Tianqi Lithium — Lithium Cycle

Tianqi Lithium is one of China's two dominant lithium companies — controlling the world's highest-grade hard-rock lithium mine (Greenbushes in Australia, 26% stake alongside Albemarle) and operating lithium hydroxide and carbonate processing at Kwinana (Australia) and Shehong (China). Tianqi is a pure-play lithium company with exceptional upstream quality, making it one of the most direct investment expressions of the global lithium price cycle.

Greenbushes: The World's Best Lithium Mine

Tianqi's 26% stake in Greenbushes — the world's largest and highest-grade lithium spodumene mine, operated by Albemarle — is the company's crown jewel. Greenbushes' ore grade (approximately 2.5% Li2O) is far above the industry average of 0.8–1.5%, providing structural cost advantages. When lithium prices are high, Greenbushes generates cash flows that dwarf its cost of production.

Lithium Price Cycle: The Extreme Volatility Signal

Lithium carbonate prices are among the most volatile commodity prices globally — ranging from RMB 35,000/t (2020) to RMB 597,500/t (November 2022) and back to below RMB 80,000/t (2024). This 17x price swing in 2 years illustrates why lithium cycle timing is critical. Tianqi's earnings swing from deep losses at $RMB 80,000/t to exceptional profits at RMB 300,000+/t.

SQM Stake: Chilean Brine Exposure

Tianqi holds approximately 22% of SQM — Chile's largest lithium producer and the world's lowest-cost lithium source from Atacama brine. This stake provides exposure to a completely different production technology (brine vs hard-rock), geographic diversification and dividend income from SQM's extraordinary profitability during lithium price peaks.

EV Demand: The Structural Demand Driver

Global electric vehicle sales — growing from 3M units in 2020 to 15M+ in 2024 — are the primary structural demand driver for lithium. Each EV battery requires 5–10 kg of lithium carbonate equivalent. As EV adoption accelerates in China, Europe and the US, lithium demand grows structurally regardless of short-term price cycles. Tianqi's exposure to the world's highest-grade resources positions it for the long-run demand growth story.

Key Risks

Lithium price cycles are extreme — the 2022–2024 price collapse from RMB 600,000 to below RMB 80,000/t caused massive earnings swings. New lithium supply from Argentina, Chile and Australia is rapidly expanding, creating periodic oversupply. LFP battery chemistry using no cobalt and less lithium per kWh is gaining market share versus NMC, moderating per-vehicle lithium demand growth.

Cycle Performance Summary