Dazhong Mining Co., Ltd. announced on the evening of September 28 that its wholly-owned subsidiary Anhui Dazhong New Energy Investment Co., Ltd. has received a reply letter from China's Ministry of Natural Resources (MNR) regarding the "Exploration Report on the Jiada Mining Area (Lines 119–167), Ma'erkang City, Sichuan Province" (MNR Reserve Filing No. [2026] 177). The exploration report on lithium resources at the mine has passed the review and filing process.
Peripheral expansion adds 1.05 million tonnes of LCE at 1.26% grade
According to the review opinion (MNR Mineral Reserve Evaluation No. [2026] 17), as of December 31, 2025, the 4.0178-square-kilometre peripheral zone of the Jiada lithium mine's first mining area added 33.523 million tonnes (Mt) of lithium ore resources, containing 423,800 tonnes of Li2O at an average grade of 1.26% — equivalent to approximately 1.0468 million tonnes of lithium carbonate equivalent (LCE), based on a Li2O-to-lithium carbonate conversion factor of 1:2.47.
Following the expansion, Jiada's cumulatively filed LCE resources rose from 1.4842 million to 2.531 million tonnes. Combined with the 3.24 million tonnes of LCE at the Tongtianmiao section of the Jijiaoshan mining area in Linwu County, Hunan Province, Dazhong Mining's total filed LCE resources now exceed 5.77 million tonnes, ranking among the leading positions among domestic peers. The newly filed tonnage came on top of the previously disclosed "over 4.72 million tonnes" of LCE filed for the first mining areas of the company's two lithium mines.
Around 15 sq km of the exploration licence remains undrilled; Phase II geological work completed
The Jiada exploration licence covers 21.2247 sq km, including a 2.056 sq km first mining area. Even after adding the 4.0178 sq km zone covered by the newly filed report, roughly 15 sq km of the licence area remains to be explored, leaving room for further resource growth.
According to the company's investor relations disclosures, the area beyond the first mining zone is divided into Phase II and Phase III blocks. Phase II geological exploration has been completed, with a third-party agency currently preparing the geological report, while Phase III field exploration is scheduled for 2026. The exploration report filed this time passed expert review in July this year, completing the full process from review to official filing. Earlier, the exploration achievements of both Jiada's first mining area and the Jijiaoshan mine were selected among the China Geological Society's "Major Geological Prospecting Breakthroughs of 2025."
Mining permit application submitted; under consultation with local authorities
Regarding the exploration-to-mining conversion, Dazhong Mining disclosed in its Q1 2026 report that the mine's ecological restoration plan had passed expert review by the MNR. At a results briefing on May 27, the company confirmed that its application for the mining permit had been formally submitted to the MNR and is currently at the key stage of soliciting opinions from local authorities, with a dedicated task force following up.
While the permit is being processed, supporting infrastructure at the mine is advancing in parallel: the haulage tunnel is being bored by two tunnel boring machines ("Dazhong" and "Jiada") working in tandem, roads supporting the backfill station have been completed, the transmission line for the tailings pond has been energised, and the 110kV substation and associated lines are under construction. On the output side, the first mining area of Jiada has an MNR-approved mining capacity of 2.6 million tonnes per annum (Mtpa), translating to roughly 50,000 tonnes per year of lithium carbonate at full run-rate. In 2025, the company produced by-product crude ore equivalent to 5,000 tonnes of LCE using existing facilities, and in H1 2026 it pre-sold 200,000 tonnes of crude ore, collecting 460 million yuan in advance payments.
Downstream smelting: JV for 200,000 tpy Meishan lithium salt project registered; Phase I in preliminary procedures
On the smelting side, in March 2026 Dazhong Mining signed a tripartite investment agreement with the Meishan High-Tech Industrial Park Administrative Committee and Wanhua Chemical (Sichuan) Battery Materials Technology Co., Ltd. to jointly build a 200,000 tpy lithium salt project in three phases: 30,000 tpy in Phase I, 70,000 tpy in Phase II and a planned 100,000 tpy in Phase III, with combined investment of around 2.2 billion yuan for the first two phases.
The joint venture serving as the Phase I construction vehicle, Sichuan Dazhong New Energy Co., Ltd., completed business registration on June 29 with a registered capital of 300 million yuan — Dazhong Mining holding 80% via a 240-million-yuan cash contribution and Wanhua's battery materials unit holding 20%. Phase I is currently undergoing project approval, energy assessment and environmental impact assessment procedures. Once Jiada's first mining area reaches full capacity of around 50,000 tpy of lithium carbonate, it can cover the feedstock needs of the Meishan project's Phase I (30,000 tpy of lithium salts), forming an initial "mine-plus-smelter" raw material loop.
SMM Comments
SMM believes that as the new Implementation Regulations of the Mineral Resources Law place lithium on the national strategic minerals catalogue and concentrate approval authority at the MNR, compliant, fully-permitted lithium projects with ongoing resource expansion are becoming increasingly scarce. The Jiada resource filing dovetails with the construction sprint at Jijiaoshan ahead of commissioning, as Dazhong Mining's lithium segment advances along a phased path of "first mining area first, peripheral expansion, and downstream salt extension." That said, with Jiada's mining permit yet to be granted and the Meishan Phase I project still in preliminary procedures, the pace at which resource value translates into output and profits will hinge on the timing of licence approvals.
The company also cautioned that uncertainty remains over when production-related permits will be obtained, and that the filing is not expected to have a material impact on its current-period results. Investors are advised to be mindful of the risks.
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