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According to the finance agency on December 10 (Reporter Luo Yichen), in recent years, the price of minor mineral fluorite has continued to rise, prompting companies in the Industry to accelerate capacity expansion. Industry leader China Kings Resources Group (603505.SH) is placing its capacity in resource-rich Mongolia. Since the beginning of this year, it has announced investment plans twice, with a total investment expected to reach 0.347 billion to -0.374 billion yuan.

China Kings Resources Group announced tonight that the company plans to establish a wholly-owned subsidiary "Lacwest FILLC" in Mongolia through its holding subsidiary Zhejiang Huameng Holding Co., Ltd. as the project implementation entity, investing approximately 0.173 billion yuan to construct a 1500 tons/day fluorite beneficiation plant project. The expected construction period for the project is 24 months, and after reaching capacity, it can produce 0.18 million tons of fluorite concentrate annually.

It is reported that this beneficiation plant project is essentially a supporting extension of the Industry Chain for the fluorite mine developed by the company. In January of this year, China Kings Resources Group first entered Mongolia for mining, purchasing a 67% stake in the assets of "Minglida Limited Liability Company" for 0.134 billion yuan. The asset includes a mining license ("Mongolian Mining Rights") located in the eastern Gobi Province of Mongolia as well as corresponding land use rights. In addition to the equity acquisition, the company expects to invest an additional 40.2 million to -67 million yuan in construction funds, making the total amount of this transaction and project construction approximately 0.174 billion to -0.201 billion yuan.

Entering Mongolia for mining will significantly enhance the company's fluorite production capacity. China Kings Resources Group stated in the announcement that it will start production and reconstruction simultaneously in the Mongolia project while expanding adjacent resources, aiming to gradually achieve an annual production of high-grade lump fluorite and acid-grade fluorite powder of 0.2 million to -0.3 million tons within 1-2 years, and strive to reach the annual production target of 0.5 million tons of fluorite products within 3-5 years.

According to data, China Kings Resources Group currently has a total fluorite production capacity of 1.1 to 1.3 million tons, among which the Baogang project has a capacity of 0.7 to 0.8 million tons, and single mines have 0.4 to 0.5 million tons. The company had stated in 2021 that it aimed to achieve a fluorite production capacity of 1.5 million tons within five years. If calculated based on the Mongolia project’s capacity of 0.5 million tons, the company's current capacity layout plan has been basically realized.

It is worth noting that when the company entered Mongolia for mining at the beginning of the year, it had anticipated that the project could produce approximately 0.15 million tons of high-grade raw ore primary selected mineral products this year. At that time, downstream beneficiation projects had not yet started, and local processing capabilities were inadequate. This portion of the product was initially planned for direct sale or to be transported domestically for further processing into powder for sale. However, from the company's latest statements, it seems that although the pre-treatment project construction is basically complete, the contribution to performance is expected to materialize next year.

As a minor mineral, fluorite has performed impressively in recent years. According to a report from Longzhong News, from 2020 to 2024, the average price of fluorite is expected to rise from 2,670 yuan/ton to 3,500 yuan/ton, an increase of 31%. The average annual price continues to rise, and the bullish signs on the supply side are becoming increasingly evident. In the next five years, fluorite profits are expected to continue rising, with self-owned mining and processing plants extracting raw ore for flotation, keeping costs relatively low compared to externally sourced fluorite ore, thus providing more considerable profits.