Can Yahua Group enter the first camp of the lithium industry?

Following Tianqi Lithium Industry and Ganfeng Lithium Industry, this listed company, which was originally based on civil explosions, is rushing to purchase upstream lithium resources in the world, with the intention of building the company into the third pole of China's lithium industry.

Since the beginning of this year, Yahua Group (002497) has expanded its lithium salt production capacity while purchasing lithium, expanding its production capacity by increasing its capital and expanding its production. It has shown its determination and courage to try to impact the first camp of the lithium industry.

Yahua Group's 2017 semi-annual report shows that the company achieved operating income of 1.028 billion Yuan and net profit of 127 million Yuan. Among them, the lithium plate realized revenue of 282 million Yuan, an increase of 33.7% over the same period of the previous year, and the proportion of operating income increased from 21.99% to 27.4%. The main reason is that Yahua Group seized the opportunity of the lithium salt market, and the sales volume and revenue of lithium salt products grew faster than the same period of last year.

Objectively speaking, the revenue of the company's lithium salt business in the company's lithium salt business is still relatively small, and there is a big gap between the lithium salt revenue of Tianqi Lithium Industry and Ganfeng Lithium Industry. With the increase in the supply of lithium raw materials, the gradual production of lithium salts and the continued rise in the market price of lithium carbonate, the Yahua Group will become a dark horse in the lithium industry.

Overseas raw material supply

The Yahua Group, which is mainly engaged in the civil explosion business, acquired a 37.25% stake in Sichuan Guoli in 2013 and a 100% stake in Xingyu Lithium in 2014. It officially cut into the lithium industry and opened the dual business of “civil explosion + lithium salt” development model.

Benefiting from the strong demand for power batteries in the growth of new energy vehicle market, lithium carbonate has entered the price increase channel since the second half of 2015, and the price increase of lithium carbonate has enabled lithium carbonate enterprises to achieve substantial growth in net profit. However, behind the booming production and sales of lithium carbonate, the shortage of upstream lithium resources and the extreme dependence on imports have become the constraints of the development of lithium carbonate enterprises.

In this context, Yahua Group increased its layout in the lithium industry in 2017. The expansion of lithium salt production capacity and the supply of raw materials are the two most important tasks.

On December 1, Yahua Group announced that the company's wholly-owned subsidiary, Yahua International Investment Development Co., Ltd. recently signed an "Offering Agreement" with Galaxy Lithium Australia Co., Ltd. for the purchase of lithium concentrate. The contract period is 5 Year (from January 1, 2018 to December 31, 2022).

According to the agreement, the products purchased by Yahua International from Galaxy Lithium Industry are spodumene concentrates, of which the minimum purchase amount per year in 2018 and 2019 is 100,000 tons, and the minimum purchase amount per year from 2020 to 2022. It is 120,000 tons.

Yahua Group said that the company will increase the development of the lithium industry in the future. The lithium concentrate purchased by this agreement will become one of the important raw material guarantee channels for the company's future basic lithium salt production.

On the same day, Yahua Group announced another announcement. The wholly-owned subsidiary, Yahua International, and the wholly-owned subsidiary of Australia Core, Lithium Development (Grantz Northern Territory) Co., Ltd. signed the “Offer Agreement” for DSO lithium mine. Yahua International will underwrite the DSO lithium mine of the future Phoenix project in the lithium industry with reference to the market price, and will have priority in the development of lithium mines for other lithium mine projects in the lithium industry.

At present, Yahua Group has completed the subscription of 33.4 million shares of Core, accounting for 6.73% of Core's existing share capital.

Obviously, by signing the above two procurement agreements, the shortage of lithium raw materials in the next few years will be largely solved, and the domestic lithium salt production capacity will be released and the raw material cost will be reduced. The camp provides the foundation.

Can it come back later?

Those who have access to resources have gained the world. At present, both battery companies and materials companies have realized that mastering upstream lithium resources will have an absolute advantage in future market competition. For lithium salt enterprises, mastering the upstream lithium resources is to put the lifeblood of the enterprise in the hands, so it is imperative.

It is worth noting that although the Yahua Group has entered the lithium industry in 2013, its lithium business has been unsatisfactory in the next few years. It even almost quit because of the continued loss of the lithium business, but it is “blessed in disguise” because it cannot be sold smoothly. .

In fact, among the domestic lithium salt enterprises, Yahua Group is not lacking in lithium resources or even rich. The company has the right to mine Lijiagou lithium mine, the largest lithium mine in Asia. However, since the acquisition of mining rights for four years, it has not been successfully exploited, and it is unable to provide raw materials for the release of its lithium salt capacity.

However, the development dilemma of the “difficult production” of the domestic lithium mine in Yahua Group is expected to be changed in the near future.

On September 11, Yahua Group announced that the company and Sichuan Energy Investment Group Co., Ltd. (hereinafter referred to as Chuanengtou) signed the "Cooperation Agreement on the Acquisition of Sichuan Guoli Lithium Materials Co., Ltd. and Related Cooperation Matters" And signed the "Equity Transfer Agreement" with other shareholders of Guoli Company.

According to the agreement, the two parties agreed to acquire 62.75% of the shares held by other shareholders except Sichuan Guoli, except for the Yahua Group. After the completion of the acquisition, Sichuan Guoli will be divided into two independent companies: Guoli Lithium Salt and Guoli Mining. Yahua Group will hold 56.26 and 37.25% of the above-mentioned companies respectively.

Yahua Group said that the agreement is conducive to the use of the status and strength of the state-owned enterprises and the development experience of the mines, to speed up the construction and mining process of the Lijiagou spodumene mine, and to realize the transformation of resources into production capacity as soon as possible. The company's lithium salt products produce important lithium concentrate resources.

According to the data, the Lijiagou spodumene mine has discovered a total of 40.361 million tons of ore resources, equivalent to 512,185 tons of lithium oxide. According to the 2016 “Evaluation Report on the Mining Rights of Lijiagou Lithofene Mine in Jinchuan County”, Lijiagou Mine is expected to be completed and put into operation in 2019. It is expected to produce 152,900 tons of lithium concentrate per year (13.29 million tons of 6% lithium). Concentrate and 20,000 tons of 7% low-iron lithium concentrate) equivalent to about 20,000 tons of lithium carbonate.

At present, Tianqi Lithium Industry, Ganfeng Lithium Industry and Yahua Group are all expanding their lithium salt production capacity, and they all have overseas lithium mines to provide raw material support. Although the current Yahua Group's scale in the field of lithium salt is still small, but with the support of domestic and international lithium resources supply, it will have certain advantages in raw material supply, cost reduction and capacity release, which is beneficial to its lithium salt. Increased capacity utilization and market share.

It is understood that Sichuan Guoli, a subsidiary of Yahua Group, now has a capacity of 6,000 tons/year of lithium carbonate, and is currently upgrading its production line with a capacity of 3,000 tons. Sichuan Zhongli’s wholly-owned subsidiary, Zhongli Lithium, now has 6,000 tons. / year of lithium hydroxide production capacity, another flexible production line with an annual output of 7,000 tons; the wholly-owned subsidiary Xingyi lithium industry now has 6,000 tons / year of lithium hydroxide production capacity, and will add a new production line with an annual output of 6,000 tons . By 2018, Yahua Group will have a total capacity of 24,000 tons / year of lithium hydroxide and 9,000 tons / year of lithium carbonate.

On this basis, Yahua Group also launched a new round of lithium salt capacity expansion plan, and increased capital for Yahua Technology, Yahua International, Ya'an Lithium and other subsidiaries to enhance the operating strength and scale of the subsidiary. It provides guarantee for the construction of its lithium salt capacity expansion project.

It is worth noting that although the Yahua Group has a strong impact on the first camp of the lithium industry, the success of the company will depend on the progress of the above layout. The results remain to be seen.

The page contains the contents of the machine translation.