Two big mining giants, big news.

Yesterday evening, Zangge Mining announced that the company's shareholders intend to transfer 24.72% of their shares to Zijin Mining, which may lead to a change in their control.

Affected by this, trading of the company's shares will be suspended starting today. The suspension period is expected to be no more than 2 trading days.

As of yesterday's close, the stock price of Zangge Mining closed up 6.38% to 29.5 yuan/share, with a total market value of 46.62 billion yuan.

Zijin Mining opened today with an increase of more than 2% to 16.26 yuan/share, with a total market value of 432.2 billion yuan.

Specifically, according to the Zangge Mining announcement, the company's controlling shareholder, Zangge Venture Capital, and its co-operator and second-largest shareholder, Xinsha Hongyun Investment, are planning to transfer some of their shares to Zijin Mining or its holding subsidiary. The total share transfer ratio is expected to account for 24.72% of the company's total share capital, which may involve a change in the company's control.

As of September 30, 2024, Zijin Mining's wholly-owned subsidiary holds 0.85% of the company's shares. If the transaction goes smoothly, Zijin Mining and its subsidiaries may hold more than 25% of the company's shares.

Trading of Zangge Mining shares has been suspended since the opening of the market on the morning of January 10. It is expected that trading will be suspended for no more than 2 trading days.

According to a reminder from Zangge Mining, there is still uncertainty about whether the transaction can finally be completed and the implementation results. Investors are kindly requested to pay attention to subsequent announcements and pay attention to investment risks.

The lithium resource landscape continues to expand

According to data, Zangge Mining is an enterprise focusing on the development and comprehensive utilization of mineral resources. The company's main products are potassium chloride and lithium carbonate, which is the second largest domestic manufacturer of potassium chloride and the world's leading salt lake lithium extraction technology process.

As a mining company, the performance of Zangge Mining fluctuates with the trend of commodity prices such as lithium carbonate and potassium chloride.

From 2020 to 2023, Zangge Mining achieved net profit of 0.229 billion yuan, 1.427 billion yuan, 5.655 billion yuan, and 3.42 billion yuan, or -25.75%, 523.6%, 296.19%, and -39.52% year-on-year.

In the past two years, the price of lithium carbonate has continued to decline, and the performance of Zangge Mining has also been affected to a certain extent.

In the first three quarters of last year, Zangge Mining achieved operating income of 2.324 billion yuan, a year-on-year decrease of 44.53%; net profit to mother was 1.868 billion yuan, a year-on-year decrease of 37.08%.

Meanwhile, Zijin Mining is a large mining group that mainly explores and develops gold, copper, zinc and other basic metal mineral resources. In recent years, it has increased its layout on lithium resources through mergers and acquisitions.

Since 2021, Zijin Mining began to lay out the field of lithium resources. Currently, it has deployed “two lakes and two mines”, including the 3Q Salt Lake in Argentina, Lagocuo Salt Lake in Tibet, the Xiangyuan lithium polymetallic mine in Daoxian County, Hunan, and the Manono lithium mine.

As of the first half of 2024, Zijin Mining's lithium carbonate equivalent equity resources were 13.4656 million tons, and plans to generate 0.25-0.3 million tons of lithium (LCE) production capacity by 2028.

However, due to delays in project license processing and continued low lithium carbonate prices, Zijin Mining has now delayed the commissioning of the 3Q project in Argentina and the Lagocuo project in Tibet until 2025.

Zijin Mining said that in the future, it will actively promote the construction of the 3Q Salt Lake in Argentina, Lagocuo Salt Lake in Tibet, and the Xiangyuan lithium mine in Hunan, and start exploration and development of the northeastern Manono lithium mine. The completion and completion of the “Two Lakes and Two Mines” project will make the company one of the most important lithium companies in the world.

In terms of lithium resources, Zangge Mining has a mining rights area of 724.35 square kilometers of Qinghai Chaerhan Salt Lake, with an annual production capacity of 0.01 million tons of lithium carbonate.

Through this merger and acquisition of Zangge Mining, Zijin Mining's lithium resource footprint will be further expanded.