中国人发话，所有人来此购买矿石，都必须经他同意，否则就叫当地移民局抓人。确实有人被抓——不少来买矿的中国人，签证不符当地规定。

“有矿石，买矿山也不难，但不一定有命运出来”，蔡三姐说，当地绑架中国人的案件时有发生。

不论在江西还是尼日利亚，都有造富神话在流传。业内的人常会提到，某家公司赶上风口，赚了几千万，某个老板身价过亿。

现实中，更多的人在挣扎。赵启泰一个没车的朋友，入行两个月后，便宣称要买百万级别的豪车。后来，他被骗到四川看石头，因疫情在当地耽搁两月，没等到发货，差点连回程路费都掏不起。赵启泰身边，入行一个月就放弃，或是入行半年颗粒无收的例子比比皆是。

矿价刺激陶瓷企业转产选矿

由于需求扩张过快，产能无法及时跟进，锂产品供应短缺，价格飙涨。2020年至2022年，锂矿石价格从每吨一百元涨至千元以上，碳酸锂价格从每吨4万元涨至59万元，锂云母的价格也从每吨不到2000元涨至万元以上（注：不同地区出产、不同品位的锂矿石、锂云母售价不同，此处指大概的平均市场价）。

锂价攀升，带动当地产业转型。从工序上来说，锂矿石会先进入选矿厂，加工成锂云母，随后进入碳酸锂生产企业，经过烧结、卤水、蒸发等工序，变成碳酸锂，再进入电池厂，变成锂电池，安装到新能源汽车、手机、储能系统、电动工具上。

江西锂矿石资源充足，但选矿、烧结、卤水、蒸发生产线产能不足。《财经十一人》获悉，2022年一年之间，宜丰县新增约200家锂矿石选矿厂，而此前仅有不到10家。

宜丰县的李志强（化名）在当地做稀有金属生意。他听说，选矿厂每年能赚几千万元，有的老板一口气开了四五家。

宜春市某矿区边的选矿厂。摄影：刘丁 郑可书

个人创办的选矿厂，大多是“代加工”模式，承接产能不足的大企业订单——从矿区运回锂矿石，破碎加工，提取出锂云母后，再交付给大企业。“投资兴建选矿厂的人，都是有门路的，否则拿不到订单。”李志强对《财经十一人》说。

他熟悉的一家选矿厂，锂矿石加工费是每吨150元，成本约为100元，包括电耗、化学药剂消耗成本约80元，运输成本约20元，代加工费利润可达每吨50元（注：不同企业、不同订单、不同时间段的加工费不同，上下波动）。

选矿产线的日处理能力约为1000吨锂矿石，算下来，厂家每年可靠代加工盈利1800万元左右，而一条生产线的设备投资成本为2000万-3000万元，不到两年就能回本。

此外，如果生产的锂云母数量超过大企业交付要求，厂家也可以出售多余的锂云母。比如，假设大企业要求每处理1000吨锂矿石、交付100吨锂云母，而选矿厂提取出110吨锂云母，剩余的10吨锂云母归选矿厂所有。另外，选矿厂也可自己采购锂矿石，加工成锂云母后对外销售（注：不同锂矿石锂云母含量和产出率有差异，选矿厂技术水平也有差异，此处锂矿石的产出量只是简单假设）。

因此，工厂需要更多锂矿石。实力强的选矿厂通常投资两条产线，每天2000吨锂矿石才能“喂饱”。工厂想要多赚钱，就得提高产能利用率，抢到每一块锂矿石。这又激发了挖矿、倒卖矿石的热度。

高安市陶瓷产业基地，某陶瓷厂冒出燃烧锂云母产生的白烟。 摄影：刘丁 郑可书

高涨的锂产品价格，传导至宜春的陶瓷行业。受到房地产萎靡、竞争加剧、供应过剩、成本上升、疫情停工的影响，曾为宜春支柱的陶瓷行业，景气度连年下降。为了生存，只能转型。

从设备、工序来看，陶瓷厂向锂厂的转型有其优势。锂云母变成碳酸锂需要四步：第一，高温焙烧；第二，制成卤水；第三，蒸发，祛除水分得到氧化锂；第四，通过化学反应得到碳酸锂。

陶瓷生产的核心设备是高温炉，略加整改，就可以用来焙烧锂云母，改造成本相对较低；但后续的生产步骤需要新设备，新增投资较大。因此，目前大部分陶瓷产线转型只做第一步。

高安市（宜春下辖县级市）陶瓷厂高管张百胜（化名）估计，他所在的陶瓷产业基地，约有三分之一的产线转至锂业。

2022年中，张百胜听说，有陶瓷厂老板生意不好，将生产线以每年2000万元左右的价格出租，一个温州商人租下十条产线，焙烧锂云母，赶上风口，大赚一笔。

高安市某陶瓷厂高温焙烧炉，整改后可用于烧锂云母。 摄影：刘丁 郑可书

温州商人的经历让当地陶瓷老板们眼红。2022年10月，张百胜所在的陶瓷厂停止陶瓷生产，改造高温焙烧产线，购买新增设备，建设完整的碳酸锂生产线，总计投资约1.5亿元，预计2023年中投产。

届时，张百胜所在的陶瓷厂，将具备年产1万吨碳酸锂的能力。按照碳酸锂每吨45万元的价格，公司将实现一年45亿元的收入，只需要约200个员工；而其此前的陶瓷生产，每年仅能创造4亿元左右的收入，实现不到2000万元的利润，需要约400个员工。

锂业生态待优化

现在，多家大型锂矿相关企业在宜春建设产能，投产后，当地的产业生态将再次改变。

In early February 2023, in Yifeng Industrial Park, Yichun City, Yifeng Times New Energy Materials Co., Ltd., jointly invested by CATL and Longpan Technology , worked overtime to build the factory. The ground has been tidied up, and large machinery is installing the factory frame. Workers We didn’t even have a break during the Spring Festival.

CATL's factory under construction in Yifeng Industrial Park. Photography: Liu Ding Zheng Keshu

The factory has a total investment of 3.5 billion yuan, with a land area of more than 600 acres in the first phase. It is expected to be put into operation within this year. After completion, it will be able to produce 40,000 tons of lithium carbonate per year.

In December 2022, the mineral processing plant that BYD plans to invest and build in Dangtian Village, Tong'an Township, Yifeng County, Yichun City has also completed the land acquisition announcement. After completion, it will have an annual production capacity of 38 million tons, equivalent to 10 local small-scale mineral processing plants.

After large enterprises are completed and put into production, they will form a closed whole industry chain capability, no longer need the assistance of external mineral processing plants, and there will be fewer and fewer processing orders.

The living space of independent lithium carbonate production companies, including a large number of transformed ceramic companies, will also be squeezed. The Yichun Municipal Government plans to produce more than 500,000 tons of lithium carbonate by 2025, a six-fold increase from 81,000 tons in 2021, while the growth rate of downstream new energy vehicle sales has begun to slow down.

In addition, for independent mineral processing plants and lithium carbonate production companies, raw materials and demand are outside and difficult to control, and the processing costs in the middle are fixed. Once the price changes too fast or there is a shortage of raw materials, the business risk will become greater. .

At present, the price of lithium carbonate is about 450,000 yuan per ton, and the cost of processing lepidolite into lithium carbonate is about 400,000 yuan, including the procurement cost of lepidolite of 300,000 yuan (based on 25 tons of lepidolite producing 1 ton of lithium carbonate) , calculated at 12,000 yuan per ton of lepidolite), the energy consumption and labor cost are about 100,000 yuan. If the price of lithium carbonate falls below 400,000 yuan per ton but the price of lepidolite does not fall, the company will be unprofitable.

Lithium carbonate price trend in the past year

Currently, the mainstream technologies in the industry are lithium extraction from salt lakes and lithium extraction from spodumene ore, both of which cost much less than lepidolite. The cost of salt lakes does not exceed 100,000 yuan per ton, and the cost of lithium extraction from spodumene does not exceed 200,000 yuan per ton.

Before lepidolite makes a major breakthrough in lithium extraction technology and costs are significantly reduced, there is only the advantage of resource security - domestic lithium stocks are mainly lepidolite, spodumene and salt lakes are mostly in plateau and mountainous areas, and mining is difficult. Most Chinese companies go to South America and Africa. Prospecting.

This is not the first time that lithium price fluctuations have caused chain reactions.

In 2018, Zhang Baisheng invested in second-hand equipment with his friends and set up a mineral processing plant to purchase lithium ore and sell lepidolite. Looking upstream, they have no lithium mines and need to purchase lithium ore, and the price is not fixed; looking downstream, the sales of lepidolite are affected by demand, and prices are prone to fluctuations. Both costs and income cannot be controlled, and Zhang Baisheng can only fluctuate with the market. More often, they face falling prices of lepidolite, but the cost of purchasing lithium ore is easy to rise but difficult to fall, and the company suffers losses. In mid-2019, Zhang Baisheng couldn't hold on any longer and closed the mineral processing plant.

The price of lithium carbonate was at its lowest point in 2019. Not only small and medium-sized enterprise owners like Zhang Baisheng, but also many mining giants were unable to sustain the situation and went bankrupt. Supported by the high prosperity of new energy vehicles, the low price of lithium carbonate will not return in the short term. However, as the salt lake and spodumene production capacity invested and constructed by mining giants in the second half of 2020 will be realized this year, the price of lithium carbonate will remain stable. It is very difficult to exceed the high level of more than 450,000 yuan, and the profit margin of lithium extraction from lepidolite is difficult to guarantee.

The reason why villagers grab ore is the demand of ore processing plants; the reason behind the reselling of lithium ore or lepidolite by middlemen is mainly the demand of independent lithium carbonate production enterprises. Once the mineral processing plants and small and medium-sized lithium carbonate production are stagnant, the craze for lithium speculation among the people will also cool down.

Lithium carbonate production is a high-energy-consuming and high-pollution project. According to a notice from the Yichun Municipal Government, on November 24, 2022, the Yichun City Environmental Protection Department discovered that the thallium concentration in the drinking water in the main stream of Jinjiang River exceeded the standard. The government immediately suspended the water supply to residents of the relevant water plants. After investigation, it was found that Jiangxi Qijin Materials Co., Ltd. (Waste Lead Acid battery recycling enterprise) and Jiangxi Yongxing Special Steel New Energy Technology Co., Ltd. were suspected of discharging pollutants, and the public security department and the environmental protection department launched an investigation into them. Yongxing Special Steel New Energy has a lithium carbonate smelting production line at the foot of the mining area in Huaqiao Township where lithium porcelain stone is abundant.

November 24th is precisely the starting point for the decline in lithium carbonate prices. Lithium carbonate, whose average price has remained at a historical high of 590,000 yuan per ton since November 11, has experienced a single-day drop of 2,500 yuan, and has since begun a downward trend that continues to this day.

After the Spring Festival, young people in the village stopped digging stones and continued to go out to work. Zhao Qitai has experienced half a year when his income and expenditure will be balanced. He has recently invested in a mineral processing plant and has contacted a fixed ore supplier; Cai Sanjie returned to Yichun two years ago and met with upstream and downstream bosses, and will continue to expand business in Nigeria; Zhang Baisheng's ceramics The company has invested 150 million yuan in revamping its production line and is about to put it into production, with an annual output of 10,000 tons. They still believe that lithium can bring business opportunities.