Tianqi Lands Long-Term Order From LG Chem

published: 2019-09-20 17:30 | editor: | category: News

TLK, a wholly-owned subsidiary of Sichuan Tianqi Lithium Industries, has officially inked a long-term lithium-hydroxide supply contract with LG Chem; According to the contract, TLK will supply at least 15% of the output of its lithium hydroxide plant in Kwinana on an annual basis; the extra amount will be set via mutual negotiation, based on the needs of LG Chem.

The supply contract, which is set to last three years from 2020 through 2022, can officially be extended for an additional three years if the two parties can reach an agreement on the new price and supply amount before the end of September 30, 2022.

According to the company, the contract underscores a major step forward for its overseas marketing initiative. In the first half of 2019, TLK was able to successfully land annual and long term orders from major customers such as Ecopro and SKI. Its lithium carbonate and lithium metal were both able to pass Germany’s official TÜV Rheinland certification for auto quality control.

With a focus on the production of lithium concentrate and lithium chemicals, Tianqi has expanded its scale significantly in the recent years by taking over companies like Talison Lithium Pty Ltd. of Australia and acquiring a stake in SQM of Chile, which is another major lithium producer. With the help of the acquisitions, the company was able to transform itself from a lithium processing firm into a leading international lithium enterprise.

As one of the top 10 major lithium chemical producers in China, Tianqi’s total capacity for 2019 is expected to top 68,000 tons. Its major products, which include lithium carbonate, lithium hydroxide, lithium chloride, and lithium metal, will be supplied by the subsidiaries Shehong Tianqi, Jiangsu Tianqu, and Chongqing Tianqi.

In the first half of 2019, Tianqi Lithium Industries’s revenues  reached only 2.59 billion RMB, which is down by 21.28% from a year earlier; its consolidated net profit in the first half reached 193 million RMB. The sharp sales drop can be attributed to the high comparison base, which is a result of its higher prices in 2018, according to the company’s financial statement.

As of the end of June 2019, Tianqi has incurred a total debt of 32.238 billion RMB with interest, which is a sharp increase of 26.749 billion RMB over a year earlier. For the entire first half, the company’s financial expenses hit 1.01 billion RMB, an increase of around 878 million yuan compared to the 132 million from last year.

(Source: www.cbea.com)

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