Sichuan Development Lomon Co.Ltd(002312) on the evening of January 14, it was announced that the company planned to issue shares to the counterparties Chuanfa mining and Sichuan salt industry to purchase 80% and 20% equity of Tianrui mining respectively. Through friendly negotiation between all parties involved in the transaction, it is determined that the transaction consideration of 100% equity of Tianrui mining is 956 million yuan. Tianrui mining is mainly engaged in phosphate rock mining, processing and sales, which is the upstream of the listed company’s main business phosphorus chemical business.
Before this transaction, Sichuan Development Lomon Co.Ltd(002312) focused on the field of fine phosphate and took industrial grade monoammonium phosphate and feed grade dicalcium phosphate with leading market share in China as the core products. Phosphate rock is the main raw material for Sichuan Development Lomon Co.Ltd(002312) main business. Due to the low average grade of China’s phosphate rock resources, high transportation cost and less inter provincial transportation, the control of production enterprises over short-range phosphate rock resources will affect their profitability and competitive advantage.
According to the announcement, Sichuan Development Lomon Co.Ltd(002312) currently has production bases in Mianzhu, Sichuan Province and Xiangyang, Hubei Province respectively, of which the phosphate production capacity of Mianzhu base is 1.8 million tons, which is the main production base of monoammonium phosphate and compound fertilizer of the company. However, the company’s Phosphate Mine in Mianzhu, Sichuan Province is closed due to the impact of the panda reserve, and all phosphate ores used in Mianzhu production base need to be purchased externally, More than 2 million tons of phosphorus ore need to be purchased every year. Stable acquisition of phosphate rock resources in Sichuan Province will become an important part of the company’s subsequent competitiveness.
The main business of Tianrui mining is the mining, beneficiation and sales of phosphorus ore. It owns the phosphate ore resources of laoheba phosphate mine copper Changgeng (No. 8 ore block) in Sichuan Province. It is the mining right resource with the largest reserves in Mabian area in Sichuan Province, and has obtained the mining license corresponding to the phosphate ore with a production scale of 2.5 million tons / year. Tianrui mining has an upstream and downstream relationship with longmang phosphorus chemical industry, a wholly-owned subsidiary of Sichuan Development Lomon Co.Ltd(002312) . In recent years, Tianrui mining is the main supplier of phosphorus ore, the main raw material of longmang phosphorus chemical industry. The phosphate rock provided by Tianrui mining has short transportation distance, low cost, stable output and low impurity content, which has greatly contributed to the rapid increase of industrial grade monoammonium phosphate production capacity of Sichuan Development Lomon Co.Ltd(002312) in recent years.
Sichuan Development Lomon Co.Ltd(002312) said that the acquisition of Tianrui mining will help the company directly obtain high-quality and scarce phosphate rock resources in Sichuan Province, improve the company’s phosphorus chemical industry chain, further improve the guarantee capacity of upstream phosphate rock resources in the company’s main production base and reduce related party transactions, Reducing the dependence on purchased phosphate rock and reducing the adverse impact of phosphate rock price fluctuation on the company’s profitability, and improving the overall value and core competitive advantage of the phosphorus chemical industry chain of listed companies are in line with the company’s “mineralization integration” development strategy.
