The Pacific Securities: The lepidolite industry continues to upgrade; pay attention to long-term opportunities in the industry chain.

The Pacific Securities released a research report stating that China has abundant lepidolite reserves with clear distribution across production areas, making it a core domestic raw material for ensuring self-sufficient lithium resource supply. Resources are concentrated in Yichun, Jiangxi, with large mineral belts successively discovered in Hunan, Sichuan, and Inner Mongolia. The industry's inclusion in strategic mineral regulation, combined with mine rectification, means the supply-demand pattern is likely to remain tight in the short term, while in the medium to long term, competitive advantages will shift toward leading companies with resource advantages and integrated operations. Lepidolite lithium extraction processes are diverse, with low-carbon comprehensive recovery being the main line of long-term technological upgrading. The main viewpoints of The Pacific Securities are as follows: China has abundant lepidolite reserves with clear distribution across production areas, making it a core domestic raw material for ensuring self-sufficient lithium resource supply. Resources are concentrated in Yichun, Jiangxi, with large mineral belts successively discovered in Hunan, Sichuan, and Inner Mongolia. The industry's inclusion in strategic mineral regulation, combined with mine rectification, means the supply-demand pattern is likely to remain tight in the short term, while in the medium to long term, competitive advantages will shift toward leading companies with resource advantages and integrated operations. Lepidolite lithium extraction processes are diverse, with low-carbon comprehensive recovery being the main line of long-term technological upgrading. Sulfate roasting is currently the mainstream mature mass-production method. Various new low-carbon lithium extraction technologies have promising prospects, but have not yet achieved large-scale industrialization due to equipment and cost constraints. The development of low-grade lepidolite offers advantages in multiple aspects. These include high resource self-sufficiency, significant comprehensive utilization value of associated rare metals, well-established localized industry chain supporting facilities, and strong policy support. It is an important path for ensuring China's lithium resource security and hedging against overseas supply chain fluctuations. However, the development process also faces many challenges, such as large fluctuations in ore grade, low beneficiation recovery rates, high pressure from environmental protection and solid waste disposal, increasingly strict mining approvals, and risks from lithium price cyclical fluctuations. Related companies in the industry chain 1) High process flexibility: Companies that improve the cost-effectiveness of lithium carbonate processing through methods such as sulfate roasting, and broaden profit margins by relying on associated metal recovery, such as Dazhong Mining, Yongxing Special Materials Technology, Hunan Corun New Energy, etc.; 2) Mining-metallurgy integration + resource certainty: Companies that have established a full chain from mining to lithium extraction to battery supporting facilities, focus on self-owned compliant lepidolite mines, and lock in cost advantages through raw material self-sufficiency, such as Contemporary Amperex Technology, Ganfeng Lithium Group, Gotion High-tech, etc. Risk warnings: Lithium price fluctuation risk, raw ore cost increase risk, tightening environmental protection policy risk, technology iteration falling short of expectations risk, resource extraction restriction risk, downstream demand weakness risk.