On December 30, Salt Lake announced that the company intends to purchase 51% of Minmetals Salt Lake Co., Ltd. (Hereinafter referred to as "Minmetals Salt Lake") held by its controlling shareholder, China Salt Lake Industry Group Co., Ltd. (Hereinafter referred to as "China Salt Lake") by paying cash at a transfer price of RMB 4.605 billion. Minmetals Salt Lake will become a holding subsidiary of Salt Lake Co., Ltd. and be included in the scope of consolidated statements.
The announcement shows that Minmetals Salt Lake was previously held 51% and 49% by China Salt Lake and Qinghai Liangcheng Mining Co., Ltd. ( a wholly-owned subsidiary of Ganfeng Lithium Industry ). After the completion of the transaction, Salt Lake shares will hold 51% of Minmetals Salt Lake, and the number of shares held by Qinghai Liangcheng Mining Co., Ltd. will remain unchanged. The main products of Minmetals Salt Lake are lithium carbonate, lithium phosphate, lithium hydroxide and potassium chloride. At present, the production capacity of lithium carbonate is 15,000 tons/year, the production capacity of lithium phosphate is 2,000 tons/year, the production capacity of lithium hydroxide is 1,000 tons/year and the production capacity of potash fertilizer is 300,000 tons/year.
Minmetals Salt Lake is mainly engaged in the development of lithium and potassium resources in salt lakes through Yiliping Salt Lake. Yiliping Salt Lake is located in the central and western part of the salt lake belt in the middle of the Qaidam Basin, with a mining area of 422.73 square kilometers. It is a large comprehensive salt lake deposit with liquid lithium as the main component and boron, potassium, magnesium and other beneficial components. According to the Annual Report on 2024 Reserves of Yiliping Salt Lake Lithium Mine of Qinghai Lenghu Administrative Committee, by the end of 2024, Minmetals Salt Lake has 1.6459 million tons of lithium chloride resources and 14.6311 million tons of potassium chloride resources. The operating income of the Company in 2024 is RMB 2.084 billion, and the net profit attributable to the parent company is RMB 690 million; from January to August in 2025, the operating income of the Company is RMB 798 million, and the net profit attributable to the parent company is RMB 316 million.
It is worth noting that although the net profit of Minmetals Salt Lake has been decreasing year by year since 2022 due to the impact of the lithium carbonate price cycle, according to the announcement, the book value of the company's owner's equity is 1.996 billion yuan, the evaluation value is 9.030 billion yuan, the added value is 7.034 billion yuan, and the net profit of Minmetals Salt Lake has been reduced year by year. The appreciation rate was 352.42%, mainly due to the substantial appreciation of the mining right of its core asset, Yiliping Salt Lake, by about 6.9 billion yuan.
According to the announcement, China Salt Lake promises that in the three fiscal years from 2026 to 2028, the audited net profit attributable to the shareholders of the parent company after deducting non-recurring gains and losses will not be less than 668 million yuan, 692 million yuan and 745 million yuan, respectively, and the cumulative net profit commitment in three years will not be less than 2.105 billion yuan. If Minmetals Salt Lake fails to achieve the corresponding performance target during the commitment period, China Salt Lake will compensate Salt Lake Shares in cash according to the calculation method stipulated in the Equity Transfer Agreement, and the compensation amount will be determined according to the difference between the actual net profit and the committed net profit.
Salt Lake Co., Ltd. is located in Chaerhan Salt Lake, the largest soluble potassium and magnesium salt deposit in China and the second largest in the world, and is in the leading position in the world in the processing of potassium chloride and the large-scale production technology of potassium and lithium extraction from salt lakes. The company is the largest potash fertilizer industrial production base in China, with an annual production capacity of 5 million tons of potash fertilizer, accounting for about 35% of the domestic annual output.
In addition, the company's Lanke lithium industry has formed 30000 tons/year lithium carbonate production capacity, and another 40000 tons/year basic lithium salt integration project is in progress. After the acquisition, the two enterprises will realize the complementary integration of the high-quality resources of Chaerhan Salt Lake and Yiliping Salt Lake.
The acquisition is also an important step for Salt Lake Co., Ltd. to achieve the annual production capacity target of 10 million tons of potash fertilizer and 200,000 tons of lithium salt. After the target company is injected into the listed company, it will further expand the company's potassium and lithium resources control scale and production and marketing scale, and enhance the company's industry influence and market voice in the field of salt lake resources development. After the completion of the acquisition, the two sides can also fully release the synergistic effect of comprehensive development and utilization of salt lake resources, scientific and technological innovation and other fields, effectively enhance the core competitiveness and industrial attractiveness of salt lake shares, help the company to further play a leading role, and accelerate the construction of world-class salt lake industrial base.
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