Zijin Mining Group (601899.SH) plans to spend over one hundred billion yuan to acquire a 24.82% stake in Zangge Mining to obtain controlling rights, significantly enriching its reserves of potassium, copper, and lithium.

Zijin Mining Group (601899.SH) announced that its wholly-owned subsidiary, Zijin International Holdings Limited (referred to as "Zijin International Holdings"), signed a "Agreement on the Transfer of Control Rights of Zangge Mining Co., Ltd." with Tibet Zangge Entrepreneurship Investment Group Co., Ltd. (referred to as "Zangge Entrepreneurship Investment"), Sichuan Yonghong Industrial Co., Ltd. (referred to as "Sichuan Yonghong"), Lin Jifang, and Ningbo Meishan Bonded Port New Shahun Investment Management Co., Ltd. (referred to as "New Shahun"). Zijin International Holdings plans to acquire a total of 3.92 billion shares of Zangge Mining Co., Ltd. (referred to as "Zangge Mining") held by the aforementioned parties at a price of 35 yuan per share, corresponding to a 24.82% equity stake, with a total transaction amount of 13.729 billion yuan, on January 16, 2025. Prior to this transaction, the Company already held a 0.18% equity stake in Zangge Mining through its wholly-owned subsidiary. Following the completion of this transaction, the Company's overall equity stake will reach 25%. The combined holding of Zangge Entrepreneurship Investment, Sichuan Yonghong, Lin Jifang, and other parties with concerted action will decrease to 20%, and New Shahun's holding will decrease to 9.89%. Based on the aforementioned share transfer, together with the parties' arrangements for the governance structure of Zangge Mining after the completion of the transaction, Zijin International Holdings will obtain control of Zangge Mining and achieve financial consolidation. Zangge Entrepreneurship Investment and New Shahun have made commitments regarding not seeking control rights and voting rights. It is reported that the core assets of Zangge Mining include 100% equity in the Qinghai Chaerhan Salt Lake Project, 70% equity in the Laos Vientiane Baoe Potash Project and the Setani County Potash Project, 24.01% equity in the Tibet Mamico Salt Lake, 21.09% equity in the Tibet Longmu Salt Lake and Jieze Chaka Salt Lake, and 30.78% equity in the Tibet Julong Copper Mine. This acquisition will significantly enhance the Company's main metal varieties copper and lithium resource reserves, and add strategic potash resource reserves related to national food security. Potash fertilizer is an important and scarce agricultural production material in China. Zangge Mining started with the development of potash resources, with an estimated resource of over 1 billion tons of potassium chloride, making it the second largest potassium chloride producer in China. Its future incremental project, the Laos Vientiane Potash Project, has huge resource reserves and, once successfully developed, will contribute to China's strategic mineral resource security and position the Company as an important potash producer. This acquisition will help the Company achieve absolute control of the Julong Copper Mine and improve the operation and management efficiency of the mine. The investment returns from the Julong Copper Mine contribute significantly to Zangge Mining's profits. With the second phase expansion of the Julong Copper Mine nearing completion and the third phase research steadily progressing, the completion of the acquisition against the backdrop of capacity and efficiency realizing benefits is promising. In addition, the Company will be able to fully absorb Zangge Mining's salt lake development experience and low-cost lithium extraction technology, achieve efficient synergy between the two companies' salt lake projects in Tibet, cultivate regional integration capabilities, and promote the development of the Company's salt lake projects in Ragu, Tibet, the 3Q Salt Lake in Argentina, and other lithium mining projects. The Company commits to taking various measures, including but not limited to asset restructuring, business adjustments, and commission management, within 60 months of obtaining control of Zangge Mining to address issues related to competition or potential competition in the lithium mining business with Zangge Mining. The Company has world-class lithium resource reserves in its "two lakes and two mines" strategy, and according to its plan, it aims to achieve a production capacity of 250,000 to 300,000 tons of lithium carbonate equivalent by 2028, supplemented by Zangge Mining's future production capacity. This transaction is expected to propel the Company to become one of the most important lithium producers globally.