Fulin Seiko plans to acquire Hengxin Rong 9% equity layout upstream lithium ore resources

SMM Sept. 13: Fulin Seiko announced that the company plans to sign an "equity transfer agreement" with Chen Wei, a natural person shareholder of Qinghai Hengxin Rongli Technology Co., Ltd., to acquire 9% of Hengxin Rong's shares for 333 million yuan.

The announcement shows that Qinghai Hengxin Rong Lithium Industry Technology Co., Ltd. is mainly engaged in the extraction, production and application of salt lake brine mineral resources, and the company has relatively complete and advanced refining production technology and equipment.

And in this era of "ore is king", Hengxinrong has the exploration right of deep brine salt lake resources in the northeast of Taijinel Lake, Haixi Prefecture, Qinghai Province. the total area of the mining area is 394.26 square kilometers, which is a liquid super-large lithium deposit.

In addition, it is worth mentioning that Hengxinrong is the first enterprise in China to apply positive osmosis membrane technology to extract lithium from salt lake. the company's first phase of battery-grade lithium carbonate plant with an annual output of 20,000 tons has been put into production, which can be used to produce new energy vehicle batteries in the future.

However, it should be noted that although Hengxin Rong has the exploration right of deep brine salt lake resources in the northeast of West Taijinel Lake, it has not obtained the corresponding mining right, and at present, after the end of the exploration work, Hengxin Rong is in the process of exploration and transfer. whether it can obtain the mining right of the mine in the future and the specific value of the mining area in the future is still unknown, which is also one of the risk points suggested by Seiko.

However, there is no doubt that after the acquisition of part of Hengxin Rong, Fulin Seiko broadens the company's lithium cathode upstream raw material supply chain, improve the security and stability of the supply chain, and grasp the upstream lithium resources.

Moreover, according to the spot quotation of SMM, the price of battery-grade lithium carbonate has risen rapidly recently. as of September 13, the price of domestic battery-grade lithium carbonate has coincided with that of lithium hydroxide, with an average price of 140500 yuan per ton, up more than 60.57% from mid-July.

"Click to view the average spot price of SMM metal.

SMM believes that the shortage of lithium carbonate market continues in the second half of the year, and overseas imports are significantly reduced due to shipping delays and container shortages caused by the epidemic, which has a great impact on the supply of lithium carbonate in the domestic market, and lithium carbonate prices will continue to rise.

At the close, Fulin Seiko rose 12.01% to 45.98 yuan per share.