This story appears in the November 2022 issue of Forbes Asia. Subscribe to Forbes Asia
This story is part of Forbes’ coverage of China’s Richest 2022. See the full list here.
Net profit at Jiang Weiping’s Tianqi Lithium soared about 1,174% in the third quarter on year to 5.65 billion yuan ($777 million), thanks to surging demand for lithium, a key metal for electric car batteries. It wasn’t enough, however, to offset a 17% fall in the founder’s net worth to $6.1 billion from a year ago on marketwide malaise.
The price of lithium carbonate is expected to average $68,000 a tonne this year, up 260% from 2021, as the shift to electric cars happens faster than expected and supply lags demand, according to New York-based analytics firm Fitch Solutions. In 2018, before the current boom in prices, Tianqi Lithium took a $3.5 billion loan from a group led by China Citic Bank to finance the $4.1 billion purchase of a 24% stake in Chilean lithium producer SQM. However, the price of the metal plunged as much as 50% right after the deal. Faced with dwindling revenue and debt repayments, Jiang raised funds through rights issues, negotiated with lenders to extend payment deadlines, and sold minority stakes in a lithium mine and processing plant in Western Australia for a total of $1.4 billion in cash.
This year, the Shenzhen- and Hong Kong-listed company raised HK$13.5 billion ($1.7 billion) in a secondary listing in Hong Kong, with more than 70% of the proceeds going to pare debt. It said in August that the Citic loan had been repaid.
Source: https://www.forbes.com/sites/ywang/2022/11/09/economic-headwinds-weigh-on-fortune-of-tianqi-lithium-founder/