① Lithium prices are at the “bottom”. At the annual results meeting, some investors asked about the impact of low lithium prices on the company's lithium mine construction. Niu Guofeng, chairman of Dazhong Mining, said, “We will not stop (stagnate) anything, and we will speed up construction.” ② According to the company's disclosure, the mining, selection and metallurgy process of the Hunan lithium mine project is progressing simultaneously. In view of the abundant lithium salt production capacity in Sichuan, the Sichuan lithium mine project mainly concentrates on mining and mineral processing, and there is no smelting capacity for the time being.
Financial Services Association, March 19 (Reporter Zeng Chuchu) Lithium prices are at the “bottom”, and the capital market is focusing on the progress of the Dazhong Mining (001203.SZ) lithium project. At the annual results meeting held today, some investors asked about the impact of low lithium prices on the company's lithium mine construction. Niu Guofeng, chairman of Dazhong Mining, said, “We will not stop (stagnate) anything, and we will speed up construction.” According to the company's disclosure, the mining, selection and metallurgy process of the Hunan lithium mine project is progressing simultaneously. In view of the abundant lithium salt production capacity in Sichuan, the Sichuan lithium mine project mainly concentrates on mining and mineral processing, and there is no smelting capacity for the time being.
According to the 2023 report of Dazhong Mining, the company's main products are iron powder and pellets, which are mainly used as raw materials for steel manufacturers to smelt steel. In 2023, the company's revenue was 4.03 billion yuan, of which iron powder and pellets accounted for 93.77% of sales revenue. In addition to iron ore, in April and November of last year, the company successively obtained prospecting licenses for the Jijiashan lithium mine in Hunan and the Markangada lithium mine in Sichuan.
In the past two years, lithium carbonate has gone from shortage to surplus. Since last year, the price of lithium carbonate has dropped by more than 500,000 yuan/ton. According to today's data from the Shanghai Steel Union, the average price of battery-grade lithium carbonate is 114,000 yuan/ton. At the annual results briefing held today, investors also focused on the construction progress of lithium projects in Dazhong Mining, where lithium prices are relatively low.
Regarding the impact of low lithium prices, Niu Guofeng responded that the low market is a good thing for project construction. “In fact, the trough period was a good opportunity for construction. First, suppliers took the initiative to come to the door, the price was very low, and the overall construction schedule and manufacturing cycle were very short; second, the industry had abundant talents, and some companies stopped production, making it easier for me to absorb higher quality talents. Looking at the medium to long term, we think lithium is a cyclical variety. When the market is low, you need a lower cost than others; you can survive; when the market is good, you are big, and you may make money. So we won't have any standstill (stagnation), and we'll speed up construction.”
Niu Guofeng said that last year, the company successively obtained prospecting rights for the Jijiaoshan lithium mine in Hunan and the Jiada lithium mine in Sichuan, and has completed the comprehensive planning and process route determination for the two mines. Currently, the first phase of the Hunan 20,000 tons/year lithium carbonate project has been successfully delisted in February 2024. The comprehensive recycling of 12 million tons of lithium-containing resources per year has been established, and the Hunan lithium mining, selection and metallurgy process is progressing simultaneously.
Compared to the Hunan lithium mine, the Sichuan Jiada lithium mine is progressing relatively slowly. Niu Guofeng said that the Sichuan lithium mine plans to do a good job of prospecting in the first mining area this year. The mining living area, beneficiation plant, and tailings depot will be built simultaneously. Given that Sichuan's smelting capacity is relatively rich, smelting capacity will not be built first; it will mainly concentrate on mining and mineral processing.
“It is hoped that the preliminary work of exploration and conversion in the first mining area will be completed this year, while beneficiation and related tailings depot work will be completed. Construction will be fully started this year.” Niu Guofeng said.
Regarding investors' comments on whether exploration and conversion of lithium ore in Sichuan is difficult, Lin Pusheng, general manager of Dazhong Mining, further explained that the exploration area of lithium ore in Sichuan is quite large, and it will take a long time to fully explore. “Therefore, we are planning to remine the first mining area first, which is already included in this year's plan. We think this is relatively easy (to achieve).”