If you have lithium ore, you have "confidence"? The share price of China Mineral Resources is at an all-time high. Uncertainty exists in the Bikita lithium project [SMM News]

SMM Feb. 22: last night, China Mineral Resources issued an announcement of abnormal stock price fluctuations in response to the company's three consecutive trading days (February 17, 18, 21) where the cumulative deviation from the closing price increase exceeded 20%. The announcement shows that everything in the company's operation is normal, and there is no information that should be disclosed but not disclosed. It is worth mentioning that recently, there has been a lot of news about the layout of overseas lithium mines in China Mineral Resources. Among them, the discussion that China Mineral Resources spent 1.1 billion yuan to buy a loss mine, the Zimbabwe Bikita lithium mine, is also very hot, and even China Mineral Resources has received a letter of concern from the Shenzhen Stock Exchange.

Subsequently, in response to the announcement, China Mineral Resources mentioned that Bikita, affected by the global novel coronavirus epidemic and started the mine sale plan in 2020, had not been operating at full capacity, resulting in a sharp decline in production and sales, which rebounded in 2021. According to statistics, Bikita sold 15513.16 tons of lithium feldspar in 2020 and 24934.23 tons in 2021, an increase of 60.73% over the same period last year.

At the same time, thanks to the continuous rise in the sales price of lithium ore in the fourth quarter of 2020, the operating income of Bikita in 2021 is higher than that in 2020, and the net profit is also higher than that of the previous year.

And recently, when investors asked whether the power shortage in Zimbabwe would affect the operation of the Bikita mine, China Mineral Resources replied that the Bikita mine in Zimbabwe is a mature and production mine with skilled staff and a mature and harmonious community. At present, the Bikita mine has normal power supply and there is no need to build a power plant. After completing the acquisition of the project, the company will optimize all work according to the needs of the project.

In addition, as of December 2021, China Mineral Resources and its subsidiaries have a total of 95 mining rights, including 37 mining rights, 44 exploration rights, 13 surface leases and 1 quarry lease. The above-mentioned mining rights are 100% owned by the company, and the resource minerals involved in all kinds of mining rights are: cesium, lithium, copper, cobalt, gold, silver, ferrochromium, tantalum, beryllium and so on.

In the change announcement, China Mineral Resources hinted that the approval or filing procedures of the domestic and foreign authorities involved in the acquisition of the Bikita lithium mine in Zimbabwe have not yet been completed, and there is uncertainty about the timing of whether the relevant approval / filing will be successfully obtained in the future. And the proposed acquisition of the target Bikita lithium mine project is located in Zimbabwe, the follow-up operation of the mine is greatly affected by Zimbabwe's macro environment, industry policies, exchange rate fluctuations and laws and regulations, if the relevant policies in Zimbabwe change, it will have an impact on the future production, operation and profitability of the Bikita lithium mine project.

On the evening of January 14, China Mineral Resources announced its 2021 performance forecast that the company expects to achieve a net profit of 500 million to 560 million attributable to shareholders of listed companies in 2021, an increase of 186.92% and 221.35% over the same period last year.

Referring to the reasons for the company's performance growth, China Mineral Resources mentioned that with the rapid development of the new energy industry and the rising prosperity of the lithium salt industry, the price of lithium salt products continues to rise, the company's lithium salt business production and marketing is good, and profitability is improved. In addition, the company's 25000 tons of battery-grade lithium hydroxide and battery-grade lithium carbonate production line was put into production in August 2021, and battery-grade lithium hydroxide products were formed and sold in the fourth quarter, which made a certain contribution to the company's annual performance.

According to the spot price of SMM, the price of battery-grade lithium hydroxide has been rising all the way since 2022. As of February 21, the spot price of battery-grade lithium hydroxide has risen to 384500 yuan / ton, up 162000 yuan or 72.81% from the beginning of the year.

"Click to order to view the spot historical price of SMM new energy products.

SMM research shows that as the decline in supply is greater than the decline in demand, the gap in lithium hydroxide widened in February, and prices rose significantly. Near the end of February, the order volume of high-nickel material enterprises has increased, in the case of the upstream quotation continues to rise, downstream enterprises are expected to passively accept the increase in raw materials, the transaction price further upward. "View details

However, despite the announcement of share price changes, the share price of China Mineral Resources continued to rise after the opening of trading today, hitting an all-time high of 99.36 yuan per share at one point in intraday trading.