China Mineral Resources plans to acquire Bikita Lithium Ore Equity Beneficiation capacity of 700000 tons per year for US $180 million

On the evening of February 8th, China Mineral Resources (002738) announced that in order to increase the company's lithium mineral resources reserves, improve the company's lithium salt business raw material self-sufficiency rate, promote the implementation of the company's strategic development plan, and achieve the company's sustainable development. On January 29th, China Mining (Hong Kong) rare Metal Resources Co., Ltd. (hereinafter referred to as "Hong Kong rare"), a wholly owned subsidiary of the company, signed the "Agreement on the Sale of shares and creditor's Rights" (hereinafter referred to as "this Agreement") with African Metals Management Services Ltd ((hereinafter referred to as "AMMS") and Southern African Metals & Minerals Ltd ((hereinafter referred to as "SAMM"). Rare Minerals of Hong Kong plans to acquire a combined 1 African Minerals Ltd (stake held by AMMS and SAMM at a benchmark consideration of US $180 million in cash.) 100% stake in the underlying transaction and 2 Amzim Minerals Ltd () 100% stake in the underlying transaction hereinafter referred to as "Amzim").

It is reported that Afmin and Amzim, the subject of the transaction, hold a combined 74% interest in Bikita Minerals (Private) Ltd (hereinafter referred to as "Bikita"). The main asset of Bikita is the Bikita lithium project in Zimbabwe, with a mineral processing capacity of 700000 tons per year. At present, Bikita is implementing internal restructuring and share buyback cancellation. If the final internal restructuring of Bikita is approved by the government, China Mineral Resources will hold 99.05% of the equity and related claims of Bikita; if the final internal restructuring of Bikita is approved by the government and the share buyback cancellation is completed, the company will hold 100% of the equity and related claims of Bikita.

The data show that the Bikita lithium ore project is in the production stage, and the main products are technical grade lithium feldspar concentrate and cesium garnet concentrate with high grade and low impurities. 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. SQI6 orebody associated with tantalum mineral resources 8.4 million pounds Ta2O5,Ta2O5 average grade 186ppm.

China Mineral Resources said that this transaction is in line with the company's active reserve of rare light metal mineral resources, focusing on the layout of lithium new energy materials and rare light metals (cesium, rubidium) and other emerging materials industries, and improving the development strategy of the upstream and downstream industrial chain. After the completion of this transaction, it can increase the company's lithium mineral resources reserve, improve the company's lithium salt business raw material self-sufficiency rate, ensure the company's lithium salt business medium-and long-term raw material supply, and enhance the company's main business profitability and sustainable development ability.

According to Battery Network, China Mineral Resources engaged in geological exploration in Zimbabwe in 2004 and established a subsidiary in Zimbabwe in 2009. it currently operates geological exploration, mining and mineral processing operations, and has a wealth of local work experience in Zimbabwe. Bikita mine has convenient transportation, perfect infrastructure, is in the mining stage, and has corresponding production facilities. after the completion of the project acquisition, the company plans to expand the mine production scale during the year.

It is worth noting that last month, China Mineral Resources disclosed the 2021 performance forecast, with the rapid development of the new energy industry and the rising prosperity of the lithium salt industry, the price of lithium products continued to rise, the company's lithium salt business production and marketing was good, and the profitability improved. The company expects to achieve a net profit of 500 million to 560 million in 2021, an increase of 186.92% 221.35% over the same period last year.

Minsheng Securities said in a previous research report that Sinopec is the largest supplier of battery-level LiF in China, and its products have entered Tesla's supply chain. The company's original LiF production capacity is 3000 tons / year, and the production capacity has been increased to 6000 tons / year after the completion of the technical transformation of the production line in 2021. The new production capacity of 15000 tons of battery-grade lithium hydroxide and 10,000 tons of battery-grade lithium carbonate began trial production in August 2021. Battery-grade lithium hydroxide products have been successfully sold in the fourth quarter, gradually contributing to performance, and capacity expansion in 2022 is expected.

In addition, in terms of resources, the Tanco mine of China Mineral Resources has 112200 tons of Li2O reserves, and the spodumene concentrator with a capacity of 120000 tons per year has been put into production in October 2021, and plans to build a new concentrator of 500000 tons per year, which is in the feasibility stage with the opencast mining scheme. The company holds a 4.72 per cent stake in Arcadia and has the right to underwrite 280000 tons of spodumene concentrate (Li2O grade 6 per cent) and 784000 tons of lithium feldspar concentrate (Li2O grade 4 per cent). With the construction of the company's own resources mining capacity, the company's lithium salt production resources will be significantly improved.