Overseas raw material guarantee supply, Yahua Group can come from behind?

Besides Tianqi Lithium and MtMarion, this listed company formerly focusing on industrial explosive products is snapping up upstream lithium resources around the world, and intent to make the company become the Top 3 lithium industry in China.

Since this year, elegance group (002497) by means of purchase has capital increase and expansion in overseas for lithium resources, in the domestic expansion of lithium salt capacity, shows the rock determination and courage, trying to hit the first camp lithium industry.

Elegance group half annual report 2017, the company's business income is 1.028 billion yuan, net profit of 127 million yuan. Among them, the lithium plate revenue of 282 million yuan, up 33.7% from a year earlier, the revenue proportion of increased from 21.99% to 21.99%.Main reason is that elegance group market opportunity, to seize the lithium salt lithium salt product sales, income was growing faster over the same period last year.

In perspective, elegance group of lithium salt industry segment of the company's revenue share is relatively small, and the sky LiYe, Jiangxi lithium salt revenue performance also there is a big gap. With the increase of lithium resources supply lithium carbonate, lithium salt gradually reaches producing and market prices continue to rise, elegance group or will become a dark horse in the lithium industry.

Overseas raw material supply

Elegance group, the main business of industrial explosive, capital increase in 2013 countries and 2014 acquisition of a 37.25% stake in Sichuan Xing sheng LiYe 100% stake, formal cut lithium industry, open the "industrial explosive + lithium" double business development model.

To benefit from the new energy automobile market growth power battery strong demand, lithium carbonate since the second half of 2015 into the channel in the price of the amount of lithium carbonate price so let lithium carbonate enterprises achieve revenue, net profit growth. However, in the production and marketing of lithium carbonate behind two prosperous, upstream lithium resources shortages and extremely dependent on imported but became lithium carbonate hampered the development of the enterprise.

In this context, elegance group intensify in the layout of the lithium industry in 2017, the expansion of lithium salt capacity and ensure raw material supply is the most important two works.

On December 1, elegance group released a statement, said the company is a wholly owned subsidiary elegance international investment development co., LTD., recently and galactic LiYe Australia co., LTD. Signed on purchase lithium concentrate the off-take agreement, the contract period for 5 years (from January 1, 2018 to December 31, 2022).

According to the agreement, this to the galactic elegance international LiYe purchasing products for spodumene concentration, which in 2018 and 2019, the annual minimum purchase amount to 100000 tons, from 2020 to 2022, the minimum purchase quantity is 120000 tons each year.

Elegance group, says the company will intensify the development of lithium industry, this agreement will become the company's future purchase of lithium concentrate foundation lithium production one of the important material guarantee of the channel.

Announcement again on the same day, elegance group, a wholly owned subsidiary of elegance international and Australian Core company is a wholly owned subsidiary (grand) northern territory LiYe development co., LTD. Signed on DSO lithium off-take agreement. Elegance international will be the future development with reference to the market price underwriting LiYe Phineas project DSO lithium and other lithium project development of LiYe lithium has priority GeZuoQuan.

Currently, elegance group has completed the Core company 33.4 million shares of equity subscription work, about 6.73% of the Core company's current total equity.

Obviously, signed by the above two procurement agreement, will be largely elegance group in the next few years lithium raw material supply shortage problem, for the domestic lithium capacity release and decrease the cost of raw materials to provide guarantee, the first camp to the impact of lithium industry provides the basis.

Whether from behind?

Resources are all over the world, the current battery enterprises or material enterprises have realized that master upstream lithium resources will occupy the absolute advantage in the future market competition. For lithium salt enterprise, knowledge of upstream of lithium resource is the lifeline of enterprise development to grasp in their hands, so it is imperative.

It is important to note that although elegance group has entered the lithium industry in 2013, but after a few years business has been developing its lithium is not ideal, even almost exit by lithium business continuing losses, are unable to successfully sell and "a blessing in disguise".

In fact, in the domestic lithium salt enterprise, elegance group is not a lack of lithium resource is very rich, even the company has Asia's largest lithium mine, the lees ditch lithium mineral rights. Obtain mining right in 4 years, however, have not been successful, unable to provide fuel for the lithium salt production release.

Elegance group, however, the development of the domestic lithium mine "difficult" dilemma is expected in the near future.

On September 11, elegance group released a statement, according to the company and Sichuan province energy investment group co., LTD. (hereinafter referred to as Sichuan can throw) signed on the acquisition of Sichuan countries manage lithium materials co., LTD., equity and cooperation agreement of relevant cooperation matters, and other shareholders with countries manage company signed the "equity transfer agreement".

Self-raised funds according to the agreement, the two sides a joint bid for the reason the elegance in Sichuan group, the other 62.75% stake held by the shareholders after the completion of the acquisition will manage surviving into Sichuan countries manage mining countries lithium salt, two independent companies, elegance group will hold the company 56.26 and 37.25% respectively.

Elegance group, says the agreement reached with the help of Sichuan can cast state status and power, and mine development experience, to speed up the lees ditch spodumene mine construction and mining process, as soon as possible to production resources, become the principle company lithium production important lithium concentrate resources protection.

Data shows, the lees ditch spodumene mine agent for mineral resources 40.36172 million tons, equivalent to 512185 tons of lithium oxide. According to the 2016 "Jinchuan county lee ditch lithium fai ore mining right evaluation report, the lees mine is expected to be completed and put into operation in 2019, after is expected to be an annual output of 152900 tons of lithium concentrate (132900 tons and 20000 tons of low of 7% 6% of lithium concentrate) lithium iron concentrate is equivalent to about 20000 tons of lithium carbonate.

At present, including the Tianqi Lithium, Jiangxi Lithium expand and elegance and groups, such as lithium capacity, and have overseas lithium provide material support. Despite the elegance group in the field of lithium scale is small, but the support of lithium mineral resources supply at home and abroad, the raw material supply, cost reduction and productivity release will have certain advantages, is conducive to the lithium salt capacity utilization and the improvement of market share.

According to understand, Sichuan elegance group holdings subsidiary countries now has 6000 tons/year production capacity lithium carbonate, is currently a new 3000 tons production line, technical capacity; Richard is a wholly owned subsidiary of Sichuan countries sheng Lithium now has production capacity of 6000 tons/year lithium hydroxide, adding a yearly produces 7000 tons of flexible production line; A wholly owned subsidiary of Xing Sheng Lithium now has 6000 tons/year of lithium hydroxide capacity, at the same time will add a yearly produces 6000 tons of production line. By 2018, elegance group will total 24000 tons/year lithium hydroxide and production capacity of 9000 tons/year lithium carbonate.

On this basis, the elegance group also launched a new round of lithium salt production capacity expansion plans, and elegance, elegance international, Yoann Lithium subsidiary of science and technology etc, ultimately promote subsidiary, management strength and scale for the lithium salt production capacity expansion project construction.

It is important to note that despite Yahua Group has the strong impact for the first camp, we should check the layout to know whether it is successful or not.

The page contains the contents of the machine translation.