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1 Certain information and statistics set out in this section and elsewhere in this document relating to the industry in which we operate are derived from the Roskill Report prepared by Roskill, an experienced independent consultant with over 4 years of covering the metal markets including 15 editions of a report published on the lithium industry. Roskill was commissioned by us and paid a total of US$14,8 in fees for this service. The information extracted from the Roskill Report should not be considered as a basis for investments in our H Shares or as an opinion of Roskill as to the value of any securities or the advisability of investing in our Company. Roskill prepared the Roskill Report based on its in-house database, data from reputable industry and trade organizations reports, official national statistics and other reliable international sources. 1 We believe that the sources of such information and statistics are appropriate for such information and statistics and have taken reasonable care in extracting, compilation and reproducing such information and statistics. We have no reason to believe that such information and statistics are false or misleading or that any fact has been omitted that would render such information and statistics false or misleading in any material respect. Our Directors have further confirmed, after making reasonable enquiries and exercising reasonable care, that there is no adverse change in the market information since the date of publication of the information in this section. No independent verification has been carried out on such information and statistics by us, the [Joint Sponsors, [REDACTED], [REDACTED], [REDACTED]] or any other parties involved in the [REDACTED] or their respective directors, officers, employees, advisers, or agents, and no representation is given as to the accuracy or completeness of such information and statistics. Unless and except for otherwise specified, the information and data presented in this Industry Overview is derived from the Roskill Report. OVERVIEW OF LITHIUM INDUSTRY is the lightest and least dense solid element in the periodic table. In its metallic form, lithium is a soft silvery-gray metal with good heat and electric conductivity. As a result of its reactive properties, lithium does not occur naturally in its pure elemental metallic form, instead occurring within minerals and salts. After being extracted from minerals or brines, lithium can be converted into various compounds and derivatives which are ready for commercial applications, such as lithium carbonate, lithium hydroxide and lithium metal. 1 Roskill s research and forecasting methodology integrates several techniques with measurement-based system and relies on expertise of the analyst team in integrating the critical market elements, including (1) expert-opinion forecasting methodology; (2) integration of market drivers and restraints; (3) integration with the market challenges and trends; and (4) integration of econometric variables. In compiling the Roskill Report, Roskill has adopted the following assumptions: (1) the social, economic and political environment in the forecast period; and (2) related key industry drivers likely to take place in the forecast period. The Roskill Report was mainly prepared by five analysts with extensive relevant experience and supported by Roskill s in-house research team. 89

2 Overview of Mine-to-Product Flow Glass & Ceramics Mineral Mineral Concentrate Hydroxide Rechargeable Battery Carbonate Greases Brine Brine Concentrate Polymer Metallurgical Powders Chloride Metal Primary Battery Air Treatment Other Mining Compounds and Derivatives End User Markets Mineral Based Flow Brine Based Flow Mineral and Brine Based Flow Products for End Use Markets Tianqi is Participating Source: adapted from the Roskill Report is used in a wide range of industries, including batteries, ceramics, glass, greases, metallurgical powders, and air treatment. In recent years, growth in lithium consumption has been mainly driven by the rechargeable battery market, used in both portable consumer electronics as well as rechargeable batteries for automotive electrification. The strong growth is mainly due to lithium being the lightest material with the highest electrochemical potential enabling a very high energy and power density. Therefore, lithium has become one of the most ideal materials in high performance batteries. As measured by sales revenue in 217, the largest lithium producers are (1) Albemarle Corporation ( Albemarle ), (2) Tianqi, (3) Jiangxi Ganfeng Co., Ltd ( Ganfeng ), (4) SQM and (5) FMC Corporation ( FMC ). Revenue by Company (217, US$MM) 1,2 8 1, Albemarle Tianqi Ganfeng SQM FMC 9

3 LITHIUM RESERVES Occurrence of The two commercial sources of lithium extraction currently are lithium pegmatites and continental lithium brines. Pegmatites, also referred as hard rock occurrences, produce lithium ores including spodumene, petalite, lepidolite and amblygonite (together Minerals ). Through beneficiation, Minerals are processed into concentrated products for direct consumption or used as raw materials for on-ward conversion and manufacturing of lithium compounds and derivatives. -bearing brines ( Brines ) occur in salars, or dried salt lakes. Brines are pumped to the surface and typically undergo solar evaporation, ion-exchange or other upgrading technique to produce a concentrated lithium brine concentrate of 3.-6.% Li content, which can be processed further into lithium compounds. Reserves Breakdown by Country According to the United States Geological Survey, the majority of lithium reserves are located in Chile, China, Australia and Argentina, which accounted for 48%, 21%, 17%, and 13% of the total amount of reserves in the world, respectively. Reserves Breakdown by Type Minerals According to the Roskill Report, the Greenbushes Mine, operated by our subsidiary Talison, is the largest hard rock lithium mine in the world as measured by size of resources and reserves and has the highest grade of lithium ore. As of March 31, 218 the total reserve of the Greenbushes Mine s Central Lode amounted to approximately 6.9 million tons LCE, which had a lithium oxide grade of approximately 2.1%. In comparison, the majority of hard rock mines in operation, near-term producers and advanced projects have mineral reserves that are smaller than 1. million tons LCE and have lithium oxides grades of.9-1.5%. Mineral Reserves (217) 3% Grade (% Li2O) 2% 1% Galaxy Mt Cattlin Bikita Minerals Bikita Talison Greenbushes - TSF1 Premier African Mins Zulu Nemaska Whabouchi Altura Pilgangoora CATL Val d'or Pilbara Pilgangoora Mineral Resources Wodgina Talison Greenbushes - Central Lode Tawana Bald Hill Yichun TaNb Yichun % Contained LCE (Mt) 91

4 Brines SQM s Salar de Atacama has 42.9 million tons LCE of lithium reserve, which is the world s largest brine reserve. Salar de Atacama s 1,84ppm lithium grade is also the highest among all brinebased operations. In comparison, the majority of brine-based operations, near-term producers and advanced projects have brine resources of 1 million to 7 million tons LCE and grade between 3 and 1,ppm lithium. 2, Brines Resources (217) SQM Salar de Atacama 1,5 LSC Rio Grande Grade (ppm Li) 1, 5. FMC Salar del Hombre Muerto Eramet Cuenca Albemarle Silver Peak Galaxy Sal de Vida Orocobre Salar de Olaroz 1. LAC/SQM Cauchari Enirgi Salar del Rincon Albemarle Antofalla 2. Qinghai Salt Lake Chaerhan International Mariana Contained LCE (Mt) Note: Few lithium brines players report reserves, except for SQM Salar de Atacama, which in the above chart is shown on a reserves basis LITHIUM MINE SUPPLY mine supply refers to all production from both Minerals and Brines. Mine Key Operators The global lithium mine supply is dominated by six producers: (1) Talison in Australia; (2) SQM in Chile; (3) Reed Industrial Minerals (a Mineral Resources, Ganfeng and Neometals joint venture) in Australia; (4) Albemarle in Chile and the USA; (5) Galaxy Resources in Australia; and (6) FMC in Argentina. 92

5 China brine 4% Mine Supply by Operator (217, %) FMC 6% Orocobre 4% Other company 3% China mineral 6% Galaxy 7% Albemarle 1% Talison (51% owned by Tianqi) 29% SQM 16% Reed Industrial Minerals 15% Historical and Forecast Mine Supply Based on announced capacity expansions and new project schedules, the global lithium mine annual production capacity is forecast to increase to almost 1. million tons LCE by 22 and be close to 1.4 million tons LCE by 227, according to the Roskill Report. The largest additions to mine capacity will come from mineral-based production in Australia and brine-based production in Chile. 1,6 1,2 8 4 Historical and Forecast Mine Capacity ( , t LCE) 1,318 1,233 1, ,31 1, ,371 1, A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E Existing and expanded Under construction Under evaluation 225E 226E 227E LITHIUM PRODUCTS SUPPLY products primarily include lithium compounds (including lithium carbonate, lithium hydroxide and other lithium chemicals), lithium metal, and technical-grade lithium concentrate. The supply of lithium products consists of output from brine-based production, mineral-based production and a small amount of recycling. Supply of Products by Companies The supply of lithium products is undertaken by a limited number of companies. Albemarle, SQM, Tianqi, Ganfeng and FMC are the leading market participants. Tianqi is the largest supplier of lithium compounds and derivatives in China and Asia and the third largest globally. 93

6 Products Supply by Company (217, %) Shandong Ruifu 3% Orocobre 4% China brine 5% FMC 7% Other 15% Albemarle 21% SQM 19% Ganfeng 1% Tianqi 16% Historical and Forecast Products Supply carbonate carbonate (Li 2 CO 3 ) is a fine white powder that can be produced directly from brines and minerals. The main applications of lithium carbonate include rechargeable batteries, ceramics, glass and metallurgy. According to the Roskill Report, in 217, the total volume of merchant sales of lithium carbonate is estimated to be 129,5 tons LCE, with battery-grade accounting for approximately 71% of the volume. Sales of battery-grade lithium carbonate surpassed industrial-grade in 29, and have continued to grow by 16.8% per year, compared to 2.3% per year for industrial grade, since 212. The volume of merchant sales of industrial-grade lithium carbonate is forecast to grow 3.1% per year and reach 5,85 tons LCE by 227. In contrast, the volume of merchant sales of batterygrade lithium carbonate is forecast to grow at 18.7% per year, primarily driven by anticipated increase in demand for lithium-ion batteries. Merchant Sales of Carbonate ( , t LCE) A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E Industrial-grade Battery-grade hydroxide hydroxide (LiOH) is a fine white power that may be directly recovered from spodumene concentrate or through conversion of lithium carbonate. Historically, the main application of lithium hydroxide has been in lithium grease. However, an increasing number of producers are planning to, or have begun to, manufacture battery-grade lithium hydroxide to be used in lithium-ion battery cathodes. According to the Roskill Report, the volume of merchant sales of lithium hydroxide is approximately 38,3 tons LCE in 217, with battery-grade lithium hydroxide accounting for around 94

7 51% of the volume. Merchant sales of battery-grade lithium hydroxide have increased at 17.6% per year from 212 to 217, due to the rapid growth in lithium-iron-phosphate and high-nickel mixed metal lithium-ion battery cathode materials. The volume of merchant sales of industrial-grade lithium hydroxide is forecast to grow at 5.5% per year from 217 to 31,875 tons LCE by 227, representing a recovery from a period of undersupply since 215. In contrast, battery-grade lithium hydroxide s merchant sales volume is forecast to grow at 43.2% per year from 217 to 711,t LCE by 227, driven by increased demand for high-nickel cathodes for lithium-ion batteries used in EVs. Merchant Sales of Hydroxide ( , t LCE) A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E Industrial-grade 81 Battery-grade Due to the expected increase in demand for higher performance battery cathode, battery-grade lithium hydroxide is expected to surpass battery-grade lithium carbonate and become the main product consumed in the rechargeable battery market by 224, if not sooner. The low impurities feature of mineral-based hydroxide, such as hydroxide produced by Tianqi, is particularly advantageous when selling to cathode manufacturers, compared to suppliers using brines to source lithium raw materials. metal metal can be produced through processing of lithium chloride. The Roskill Report estimated the merchant sales volume of lithium metal at 3,75 tons (or approximately 2, tons LCE) in 217, of which almost 5% was high-sodium, catalyst-grade lithium metal used for organolithium. A large proportion of this supply is produced from recycled lithium chloride feedstock from the catalyst industry. 25% of the sales volume in 217 was generated by low-sodium, battery-grade lithium metal used in primary batteries. The remaining 25% of the sales volume was used either directly as catalyst, a small portion of which is used lithium-ion battery anode, or for alloying and other uses. metal s merchant sales volume is forecast to grow at 5% per year from 217 to 227 and reach 6,131 tons (or approximately 32,6t LCE) by 227. Merchant Sales of Metal ( , t Li) 8, 6, 4, 2, 2,9 2,955 2,92 3, ,525 3,75 3,922 4,97 4,294 4,494 4,717 4, , , , , A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E 95

8 Technical Grade Concentrate Technical-grade lithium concentrates are largely consumed directly in ceramics, glass and metallurgical applications. Talison is the largest producer of technical-grade lithium concentrates. Supply of technical-grade mineral concentrate is forecast to increase by 3.2% per year and reach 51,4 tons LCE by 227. Merchant Sales of Technical-grade Mineral Concentrates ( , t LCE) A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E COST OF SUPPLY To receive an expanded production quota, Albemarle and SQM have agreed with the Chilean government on a new royalty rate of up to 4% when the product sale price exceeds US$1, per ton. As a result, a significant portion of brine-based production capacity will be operated at increased cash costs, drawing close to Talison s level cash cost from 218 and onwards. Cost Position Mine Supply Due to its large scale and high grade of lithium ore, the Greenbushes Mine is considered to have the lowest production cost for lithium concentrate among all lithium mining operations. Operating Costs for Mineral Concentrate Production (218, US$/t) 3 AMG - Mibra (Brazil) Pilbara - Pilgangoora (Australia) Altura - Pilgangoora (Australia) Galaxy Resources - Mt. Cattlin (Australia) Process Minerals - Mt. Marion (Australia) 2 Talison - Greenbushes (Australia) 1 5, 1, 15, 2, Capacity (tpy LCE) 25, Products Supply One cost advantage of mineral based production is that hard-rock feedstock can be converted directly into lithium hydroxide. Brine-based production, however, has to convert raw materials into lithium carbonate to produce lithium hydroxide. As a result, mineral-based hydroxide producers, such as Tianqi, have considerably lower processing cost compared with brine-based producers. 96

9 12, 9, 6, FMC (Argentina) Albemarle (USA) Orocobre (Argentina) Carbonate Cash Cost Curve (217, US$/t) SQM (Chile) Albemarle (Chile) Other (China - Brine) Tianqi (China) Albemarle (China) Ganfeng (China) Other (China - Mineral) 3, Cumulative Production (t) Notes: SQM and Albemarle costs in 217 shown above are adjusted for increased royalties in Chile from 218 and onwards 1, 7,5 5, Tianqi (Australia) (221) Hydroxide Cash Cost Curve (217, US$/t) FMC (USA + China) Tianqi (China) Albemarle (China) SQM (Chile & Russia) Albemarle (USA) Gangfeng/ Other (China) 2, Cumulative Production (t) Note: Tianqi (Australia) s figure refers to the forecast cash cost of its lithium hydroxide production when it is fully operational in 221. Cost Composition Production costs for refined lithium products vary primarily as a result of the differences between mineral-based production method and brine-based production method in producing lithium carbonate and lithium hydroxide. In the standard brine-based method to produce lithium carbonate, reagents represent 54% of production cash cost. In the standard acid-roast mineral-based method, reagents account for only 1% of cash costs and lithium concentrates account for 69% of production cash cost. Approximately eight tons of lithium concentrates are required to produce one ton of LCE. For mineral-based producers, a low-cost supply of lithium concentrate achieved through integration of lithium mining and lithium compounds manufacturing is essential to remaining competitive against brine-based producers. 97

10 Cash Cost Breakdown for Production (217, %) Mineral Conversion Brine Processing Utilities 9% Labour 6% Other 6% Labour 1% Other 12% Salt harvesting 16% Reagents 1% Utilities 8% Spodumene 69% Reagents 54% Source: Roskill, Hatch LITHIUM PRODUCTS DEMAND Consumption of lithium has shown strong growth since 2, increasing from just under 152, tons LCE in 212 to 224, tons LCE in 217, representing a increase of 8.1% per year during the period. The growth in consumption in recent years has been primarily driven by the rechargeable battery market. As measured by market share in 217, the five largest large-cell battery producers are CATL, Panasonic, LG Chem, BYD, and Optimum Nano. As measured by market share in 217, the ten largest cathode manufacturers globally are Shanshan, Sumitomo, TODA, BASF, STL Technology, Umicore, Nichia Corp, B&M, Reshine and Ecopro. Consumption of lithium by rechargeable batteries accounted 49% of total consumption in 217. Particularly, consumption of lithium by lithium-ion batteries has increased significantly because of rapid expansion in the portable consumer electronics sector through to 214 and a growing EV market, which is supported by favorable government mandates and EV manufacturer s roll out plans. Further technological advancement, together with the rise in installed renewable energy (wind and solar) capacity, has caused the use of lithium-ion batteries to be more widely used in grid / off-grid energy storage systems. consumption is estimated to reach 1.37 million tons LCE in 227, representing a sixfold increase or 19.8% growth per year from lithium consumption in 217. Growth in lithium consumption will, however, be relatively moderate in the near term, with a 18.9% growth per year from 217 to 222, before accelerating in the mid-22s. Consumption of lithium will continue to be driven by the new energy sectors, particularly the EV sector. consumption by rechargeable batteries is forecast to register a 27.2% growth per year between 217 and 227, reaching 1.22 million tons LCE in 227. China accounted for 43% of global lithium consumption in 217. There is considerable short and long term growth potential for lithium consumption if the new energy sector accelerates faster than is currently forecast. 98

11 Historical and Forecast Consumption of by First Use ( , t LCE) 1,4 1,367 1,2 1, , A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E Battery Other 226E 227E KEY END MARKETS FOR LITHIUM PRODUCTS Electric Vehicles Since 217, over a dozen countries have announced targets varying from the ban of new sales on diesel vehicles to requirements for full electrification. Many countries also implemented incentives for EV manufacturers and purchasers to boost the penetration rate of EVs. Mainstream EV types with large battery packs primarily include battery electric vehicles (BEVs), plug-in hybrid electric vehicles (PHEVs), fuel cell electric vehicles (FCEV), low speed electric vehicles (LSEVs). Sales volume of EVs is forecast to increase at 26.8% per year from 2.9 million units in 217 to 3.6 million units 227. Historical and Forecast Global Electric Vehicle Sales by Region ( , units) A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E China Japan Europe USA Rest of World The two largest EV markets as measured by sales volume in 217 are China and Europe, followed by Japan and US. Driven by the needs for environmental protection and industrial upgrades, the Chinese government has rolled out an ambitious plan on vehicle electrification through a series of industrial policies, such as government subsidies and EV credit schemes. As a result, China is forecast to remain the leading market for EVs, and the sales volume of passenger and commercial EVs in China is forecast to grow at 24.1% per year from 2.2 million units in 217 to 19. million units in

12 2 Historical and Forecast China Electric Vehicle Sales by Type ( , units) A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E PHEV FCEV BEV LSEV Energy Storage System Batteries are also used as Energy Storage Systems ( ESS ), which primarily include (1) Uninterruptible Power Systems ( UPS ) for telecommunication and other industries and (2) power systems for grid operators and off-grid generators to store electricity for both residential and commercial purposes. The later application is becoming more prevalent along with the strong momentum of off-grid residential and commercial demand. ESS smoothen out power fluctuations of weather-driven renewable sources such as solar and wind, thus preventing the disruptions to transmission grid. They also ensure stable power supply to industries, such as telecom towers, that are sensitive to electricity outage. The ESS battery market is expected to grow at 13.2% per year from 4.8GWh in 217 to 16.6GWh in 227, of which 9.4GWh will be attributed to lithium-ion technology. 1 Historical and Forecast -ion Battery Use in the Energy Storage Market ( , kwh) A 213A A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E Telecom & UPS Grid/utility Off-grid (residential) Off-grid (commercial) E 226E 227E 1

13 MARKET BALANCE Historical and Forecast Products Production and Consumption 1,5 ( , t LCE) 1,25 1, A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E Existing and Expansion Under Construction Under Evaluation Recycling Consumption Note: production forecasts are adjusted for risks of financing, construction and commissioning/ramp-up delays. It is estimated the global output of lithium products will reach just over.85 million tons LCE in 227, representing a 14.5% growth per year from 217; In the meantime, the demand for lithium products is expected to reach 1.37 million tons LCE, representing a 19.8% growth per year from 217. From 22 a market deficit is likely to be seen if no additional refining capacity is added to the current forecast. In such a rapidly growing market, customer purchases may surpass their actual consumption in order to secure raw materials in anticipation of a future supply shortage. This is especially common in the automotive market where there is a long lead time from raw material sourcing to the vehicle sale. As a result, a significant volume of supply will be required in the mid-22s in addition to the announced production expansion projects, in order to ultimately meet the longer-term growth in lithium consumption. LITHIUM PRICES Changes in lithium prices have generally followed changes in the underlying cost position of producers, with market balance having a shorter-term impact. prices can generally be considered elastic to changes in demand when supply has previously failed to keep pace. Prices of battery-grade lithium carbonate in China have fluctuated over the last decade with annual average prices moving from US$5,7 in 27 to US$7,7 in 215 and increased significantly to over US$19, per ton in 216. This was followed by a decline in the first quarter of 217 after which the prices have fluctuated. Prices of battery-grade lithium carbonate outside China have generally followed the similar trend, but the prices had been increasing more steadily from 214 and moving significantly higher in 217 and the first half of 218. Prices of battery-grade lithium hydroxide had traded at a premium to prices battery-grade lithium carbonate in the late-2s and the mid-21s because of the more limited number of suppliers, but the premium has narrowed as more suppliers entered the market. Prices of other lithium compounds and metal generally track the price of lithium carbonate, but all refined lithium products prices vary according to the supply and demand dynamics in each product type. 11

14 25, Average Yearly Contract and Spot Prices for Battery-grade Compounds ( , US$/t CIF) 2, 15, 1, 5, 212A 213A 214A 215A 216A 217A 218E 219E 22E 221E 222E 223E 224E 225E 226E 227E Carbonate: Contract Price Carbonate: Spot Price Hydroxide: Contract Price Hydroxide: Spot Price Note: Contract price is the average CIF prices of Japan, Korea, Taiwan and China (since 215) imports: spot price is the China CIF (excluding VAT) price reported by Asian Metal. BARRIERS OF ENTRY Existing and potential new producers of lithium products face a number of challenges: (1) in terms of production technology and know-how, fewer than twenty companies currently produce lithium compounds, and only six of them are capable of producing at a scale of more than 1, tons LCE per year; (2) in terms of product development, most lithium products are produced according to customer specification and thus require significant R&D capability to meet the customers needs. Particularly, battery-grade carbonate and hydroxide require finer particle size and stricter limits on impurities, which call for deeper expertise in manufacturing and quality control; (3) in terms of marketing, sales, logistics and support, lithium is a global business that requires a good logistics network and service capabilities for packing, loading, transporting and customs clearance. Most major producers have a dedicated sales force and can offer continuous logistics support to their customers; (4) in terms of customer accreditation, the process accesses a multitude of factors and can take up to a year and impact new producers ramp-up ability. Battery-related customers have even more stringent accreditation processes due to their stricter quality requirements; and (5) in terms of feedstock supply, new suppliers, especially mineral converters in China, commonly source feedstock from new mines in Australia. It is not unusual in the mining industry for issues to occur during ramp-up of new mines to impact the designed supply negatively. Inconsistency of feedstock quality may also lead to inconsistency of quality of lithium products making it difficult and time consuming for the producers to go through the downstream customer accreditation process. 12