Lithium salt new production capacity releases medium ore resources January-February net profit increases by more than 11 times compared with the same period last year

After March 17, China Mineral Resources (002738) announced its main operating data from January to February. From January to February 2022, the company produced and operated well. The newly built 25000 tons of battery-grade lithium hydroxide and battery-grade lithium carbonate production line reached production in November 2021, and the company completed the reconstruction and expansion of the 6000-ton LiF production line. Due to the release of new production capacity and the rise in the price of lithium products, the company's profitability has improved significantly compared with the same period last year. According to the company's preliminary accounting, from January to February 2022, the company achieved an operating income of about 1.127 billion yuan, an increase of about 417.70% over the same period last year, and a net profit of about 486 million yuan belonging to shareholders of listed companies, an increase of about 1170.12% over the same period last year.

In addition to the existing capacity to release new output, China Mineral Resources also announced on February 25 that the company, through its wholly-owned company Chunpeng Lithium Industry, will invest about 1 billion yuan to build a project with an annual output of 35000 tons of high-purity lithium salt in Xinyu City, Jiangxi Province. The main products of the project are battery-grade lithium carbonate and battery-grade lithium hydroxide, and the by-products are anhydrous sodium sulfate. the construction period of the project is about 12 months.

The Battery Network noted that China Mineral Resources has recently made a major breakthrough in upstream lithium ore. On February 8th, China Mineral Resources announced that rare, a wholly-owned subsidiary of Hong Kong, plans to acquire a stake in Afmin100% and 100% of Amzim at a benchmark consideration of $180 million in cash. So far, the prerequisites for the "share and debt Sale Agreement" in the acquisition have been fully met. It has been confirmed by all parties that the follow-up delivery of the Bikita lithium mine project in Zimbabwe will be launched.

It is worth noting that Afmin and Amzim currently hold a combined 74% interest in Bikita, and Bikita's main asset is the Bikita lithium project in Zimbabwe. Bikita lithium ore project is currently in the production stage, the main products are technical grade lithium feldspar concentrate and cesium garnet concentrate with high grade and low impurity. According to the resource estimation report issued by Independent Resource Estimations (IRES) in accordance with the NI43-101specification, the cumulative amount of retained lithium mineral resources discovered in the Bikita lithium mining area is 29.414 million tons, and the average Li2O grade is 1.17%. The average metal content of Li2O is 344000 tons, equivalent to 849600 tons of Li2CO3 equivalent.

In addition, China Mineral Resources own lithium mine Canada TANCO mine 120000 tons of spodumene mining capacity was officially put into production in October 2021 (currently basically reached production), the expansion capacity of 180000 tons is expected to be put into production in mid-2022.

According to the analysis of China Yinhe Securities Research and report, with the production and release of new lithium salt and lithium mineral energy of China Mineral Resources, the company's lithium salt output and lithium ore self-sufficiency rate will be greatly increased, accelerating the transformation to an integrated enterprise of lithium resources mining and "specialization and special new" lithium electricity new materials processing, and the performance is expected to enter an explosive period.

In addition, according to the 2021 performance forecast disclosed by China Mineral Resources, the company expects to achieve a net profit of 500 million to 560 million attributable to shareholders of listed companies last year, an increase of 186.92% and 221.35% over the same period last year.