Financial Associated Press, October 27 (Reporter Xing Qixin)Hainan Mining (601969.SH), one of the country's largest iron ore producers, turned a profit in the third quarter of the year due to a sharp rise in iron ore and oil and gas production.

In the third quarter, Hainan Mining's operating income was 1.3 billion yuan, up 24.33% from the same period last year; the net profit of shareholders belonging to listed companies was 178 million yuan, up 10.55% from the same period last year; and 165 million yuan was deducted from non-return net profit, an increase of 42.3% over the same period last year.

As for the reason for the increase in net profit, Hainan Mining insiders told the Financial Associated Press that it was mainly due to the increase brought about by the increase in oil and gas business. "the increment of oil and gas mainly comes from the increment of the star anise field. In April, a new dehydrocarbon supercharging project was put into operation, and production actually began to reach production in June, so it was particularly obvious in the third quarter, and the volume nearly doubled. In the future (star anise field) will maintain a daily output of more than 2 million square meters."

In the third quarter, Hainan Mining produced 1.6754 million barrels of oil and gas equivalent, an increase of 44.91 per cent over the same period last year. Of this total, natural gas production increased by 98.25% over the same period last year. The original iron ore output was 1.561 million tons, up 17.91 percent over the same period last year, while the finished ore output was 681400 tons, up 16.86 percent over the same period last year.

As for the increase in iron ore, the insider said it was mainly due to poor performance in the third quarter of last year. "there were both typhoons and outbreaks in Hainan in the third quarter of last year. In July and August, the whole of Hainan was probably in a state of strict control, so it appeared to be very high in the third quarter of this year."

In addition, Hainan Mining announced that the technical transformation project of suspension magnetization roasting of Shilu iron ore has been completed and the oven was officially started on October 13. In the follow-up, it will enter the process of feeding, debugging and trial production, and gradually realize the connection with the existing mineral processing production line. The project is expected to be put into production in the first half of 2024.

The 20,000 ton Lithium hydroxide Project (Phase I) has also received a loan of 700 million yuan from Hainan Rural Credit Cooperatives, and the company has completed the signing of the relevant agreement in August 2023 and began to withdraw money in September.

But Hainan Mining does not seem to be doing as well overseas as its domestic business this year, with the Locke oil acquisition plan delayed since the beginning of the year.

In recent months, the deadline for this transaction has been extended to December 30, 2023 or other dates agreed by the parties in writing, as confirmed in writing by Hainan Mining and the parties.

It is worth noting that under the share purchase Agreement, Hainan Mining has paid RMB 81.663 million in sincerity money to the related party designated by Transcendent Resources, and Transcendent Resources has delegated all the voting rights corresponding to the 49% stake in Locke Oil to Xinhai, accordingly, Hainan Mining has included the 100% interest in Locke Oil in the consolidated statement since January 2023.

The progress of delivery in the acquisition of Bougouni lithium assets is also due to changes in the local situation.

According to the latest announcement, Xinmao Investment and KOD and KMUK recently signed a supplementary agreement on waiving the original delivery conditions of "transfer of mining rights from FM to LMLB" and transfer of SogolaNord exploration rights held by KOD from IGM to FM, and added terms of obligations of the counterparty after delivery and commitments and safeguards of the counterparty.

The insider told the Financial Associated Press, "(Mali) has made some policy adjustments, so this delivery has not been completed." The supplementary agreement can avoid many disadvantages, and the delivery of the entire project will be accelerated later, and the specific delivery date will have to be officially announced. The supplementary agreement between Locke Oil and Bougouni Lithium Mine will not adversely affect Hainan Mining. "