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Because it is closely tied to the growth of the new energy industry, Ganfeng Lithium places a high value on securing lithium supply chains. We buy environmentally friendly products and include sustainability in our procurement process. To guide and regulate suppliers' behaviour in law-abiding operations, employment compliance, resource consumption, pollution control, health and safety, and business ethics, we developed the Code of Conduct for Suppliers. Ganfeng Lithium adheres to sustainability-oriented responsible supply chain decision-making, explores ways of shaping responsible supply chains, transfers corporate responsibility from the upstream to the downstream of the industry chain, mitigates social and environmental risks, and ensures that both industrial economic value and environmental value can be realized.
The Company updated the Due Diligence Management Control Procedures for Responsible Mineral Supply Chains and other documentation in 2021, headed by the Company’s Due Diligence Management Team for Responsible Supply Chains, and advanced the due diligence management of lithium supply chains. The Code of Conduct for Suppliers incorporates Ganfeng Lithium’s standards for suppliers to guide and regulate upstream lithium mine suppliers’ behaviour. It encourages them to adopt more environmental and social obligations. The OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Affected and High-Risk Areas, the Guidelines for Social Responsibility in Outbound Mining Investments, and the Chinese Due Diligence Guidelines for Responsible Mineral Supply Chains are used to manage the sustainability of lithium raw material supply chains. The Company has consistently followed the “five-step process” in due diligence management of lithium supply chains and the supplier management principles of “transparency in the supply chain, responsible procurement, no human rights issues, and minimum environmental impact”. To maintain secure lithium supply chains, we review supplier information on a regular basis to understand their links, such as raw material mining, shipping, and processing.
The Company has invested in and engaged in lithium mining rights projects in Australia, Argentina, Mexico, and Ireland, as well as negotiated off-take agreements with them, in order to ensure upstream lithium supply chains. By the end of 2021, the Company had procured all of its raw materials directly from the mines in which Ganfeng Lithium had stakes, with no artisanal mining or procurement through middlemen. We can reduce the risk of conflict minerals by ensuring clear source of mineral sources, well-defined transit routes, manageable hazards, and traceability through equity and off-take agreements.
