"We don't produce water. We're just the porters of nature." People have already become familiar with this slogan for Nongfu Spring. However, the information it passes inadvertently reveals the basic economic law that an industry or an enterprise must do well: that is, mastering the upstream resources is absolutely the key point for the development of the industry chain. "Resources determine the victory" has become an industry consensus. Recently, the “mining war†that the power battery industry seizes resources caused by the rise of raw materials is rampant. In addition to the existing conservatives, the capital of each road is also particularly eye-catching, and the intensity appears to be intensifying. So what are the reasons behind the "mining war"? Who can win in the game? The reporter made a brief analysis of the above propositions for the industry's assessment only. New forces rushed to "mine war" The data shows that at the end of 2016, China's lithium salt production capacity was equivalent to approximately 170,000 tons of lithium carbonate, and the world was 190,000 tons. Lithium extraction capacity of lithium hydroxide was approximately 45,000 tons, and the others were lithium extraction capacity from ore. In 2017, it is estimated that 240,000 tons of lithium carbonate will be used, which basically belongs to the lithium extraction of lithium ore. Recently, the news that the price of lithium carbonate exceeded 180,000 yuan/ton caused great concern in the power battery industry and the entire new energy automotive industry. The analysis of the industry, such a high price, lithium carbonate gross margin may reach 60% -70%, net profit will naturally be very substantial. And just recently, Jiangte Electromechanical announced that the company's lithium carbonate prices will be controlled below 70,000 yuan, gross profit per ton will reach 100,000 yuan. The price of raw materials is “launching rockets.†Several happy families are naturally smiling at the upstream material suppliers. In fact, the domestic lithium carbonate leading suppliers Tianqi Lithium and Haofeng Lithium's 2017 first-year performance report also showed this point: Tianqi Lithium's first-half revenue was 2.115 billion yuan and net profit was 924 million yuan. The net profit rate was 43%; the frontline revenue of Li Feng was 1.625 billion yuan in the first half of the year, net profit was 607 million yuan, and the net profit rate was 37%. Driven by tempting profiteering, the new forces have recently entered the market with a view to earning a pot full and at least share a share. July 31, 2017 Zangge Holding Evening Announcement: The wholly-owned subsidiary Golmud Canggu Potash Co., Ltd. plans to invest in the establishment of the Zangger Lithium Industry Co., Ltd., and will invest no more than 1.4 billion yuan to build a 20,000 tons/year lithium carbonate project. The initial estimated construction period is 18 months. On October 10, 2017, Sino-Portuguese shares announced that they intend to purchase shares of 100% of Qinghai Zhongxin Guoan Lianyungang Development Co., Ltd. from Qinghai Zhongxin Guoan Science and Technology Development Co., Ltd. for non-public issuance of shares. Both parties initially determine the transaction price as About 2.7 billion yuan. In this transaction, Sino-Portuguese shares are the salt lake resources behind the Guo'an Lithium Industry and have unique advantages in the development of lithium carbonate business. Sino-Portuguese shares believe that lithium carbonate has great potential for future development. The acquisition of Guoan Lithium will help Sino-Portuguese shares to rapidly enter the battery-grade lithium carbonate production industry and improve the company's asset quality and profitability. Not only these companies, but also Minmetals Salt Lake, Lanke Lithium, Lubei Chemical and other companies, have also launched their own lithium carbonate project, is expected to start production in 2018. Companies such as Dow Technology, Huayou Cobalt, Yongxing Special Steel, and Waterma will focus on the upstream lithium-ion resources industry and pave the way for the development of the lithium carbonate business. As the global power battery leading enterprise Ningde era and BYD's deployment of upstream resources earlier, fully demonstrates the forward-looking concept and advanced strategic thinking of benchmarking companies. As early as 2012, Ningde established a subsidiary Qinghai Times New Energy in Xining and plans to invest RMB 7.5 billion to build a 5GWh power lithium battery and energy storage lithium battery project base, which will be completed in three phases within 10 years. In January 2014, the first production line with a capacity of 460 MWh was put into production. Huang Shilin, deputy chairman of Ningde Times, stated that in the Ningde era, the deployment of power batteries and energy storage batteries in Qinghai was due to its resources and market advantages. On October 24, 2016, BYD announced that it will jointly invest RMB 500 million in the upstream lithium carbonate project with Qinghai Salt Lake Co., Ltd. and Premier Investments, and build a lithium carbonate project with an annual output of 30,000 tons. At the same time, Qinghai Salt Lake Co., Ltd. also promised to transfer its 51.42% stake in Qinghai Salt Lake Fozhao Lanke Lithium to its joint venture company. The total capacity will reach 40,000 tons by the end of 2017. On October 29, 2016, BYD, Qinghai, produced an annual output of 10GWh power lithium battery project and an annual output of 20,000 tons of power battery material production and recycling projects in Xining. According to Liu Weiping, a BYD CTO, the first phase of the Qinghai 10GWh power lithium battery project is expected to be put into operation in the second half of 2017. The project can produce lithium iron phosphate and ternary batteries. The actual production and product ratio will be produced according to market demand. In November 2016, BYD's annual output of 6,000 tons of lithium hexafluorophosphate supporting project settled in Xining, Qinghai. The project is a supporting project of BYD's investment in the construction of a 10GWH lithium battery in Qinghai. It will be constructed in three phases with a total investment of 100 million yuan. He Long, vice president of BYD, recently stated that BYD Xining Base was laid at the end of 2016 and it is expected that the delivery room will be completed by the end of 2017 and will be put into production in June 2018. Cross-border cross-border and near-attack "enclosure" does not stop In fact, according to observations and analysis, with lithium carbonate as an example, companies that simply do lithium carbonate have generally low revenue and profit margins. For example, Yahua Group’s revenue for the first half of 2017 was RMB 1.028 billion. The profit was 127 million yuan, and the net profit margin was only 12%; the lithium industry's revenue for the first half of 2017 was 377 million yuan, and its net profit was 92 million yuan, with a net profit rate of 24.4%. The reason for the higher revenue and gross margin of Tianqi Lithium and Lifan Lithium is far higher than that of other Lithium Carbonate companies because the two companies are in possession of rich upstream lithium resources and have absolute The right to speak makes it easier to control costs and prices. In particular, it is worth noting that the trend of the power battery technology line is changing, and the resulting trend of explosive growth of the three-cell battery market will become more apparent. According to the country's domestic power battery technology route plan, by 2020, the annual production and sales of new energy vehicles will reach 2 million units, and the specific energy of the battery cells will reach 300 watt-hour/kg or more, and they will strive to achieve 350 watt-hour/kg. It reached 260 watt-hours/kg and the cost dropped below 1 yuan/Wh. Contrary to the characteristics of cathode materials, the energy density of lithium iron phosphate batteries is currently close to its theoretical value, and it is difficult to achieve the planning goals. However, the high nickel ternary can handle this task. The industry expects the demand for Sanyuan Power Battery will increase significantly in the next 2-3 years. According to the data of the China Nonferrous Metals Industry Association’s cobalt industry branch, in 2017 China’s Sanyuan Power Battery accounted for 50% of new energy vehicle equipment, led nickel consumption of 11200 tons, and cobalt consumption of 4800 tons; it is expected that by 2020, China’s ternary Power batteries account for 80% of new energy automotive equipment, driving nickel consumption by 67,000 tons, and cobalt consumption by 19,000 tons. At present, the mainstream manufacturers including lithium iron phosphate batteries such as BYD, Ningde, Guoxuan Hi-Tech, and Waterma all began to switch to the ternary. At the end of 2016, BYD Secretary General Li Wei had publicly revealed that BYD will expand its ternary lithium battery layout in the future. In 2016, BYD expects to have a battery capacity of 10 GWh. In 2017, it will add 3-6 GW of ternary batteries. From the three-year temporary suspension in 2016 to the present three yuan, the industry chain continues to increase its dependence on nickel, cobalt, lithium and other mineral resources. However, nickel, cobalt, lithium and other mineral resources are concentrated overseas. More than 50% of the three mineral resources need to rely on imports, especially in 2017, when many nickel mines in the Philippines were shut down and production was reduced, which exacerbated the market gap. At the same time, the domestic lithium mineral resources are abundant but the lithium extraction technology has been stagnating. There is no major breakthrough. The existing production capacity cannot fill the gap in the power battery market. In short, domestic nickel, cobalt, and lithium mineral resources are slightly inferior to overseas products in terms of technology, cost, and grade. Therefore, there is no doubt that overseas "mine warfare" is inevitable. In early July 2017, it was reported that the mining giant Glencore and Ningde have signed a major agreement, the former will sell 20,000 tons of cobalt products to the latter. Since October 2016, Glencore has signed a four-year supply agreement with Ningde. Some industry insiders believe that Glencore, Volkswagen and Ningde will form a triangular deal, Glencore will sell 20,000 tons of cobalt products to Ningde, and the public will purchase batteries from the Ningde era. On August 30, 2017, Assun Technology signed the "Product Acquisition Agreement" with Scandium 21 Pty Ltd, a wholly-owned subsidiary of Australian Telecommunications Corporation listed company Clean TeQ Holdings Limited ("CleanTeQ"). According to the agreement, the two parties will cooperate in product acquisition on the Syerston project. On June 20, 2017, Tianqi Lithium announced that the company plans to expand the capacity of lithium hydroxide of the battery grade again and start the second phase of the annual output of 24,000 tons of battery-grade lithium hydroxide monohydrate project. The total investment is expected to not exceed 317 million yuan. The Australian dollar (approximately RMB 1.626 billion) has a construction period of 22 months. At present, Tianqi Lithium has four major mineral resources, including the Telison Greenspan Mine (51% stake), Saares Salt Lake, Shigatse Zabuye, and Zolla Lithosite, with the largest amount of resources in the country. And Junfeng Lithium now owns the Heyuan Spodumene Mine in China, the Mariana Distiller Mine in Argentina, Blackstairs in Ireland and Montmarion in Australia. In May 2017, it agreed to invest in Lithium Mine Development Project of Pilbara Minerals. At the same time, the lithium project of the lithium-ion industry overseas invested by Junfeng also laid out the United States. The Shengsheng Technology Notice disclosed that the Syerston project is one of the cobalt-nickel-cobalt mines in the world with a high cobalt content. At the same time, the mine has abundant resources of antimony and manganese. The project is located west of Sydney, Australia and has obtained permission approvals for resource development, environment, and water use. CleanTeQ holds 100% interest in the Syerston project. In summary, the analysis of the New Energy Automotive Network believes that extending the industrial chain, controlling stable and high-quality upstream resources, breaking through production and raw material restrictions, and enhancing core competitive advantages have become the expansion of the scale of new energy vehicles and power battery industry chain enterprises. To improve quality, to win the market, and to control the right to speak. In the future, companies or institutions that are good at integrating resources will win and continue to lead the market.