Guotai Haitong: The overall production of Chinese salt lakes will continue to increase, and it is expected that salt lake resources will gradually concentrate towards large companies.

Guotai Haitong's research report stated that starting in 2025, Tibet's salt lakes will gradually increase production, with Mamico and Lago starting production and output gradually increasing. In the later stages, Tibet has reserves such as Jiezhe Chaka and Longmu Cuo ready for production, along with the incremental output from Qinghai, the overall production of China's salt lakes will continue to rise. In terms of capital expenditure, based on publicly disclosed data from various companies, the investment in lithium salt production from South American salt lakes is over 1.5 billion RMB, requiring large companies with investment capabilities. The lithium resources in salt lakes will gradually consolidate towards large companies. Guotai Haitong's main points are as follows: Salt Lakes: The lowest cost lithium extraction process, with room for further technological advancements The production of lithium salts mainly involves three process routes: salt lake extraction, lithium pegmatite extraction, and lithium mica extraction. Among them, the salt lake extraction route is the lowest cost due to its relatively simple process and high-value by-products. According to calculations by various companies, by 2024, the cost of lithium carbonate production for salt lake companies is between 30,000-48,000 RMB per ton, while it is 80,000 RMB per ton for lithium pegmatite companies. The cost for lithium mica companies is also around 80,000 RMB per ton. Salt lake extraction companies are positioned on the left side of the overall cost curve. With continuous technological advancements in salt lake extraction, new lithium extraction agents have been developed by the Qinghai Salt Lake Research Institute, which can effectively reduce costs. It is recommended to invest in Zangge Mining (000408.SZ) and related stocks such as Qinghai Yanhu Industry (000792.SZ). The Rise of Chinese Salt Lakes as an important member of the lithium supply China's current salt lake lithium extraction capacity is mainly concentrated in Qinghai Province, with listed companies such as Qinghai Yanhu Industry, Zangge Mining, and Ganfeng Lithium Group leading the industry. The main projects are Chahar Han Salt Lake and Yiliping Salt Lake, as well as East and West Taijinai Salt Lakes and Dachaidan Salt Lake. Starting in 2025, Tibet's salt lakes will gradually increase production, with Mamico and Lago starting production and output gradually increasing. In the later stages, Tibet has reserves such as Jiezhe Chaka and Longmu Cuo ready for production. With the addition of incremental output from Qinghai, the overall production of Chinese salt lakes will continue to rise. According to estimates, by 2030, China's salt lake production will reach 500,000 tons, becoming an important part of the global lithium salt supply. Continuous contribution of incremental output from South American salt lakes, with Argentina contributing the most South American salt lakes are an important source of global salt lake production, with the Atacama salt lake being a major mining area in South America, producing approximately 400,000 tons of lithium carbonate per year. With the commissioning of projects such as Mariana, 3Q, and Sal de Vida in Argentina, the incremental output of lithium extraction from South American salt lakes will mainly come from Argentina. Bolivia's lithium resources are abundant, and it is expected to gradually contribute to incremental output in the future. Large capital expenditure, expected consolidation of salt lake resources towards large companies Unlike the shorter new construction and smelting cycle of hard lithium salts, the construction cycle of salt lake extraction projects is longer, with a production period of around 3.5 years in China and 5 years in South America. According to publicly disclosed data from various companies, the investment in 1,000 tons of lithium salt from South American salt lakes is over 1.5 billion RMB, requiring large companies with investment capabilities. Salt lake lithium resources will gradually consolidate towards larger companies. Risk Alert Risks of significant fluctuations in demand for lithium carbonate and risks of project commissioning falling short of expectations.