On April 18, Sichuan Yahua Industrial Group Co.Ltd(002497) disclosure announced that its wholly-owned subsidiary, Yahua international, signed an agreement with Canadian super lithium company to invest C $5 million to subscribe for 13.23% of the shares of super lithium company. Meanwhile, Yahua international will purchase 60% of the equity of the wholly-owned subsidiary of super lithium company in cash and hold its Fugen lake hard rock spodumene lithium project and Georgia lake hard rock spodumene lithium project. The above investment related proposals have been deliberated and approved by the board of directors of Sichuan Yahua Industrial Group Co.Ltd(002497) company.
It is worth mentioning that compared with the previous equity investment in lithium resources, Sichuan Yahua Industrial Group Co.Ltd(002497) will hold lithium resources for the first time in this transaction. The relevant person in charge of the company introduced to the reporter of Securities Daily that the lithium mineral resources after holding will form a supporting with the company’s lithium salt production capacity in Ya’an, Sichuan.
In recent years, a number of A-share new energy industry chain companies have opened a “buy buy” model in domestic and foreign markets, competing to layout the upper reaches of the lithium industry. Analysts said that with the increasing competition of lithium enterprises in Canada, it will become a hot trend for Chinese funded enterprises to enter the lithium industry in Canada.
the first phase will design and build 200000 tons / year
lithium oxide 6% lithium concentrate concentrator
Sichuan Yahua Industrial Group Co.Ltd(002497) the lake Fugen hard rock spodumene lithium project and the lake Georgia hard rock spodumene lithium project involved in this transaction are located in Ontario, Canada. The mining area has good infrastructure support and convenient transportation. The nearby expressway can directly reach the port, about 145 kilometers. According to the preliminary results, a lithium concentrate mining and dressing plant with 6% lithium oxide of 200000 tons / year will be designed and built in the first phase, and the continuous operation time will not be less than 10 years. In the later stage, according to the further detailed exploration, the capacity of the second phase will be expanded to 400000 tons.
It is reported that after acquiring 60% of the equity of the wholly-owned subsidiary of ultra lithium company, the wholly-owned subsidiary of ultra lithium company will become a joint venture between Yahua international and ultra lithium company. Super lithium will continue to seek acquisition opportunities for high-quality hard rock lithium and other resources for the joint venture, and continue to specifically explore, discover and acquire more Canadian lithium resources for the joint venture. According to the agreement, the board of directors of the joint venture will have five members, three of whom will be nominated by Yahua international. In addition, dilution is prohibited before the joint venture starts commercial production.
At present, as the Fugen lake lithium project and Georgia lake lithium project of ultra lithium company are in the exploration stage, the transaction pricing of Yahua International’s acquisition of a wholly-owned subsidiary of ultra lithium company will comprehensively consider various factors and be determined by both parties after negotiation.
For this transaction, many investors gave a positive evaluation: “this is a practical enterprise. Deploy more resources internationally to hedge the impact of lithium ore price rise.” “The counterparty has no business income, holds the mining right and exploration right, and gives a little Argentine salt lake. Yahua has copied the bottom this time.”
Xuan Jiyou, director of Qianmen asset investment and research, believes that Sichuan Yahua Industrial Group Co.Ltd(002497) this investment is mainly for mining, and the investment target is from the same industry of the company. From the current price, it is a “more cost-effective” transaction.
“This subscription for the equity of Canada super lithium company and the investment in the mining right of spodumene ore is the company’s further layout in the upstream resource end of the lithium industry. It will invest and promote the exploration, development, construction and operation of Fugen lake lithium project and Georgia lake lithium project as soon as possible, which is conducive to enriching the company’s upstream lithium resources in the future and improving the company’s independent and controllable ability of lithium ore.” Sichuan Yahua Industrial Group Co.Ltd(002497) means.
Chinese enterprises at home and abroad
start the “buy buy” mode of lithium ore
Sichuan Yahua Industrial Group Co.Ltd(002497) in recent years, the expansion of resources in the upstream of lithium industry is more than that. In February 2022, the company announced to participate in 3.4% equity of aby company in Australia and signed the lithium concentrate off purchase and sales agreement; In addition, the company renewed the lithium concentrate underwriting agreement with Galaxy lithium until 2025, which will provide no less than 120000 tons of lithium concentrate every year; The company also shares in energy investment lithium industry, Australian core company, Australian EFE company, Australian EVR company and other enterprises, and reserves lithium resources through various channels.
It is not just that Sichuan Yahua Industrial Group Co.Ltd(002497) is enthusiastic about the layout of lithium resources Byd Company Limited(002594) , Ganfeng Lithium Co.Ltd(002460) , Contemporary Amperex Technology Co.Limited(300750) , Tibet Summit Resources Co.Ltd(600338) , Zijin Mining Group Company Limited(601899) and other companies hunting “lithium” overseas have attracted extensive attention in the market.
In this regard, Qi Haili, President of Beijing Teyi Sunshine New Energy Technology Co., Ltd., told the Securities Daily that with the acceleration of electrification of global fuel vehicles, the gradual increase of the number of new energy vehicles and the expansion of industry leakage rate, the future growth space of lithium battery sector will be a deterministic incremental market, and the era of lithium resources as the king has come. “Many lithium mines, lithium salts, including batteries and other enterprises are vigorously extending the industrial chain, strengthening the chain and supplementing the chain. At the same time, transnational and cross-border cooperation in the lithium battery industry has become a new normal for the development of the industry. Powerful enterprises are taking advantage of capital advantages to increase the links of the industrial chain, especially to layout the upstream lithium resources as soon as possible and seize the first opportunity. Locking and seizing mines has become the most secure operation in the era of” resources are the king. “
It is worth mentioning that the recent news that the price of lithium carbonate fell below 500000 yuan / ton for the first time in the year has attracted market attention, but the development trend of lithium salt is still optimistic by the market. Ping An Securities pointed out that the global shortage of lithium resources will support the high price of lithium salt.
Xuan Jiyou told the Securities Daily that there are two trends in the development of new energy vehicles in the future: the increasing battery density and the increasing measurement of the total amount of batteries used by bicycles. This will lead to the continuous growth of the industry’s demand for cathode materials and basic materials. At present, China’s lithium resource production capacity can not meet the demand. It still depends more on overseas mines. From the perspective of the whole market, the trade has not been fully opened up. The price of lithium resources may fluctuate around or above 500000 yuan / ton for a long time.
