Car­low helps Gan­feng power ahead in bat­tle for bat­tery mar­ket

Irish Independent - Business Week - - IN PERSON - David Stringer and Martin Ritchie

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 sent a team to the town in 2013, shut­tling between prospec­tive lithium de­posits dot­ted through the 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 Mr Klip.

Since that Ir­ish ex­pe­di­tion, Gan­feng’s share of re­fined lithium out­put has jumped from about 6pc in 2013 to an es­ti­mated 11pc this year, ac­cord­ing to Roskill In­for­ma­tion Ser­vices.

It ac­counts for about a quar­ter of bat­tery-grade lithium hy­drox­ide, the ma­te­rial that’s now most sought af­ter by car­mak­ers, 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 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, BMW, and bat­tery pro­ducer LG Chem.

“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. “Other com­pa­nies haven’t been able to do that with the same speed.”

That swift growth has been well­timed. 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.

The jump in lithium out­put has swelled Gan­feng’s earn­ings – fore­cast to rise about a third this year – and cat­a­pulted the com­pany ahead of es­tab­lished in­dus­try lead­ers such as FMC Corp in terms of vol­umes. It’s on course to sur­pass the se­cond-largest, Chile’s So­ciedad Quim­ica y Min­era de Chile, this year, ac­cord­ing to con­sul­tant CRU Group, and is seen even­tu­ally chal­leng­ing the top player, Albe­marle Corp.

“It’s changed the face of the in­dus­try – you had the big three and now you’ve gone to the big five,” said Mike Tam­lin, chief op­er­at­ing of­fi­cer of Neomet­als, a part­ner with Gangfeng and Min­eral Re­sources, in the Mt Mar­ion mine in Western Aus­tralia. “Ar­guably the peck­ing or­der in the big five has changed,” with the ex­pan­sion of Gan­feng and Tianqi Lithium, he said.

Gan­feng added a stake in Mt Mar­ion in 2015 and made its first over­seas in­vest­ment in 2011 with Canada’s In­ter­na­tional Lithium, which re­mains a part­ner on prospec­tive de­vel­op­ment projects.

Still, the com­pany re­mains dis­ci­plined on its growth plans, Vice Chair­man Wang Xiaoshen said this week dur­ing an in­ter­view in Shang­hai.

“We lithium sup­pli­ers still have to be care­ful not to over-ex­pand our busi­ness, said Mr Wang. “We want to do things step-by-step, ev­ery year see how the mar­ket grows.”

Bloomberg

Gan­feng is fore­cast to be the in­dus­try’s se­cond-largest pro­ducer

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