Source: Visual China
On the evening of December 26, Huati Technology (603679. SH) announced that the company intends to subscribe for Mozambique KYUSHU RESOURCES, SA (hereinafter referred to as "Kyushu Resources Company") with an additional registered capital of 570,000 Mozambican meticals through its holding subsidiary Huati International Energy for US$3 million, and after the completion of the capital increase, the registered capital of Kyushu Resources Company will be changed to 67 million Mozambican meticals, of which Huati International Energy holds 85% of the shares.
Kyushu Resources owns 100% of the lithium mine in the 11682 project in Mozambique, and so far the company has no assets and no liabilities other than the 11682 prospecting right.
After the completion of the capital increase, Huati International Energy will indirectly hold 85% of the exploration rights of Kyushu Resources Company, forming control over the mining, crushing, processing and transportation of lithium mine No. 11682 in Mozambique.
At the moment when the "rush of mines" of Chinese enterprises has swept Africa, Huati Technology's $3 million entry into the game aims to strengthen the layout of lithium resources, but it has lagged behind the "crab eaters", and 14 African lithium mines are about to be produced in this round of lithium cycle.
In addition, it is worth mentioning that the English name "KYUSHU" of Kyushu Resources Company is generally translated as Kyushu, Japan, such as "KITA KYUSHU" Kitakyushu. The company, which was registered in August this year, is 100% owned by two Mozambican natural persons, and after the completion of the transaction, their shareholding was reduced to 15%, and Huati International Energy has an absolute controlling stake.
Increased capital in Mozambique lithium mine
The main purpose of Huati Technology's capital increase in Jiuzhou Resources is to control its lithium project, which is located in the Gile area of Zambesí Province, Mozambique, and the exploration right No. 11682 is the main asset of Jiuzhou Resources.
It is reported that Kyushu Resources is responsible for the operation of lithium mine-related projects in Mozambique, and owns 100% of the lithium mine in Mozambique 11682 project. Kyushu Resources Co., Ltd. obtained the prospecting right certificate of the 11682 project on December 15, which is valid until December 15, 2028, with an area of 18,621.44 hectares and a total distance of 350km from the mining area to Nacala.
Nacala is one of Mozambique's main ports, but it is worth noting that lithium transportation from Mozambique and even Zimbabwe is more likely to pass through the port of Beira in the center of the country, which has the best infrastructure by highway and rail links.
Source: Google map
From the perspective of mineral resources, according to the "Mozambique 11682 Project Feasibility Study Report" (hereinafter referred to as the "Report") issued by Jingxiu Engineering Consulting Co., Ltd., the 11682 project mining area contains a total of 25 pegmatites, of which only 7 have been trenched and drilled to expose, with an estimated ore volume of 5.2022 million tons of 333 Li20 and an average grade of 0.76% Li20, and a prospective ore volume of 1.2406 million tons of 334 Li20 with an average grade of 0.91% Li20. The total ore resources of 333+334 are 6,442,800 tons.
Compared with the hot lithium mine in western Sichuan in China, the average grade of the 11682 project mining area is not high. However, in terms of transportation, the mining area is conveniently located with a total of 65 kilometers of dirt roads and 285 kilometers of asphalt roads from the port of Nacala, most of which is the N1 road in Mozambique.
According to PowerChina's official website, the highway is the main artery running through the north and south of Mozambique and the "lifeline" of economic development in the central provinces of Mozambique, and is partly undertaken by the 11th Hydropower Bureau of the China Power Construction Group.
Huati Technology disclosed that 333 and 334 indicate the level of geological reserves: 333 can be used for development and utilization plans, and 334 is prospective reserves. In response to the project feasibility study report issued by Jingxiu Engineering Consulting Co., Ltd., the company has entrusted Hunan Geological Exploration Institute Co., Ltd. to verify the resource reserves.
The consulting firm concluded that after the lithium carbonate price does not fluctuate significantly and the 11682 project reaches full capacity, the operating income is expected to reach US$103.6 million, the total profit will be US$45.584 million, and the financial after-tax internal rate of return (IRR) of investment activities will be 212.17%.
All this needs to be based on the smooth follow-up work such as the application for mining rights. Some market participants pointed out that Huati International Energy currently only holds a prospecting license, and the grade of the ore is average, and it is likely that it will need to invest in the construction of a concentrator.
Huati Technology also pointed out at the end of the announcement that the follow-up development and construction of the 11682 project is greatly affected by the local macro environment, industry policies and laws and regulations in Mozambique, in addition to facing risks such as falling lithium concentrate prices, exchange rate fluctuations, and mining rights applications.
For example, Tianhua Xinneng suffered a setback in Zimbabwe next door this year. Shares of Premier African Minerals Limited, which is listed on the London Stock Exchange, plunged more than 40 percent on June 26 after the company said its Zulu lithium-tantalum project in Zimbabwe was due to force majeure and that production at the processing plant had been defective. The company said in a statement that the plant is currently unable to produce enough spodumene concentrate to meet the conditions of the offtake agreement with Tianhua New Energy.
It is difficult to catch up with the heat of lithium mines in Africa
Although it seems "fashionable" to go to Africa to "buy mines", in fact, Huati Technology has been half a beat slower. Previously, under the "rush for ore", CITIC Securities called Africa "the main arena for the next round of lithium capacity expansion" in the research report, after all, projects such as Manono lithium mine, Goulamina lithium mine and Arcadia lithium mine are all world-class lithium resources.
Therefore, Chinese-funded enterprises have already taken the lead and become the absolute protagonists on this stage. The giants that have been laid out in advance include Ganfeng Lithium (002460. SZ), Tianhua New Energy (300390. SZ), CATL (300750. SZ), Sinomine Resources (002738. SZ), Shengxin Lithium Energy (002240. SZ), Kanglongda (603665. SH), Tianyi Lithium, etc.
For example, the world's third-largest lithium project, Manono/Kitotolo in the Congo, is currently mainly held by AVZ Mineral and Tianhua Times, and the shareholders behind Tianhua Times are Tianhua New Energy and CATL.
Kanglongda has a three-year underwriting right for the Bougouni mine in Mali, which can be renewed upon expiration, with an area of 97.2 square kilometers, a grade of 1.11%, a total resource of 21.31 (million tons), and an exploration area of 350 square kilometers.
Ganfeng Lithium owns 50% of the offtake rights to the Goulamina mine in Mali, covering an area of 100 square kilometers, grading 1.45% and a total resource of 108.5 (million tons), which has started construction on June 3 and is only more than 20 kilometers away from Bougouni, Mali. In addition, Ganfeng Lithium has also invested in the Manono mine in the Democratic Republic of the Congo (DRC), covering an area of 188 square kilometers, with a grade of 1.58% and a total resource of 400 (million tons).
Sinomine Resources has been the exclusive agent in China for 10 years in the Bikita mining area in Zimbabwe, with a resource of 10.8 (million tons) and a grade of 1.40%, and has invested in the Arcadia mine in Zimbabwe, covering an area of 10 square kilometers and a resource of 72.7 (million tons) with a grade of 1.11%. Shengxin Lithium Energy invested in the Manono mine in the Democratic Republic of the Congo (DRC), covering an area of 188 square kilometers, with a resource of 400 (million tons) and a grade of 1.58%.
Huati Technology, which is long overdue, has now completed the first step, and the investment of 3 million US dollars is only a drop in Taicang in the "lithium industry", after all, the total value of the Zimbabwe lithium project acquired by Huayou Cobalt, Sinomine Resources and Shengxin Lithium Energy in the past year is as high as 678 million US dollars.
According to Huafu Securities, Africa is expected to produce a total of 14 lithium projects in this round of lithium cycle, and the lithium projects in Zimbabwe are all located in Zimbabwe, namely Bikita, Sabi Star, Arcadia, Zulu, and the projects under construction or exploration include Kamativi in Zimbabwe, Castle Peak Zimbabwe Lithium Project, Sandawana, Bougouni and Goulamina in Mali, Ewoyaa in Ghana, and Democratic Republic of the Congo (DRC). Manono, Karibib and Uis in Namibia, Kenticha project in Ethiopia.
Obviously, Mozambique is not the core arena of this wave of lithium competition, except for its hub seaport. (This article was first published on the Titanium Media APP, by |.) Huang Tian)