SHANGHAI, June 17 (SMM) - After the market closing on June 16, Zangge Mining announced that the company's wholly-owned subsidiary Zangge Mining Investment and ULT and its wholly-owned subsidiary ULA signed a final agreement on the development of the Laguna Verde Salt Lake Lithium Project. After consensus among the three parties, Zangge Mining Investment will acquire part of the shares of ULA held by ULT through a designated third party.
Zangge Mining will pay ULT a purchase price of $10 million and invest $40 million in ULA in installments to acquire a 65% stake in ULA. ULA will explore and develop the Laguna Verde Salt Lake lithium project and turn it into a platform for the development of other salt lake lithium projects in Argentina in the future.
It is worth mentioning that the announcement revealed that this agreement will not have a significant impact on the company's operating performance for the year, and there is no possibility of relying on the other party due to the performance of the agreement.
In early June, Argentina, a major supplier of lithium ore, announced to set a reference price for lithium carbonate exports at $53/kg, or $53,000/mt, to prevent low export quotations and improve transparency. When the news came out, lithium mining stocks in the United States and Australia fell sharply.
According to SMM, this export price limit is actually an act of the Argentine government to protect tax interests. In short, some lithium salt or lithium ore manufacturers will make profits by setting up subsidiaries and trading at low internal prices. Argentina's establishment of a lithium carbonate export reference price can effectively prevent the excessive disconnection between the internal settlement price of the enterprise and the market price, resulting in a serious loss of government tax revenue.
Taking April customs data as an example, China imported 749 mt of Argentine lithium carbonate, and the average import price was $15,980/mt or 106,700 yuan/mt, which is significantly lower than the current price of 468,000 yuanmt and the average spot price of 502,500 yuan/mt in early April.
In addition to the Zangge Mining, Ganfeng Lithium also has lithium mines in Argentina. On June 8, Ganfeng Lithium also emphasized on the interactive platform that the 40,000 mt lithium carbonate project in Argentina is expected to be put into operation in the second half of 2022, and the specific production time depends on the construction progress of the project. In addition, Gotion Hi-Tech, Yahua Group, Zijin Mining, Tibet Mining and other companies all have related lithium mines in Argentina.
Recently, according to the SMM spot price, the spot price of lithium carbonate stabilized at 468,000 yuan/mt after a short upward trend.
SMM survey shows that the current supply of lithium carbonate was stable and the quotations of mainstream manufacturers were stable. The transaction volume was mainly concentrated in the early-June, and was poor in the mid-June. In terms of demand, although the NMC demand recovered slightly, the actual purchase volume was poor. The procurement of LFP was mainly made as needed and the terminal stabilised. The market was in a wait-and-see sentiment amid the fierce game.
After the above-mentioned positive news was released, Zangge Mining opened higher today, rising more than 4%.
