Financial Services Association, March 20 (Reporter Zeng Chuchu) Affected by sharp fluctuations in lithium carbonate prices, the share of lithium salt revenue in Zangge Mining fell below 50%, and the construction of 50,000 tons/year lithium carbonate production capacity in Mamikuo is still one of the key tasks this year.

Cangge Mining released its 2023 annual report today. The company achieved operating revenue of 5.226 billion yuan, a year-on-year decrease of 36.22%; net profit attributable to shareholders of listed companies was 3.42 billion yuan, a year-on-year decrease of 39.52%.

The main business of Zangge Mining is mining mineral resources (non-coal mines). The main products are potassium chloride and lithium carbonate. Judging from the annual report, net revenue and profit of Cangge Mining both fell year on year, mainly due to falling prices and cost increases for both potassium chloride and lithium carbonate. The gross margin of the two businesses declined to varying degrees year on year. The overall gross margin fell 16.79 pcts year on year to 65.23% year on year

In the potassium chloride business, in 2023, Zangge Mining achieved a production plan of 1 million tons of potassium chloride per year and sold it normally to the outside world. The average sales price of the company's potassium chloride (tax included) was 2709.64 yuan/ton, down 28.60% year on year, and the average sales cost was 1088.83 yuan/ton, up 7.58% year on year. The gross profit margin was 56.20%, a year-on-year decrease of 14.73 pct.

In the lithium carbonate business, the company achieved the production target of 12,000 tons per year in 2023. The actual sales volume was 10314.5 tons, and the average sales price (tax included) was 21,900 yuan/ton, down 52.46% year on year; the average sales cost was 37,404.81 yuan/ton, up 18.76% year on year. The gross margin of the lithium carbonate business was 80.51%, a year-on-year decrease of 11.69pct.

Zangge Mining further explained in its annual report that the main reason for the increase in lithium carbonate sales costs is that in 2023, adsorbents that were normally worn out were added, increasing production costs. In addition, in 2023, construction of several technical improvement projects was completed and transferred to fixed assets, and depreciation expenses increased compared with last year.

Due to sharp fluctuations in lithium carbonate prices, Zangge Mining's share of lithium carbonate business revenue shrunk from 52.76% in 2022 to 37.89%. Zangge Mining mentioned in its annual report that the 2023 lithium carbonate sales situation fell short of expectations. The main reason was that lithium carbonate prices fluctuated greatly, and the company adjusted the annual sales plan according to market conditions. According to reports, the annual price of lithium carbonate showed a downward trend in 2023, from 500,000 yuan/ton at the beginning of the year to around 97,000 yuan/ton at the end of the year.

However, in terms of resource investment layout, the Tibetan mining industry will advance in 2023. In November 2023, Zangge Mining plans to acquire 34% of Guoneng Mining's shares through the Tibetan Youth Fund, a shareholding fund. Guoneng Mining owns two salt lakes, Jiezecha and Longmuzuo, and is currently in the process of payment of equity payments and project delivery.

On the Mamicuo Salt Lake Project, the annual report shows that there are currently 10 pre-mining license procedures for the Mamicuo Project. The approval process for 9 formalities has been completed, and the remaining 1 procedure is being processed. The company also stated during an investor exchange event in November last year that the first phase of the project with an annual output of 50,000 tons of lithium carbonate can be completed and put into operation before the end of this year.

Regarding this year's outlook, Zangge Mining revealed production and sales targets in its annual report. The company plans to produce 1 million tons of potassium chloride and sell 1.042 million tons in 2024; it plans to produce and sell 10,500 tons of battery-grade lithium carbonate. The first 50,000-ton lithium carbonate project at Mamicuo Salt Lake is one of the key projects. The company will speed up construction and put into operation as soon as possible.