Tianqi Lithium's turnaround to profitability by 2025: cost optimization, capacity deployment, and key materials technology for all-solid-state batteries

In 2025, the global lithium industry underwent a profound rebalancing amid cyclical fluctuations. Against the backdrop of lithium product prices bottoming out and rebounding, and the industry generally facing pressure, Tianqi Lithium delivered an impressive performance. According to its annual report data, in 2025 the company achieved operating revenue of RMB 10.346 billion and attributable net profit of RMB 463 million, representing a substantial year-on-year increase of 105.85%, successfully turning around from losses to profits.

In this regard, Tianqi Lithium (002466.SZ) stated that optimization of the lithium-ore pricing mechanism weakened the impact of mismatches between costs and selling prices. The recovery in the performance of the associate SQM contributed incremental investment gains. The year-on-year sharp narrowing of asset impairment losses, together with foreign-exchange gains driven by the strengthening of the Australian dollar, collectively supported the restoration of performance.

Meanwhile, the company continued to push forward on the capacity front. The third chemical-grade lithium concentrate plant at the Greenbush lithium ore spodumene mine in Australia was completed as scheduled, lifting total capacity to 2.14 million tons per year. The 30,000-ton per year project for lithium hydroxide in Zhangjiagang, Jiangsu was successfully put into operation, and the 1,000-ton per year metallic lithium project in Chongqing Tongliang was progressing steadily. It is worth noting that the pilot project for 50 tons per year of lithium sulfide commenced construction, signaling that the company has seized a first-mover advantage in the key materials area for solid-state batteries.

Optimization of the lithium-ore pricing mechanism improves the cost structure

In 2025, Tianqi Lithium’s performance showed a distinctive “anti-cyclical” characteristic: although the selling prices of its lithium chemical products fell compared with the same period of the previous year, the company’s attributable net profit still increased by 105.85%. Behind this phenomenon, the most core factor is the improvement in the cost structure brought by optimization of the lithium-ore pricing mechanism.

In recent years, the pricing cycle of Tianqi’s controlling subsidiary Talison’s chemical-grade lithium concentrate did not match the timing of the company’s selling price cycle for its lithium chemical products, leading to delays in the transmission of costs to selling prices. But in 2025, thanks to the shortened pricing cycle of the controlling subsidiary Wafeirfield’s lithium mine, the time gap between Talison’s chemical-grade lithium concentrate pricing mechanism and the company’s lithium chemical products’ selling price mechanism was significantly compressed.

At the same time, as newly purchased domestic lithium concentrate continued to enter the inventory and the inventory lithium concentrate was gradually consumed, the chemical-grade lithium concentrate cost used in production at Tianqi Lithium’s lithium chemical product production bases had essentially come in line with the latest purchase prices. This means the company achieved dynamic optimization of costs and avoided the predicament of profit being eroded by high-priced inventory.

Looking at performance by quarter, Tianqi Lithium’s 2025 results showed a quarter-by-quarter recovery trend. In the fourth quarter alone, it reported attributable net profit of RMB 283 million, accounting for more than 61% of the total full-year profit, becoming a pillar driving the full-year turnaround in performance, with the profitability trend continuing to improve.

In addition, the recovery in the performance of the associate SQM contributed an important incremental amount to investment income. As the second-largest shareholder of SQM, Tianqi Lithium’s investment gains from this associate increased significantly compared with FY2024, becoming one of the driving forces behind the improvement in performance.

Tianqi Lithium also noted that since 2025, the Australian dollar has continued to strengthen. Changes in the AUD/USD exchange rate during the reporting period led to an increase in foreign-exchange gains by an amount compared with FY2024, which also provided support for the restoration of performance.

It is worth noting that, in terms of asset quality, in 2025 the asset impairment losses recognized by Tianqi Lithium were significantly reduced compared with 2024, further improving profit quality. Meanwhile, as of the end of 2025, the company’s asset-liability ratio was 28.04%, remaining at a reasonably low level; net cash flows from operating activities reached RMB 2.961 billion, with ample cash reserves.

The pilot project for 50 tons per year of lithium sulfide starts

Upstream resources are the core barrier in the lithium industry, and midstream capacity is the key support for large-scale deployment.

On the resource side, Tianqi Lithium controls the world’s highest-quality lithium resource assets. Its controlling Australian Greenbush spodumene mine is the largest and most cost-effective in-operation hard-rock lithium mine globally. By the end of 2025, the mine’s total resources equate to approximately 18 million tons of lithium carbonate equivalent, reserves equate to approximately 8.2 million tons of lithium carbonate equivalent, and its average lithium oxide grade is 1.9%.

In December 2025, the mine completed construction of the third chemical-grade lithium concentrate plant. The built capacity of lithium concentrate increased from 1.62 million tons per year to 2.14 million tons per year. In full-year production, it produced 1.35 million tons of lithium concentrate, including 1.30 million tons of chemical-grade lithium concentrate. Its total output accounts for 18.9% of the total global hard-rock lithium concentrate output.

In the domestic resources segment, the controlling Sichuan Yajiang Cuozha spodumene mine of Tianqi Lithium is located in Asia’s largest methylcarb lithium mine area. Its resource量 equates to 0.6324 million tons of lithium carbonate equivalent, with a grade of 1.30%. In 2025, infrastructure construction and exploration were continuously advanced. Cumulative drilling footage reached 20,689 meters. Reserve expansion work was steadily carried out. Once completed, it will form dual resource assurance domestically and internationally with the Greenbush mine, further improving resource self-sufficiency.

On the processing side, Tianqi Lithium has deployed six production bases worldwide, covering all product categories, including battery-grade lithium carbonate, lithium hydroxide, metallic lithium, and more. In July 2025, the Jiangsu Zhangjiagang annual 30,000-ton battery-grade lithium hydroxide project was completed and, on October 17 of the same year, all parameters were confirmed to meet battery-grade lithium hydroxide standards. This production line is capable of flexible adjustment and can produce lithium hydroxide or lithium carbonate products according to market demand.

At the same time, the expansion project of Chongqing Tongliang for 1,000 tons per year of metallic lithium and supporting feedstock is also being pushed forward with full effort. The Phase I lithium hydroxide project in Australia’s Qunnana continues ramping up. By the end of 2025, Tianqi Lithium had built lithium chemical product capacity of approximately 121,600 tons per year, and with planned capacity included, total capacity amounts to 122,600 tons per year.

It is worth noting that, in November 2025, at the Second China International Lithium Industry Conference, Tianqi Lithium released a new solid-state battery key material—lithium sulfide. Lithium sulfide is a key precursor for sulfide-based solid-state electrolytes, and its industrialization progress directly relates to the commercialization process of solid-state batteries. The company also announced that its 50-ton-per-year lithium sulfide pilot project has been substantially implemented and started, using newly developed lithium sulfide preparation technologies and equipment developed independently. The project is capable of low-risk, rapid mass production.

According to the introduction, in research on next-generation battery materials, Tianqi Lithium has achieved multiple breakthroughs: it developed a high-energy-density ultra-thin metal lithium preparation technology, enabling roll-to-roll production with a 300mm-wide format. For issues such as dendrites in the anode, it developed a lithium-magnesium alloy system that improves cycling performance by multiple times, and it has entered cell-level application verification. Lithium-rich manganese-based materials have completed structural design and laboratory-sample preparation, and are currently undergoing kilogram-level scale-up verification.

These technology reserves cover key battery material areas such as anode, cathode, and electrolytes, demonstrating Tianqi Lithium’s deep expansion capability in the lithium industry chain—from supplying basic materials to developing core functional materials. Supporting these breakthroughs is the company’s increasingly完善 research and development system.

As of the end of 2025, Tianqi Lithium had 313 authorized patents, including 141 invention patents. It published 86 high-level papers, of which 56 were indexed in SCI/EI. The number of research and development personnel increased by 31.37% year-on-year, including 14 high-quality professionals with master’s degrees or above.

In March 2025, Tianqi Lithium’s Innovation Laboratory and Research Institute, which the company invested in to build, was officially completed and put into operation. It focuses on four core areas: breakthrough research on key materials for next-generation high-performance lithium batteries, comprehensive utilization of mineral resources, new lithium-extraction technologies, and battery recycling. At the same time, the company is actively preparing to establish a research and development center in Hong Kong, China, to integrate global R&D resources.

Governance and sustainable development capabilities support long-term value

Tianqi Lithium’s 2025 annual report also reveals a signal: the company’s governance and sustainable development capabilities are becoming an important support for its long-term value. The company’s MSCI rating improved from BBB to A, and it was selected in the S&P Global “Sustainability Yearbook (China Edition)” for two consecutive years. In addition, according to the 2024 rating results published by the Global Environmental Information Research Center (CDP), the company received a B grade in both its climate change questionnaire and its water security questionnaire.

Optimization of the governance structure is the foundation. In Tianqi Lithium’s board of directors, the proportion of independent directors and female members is no less than 50%. Members’ backgrounds span multiple professional areas, including the lithium industry, corporate governance, finance/accounting, risk management, ESG, strategy, and more. The company’s five specialized committees under the board are each chaired by independent directors. The chair of the Audit and Risk Committee is a finance expert.

In 2025, Tianqi Lithium, in accordance with relevant requirements, revised or added 47 governance-related systems, further improving the governance framework. With these outstanding practices, the company was selected for China’s listed companies association’s 2025 annual board of directors best practice case, and received the 20th “Golden Round Table Award” for Best Board of Directors from the magazine “Board of Directors.”

At the execution level of its sustainable development strategy, Tianqi Lithium has built an ESG governance structure with the board of directors as the highest-responsibility body, with clearly defined authority and responsibilities and distinct division of work. An ESG and Sustainable Development Committee under the board is responsible for formulating and reviewing strategies, targets, and strategies related to sustainable development.

In 2025, Tianqi Lithium incorporated EHS indicators into the key performance indicator system for the company’s management, departments, and each production base and project. The performance evaluation indicators for senior management and management teams are linked to ESG and EHS indicators, achieving 100% linkage between senior management compensation and ESG performance with dynamic monitoring.

Looking ahead to 2026, Tianqi Lithium will closely follow the core pathway of “strengthening the upstream, building a stronger midstream, and penetrating the downstream,” and will continue to advance global deployment and high-quality development. In particular, in the field of comprehensive utilization of mineral resources, it will continue to promote the industrialized application of turnkey technology solutions for producing high-quality silicon-aluminum micro-powder from lithium slag. In the field of new lithium-extraction technologies, it will accelerate the development of direct lithium-extraction processes for liquid lithium resources such as salt lakes and underground brines. In the field of next-generation battery new materials, it will advance lithium sulfide quality upgrading and production line construction, complete product sampling and application verification for metallic lithium anode materials. In the battery recycling field, it will selectively carry out related businesses and strengthen technical reserves.

In February 2026, Tianqi Lithium completed the new H-share placement and the issuance of convertible bonds, obtaining net proceeds of approximately HKD 5.8 billion, to support the company’s strategic development in the lithium sector, including capital expenditures required for project development and optimization, as well as acquisitions of high-quality lithium mineral resource assets. The completion of this financing provides ample funding assurance for the company’s strategic layout during industry cycles.