Xiamen Tungsten acquires equity stakes in two mining companies in Jiangxi

This article is reproduced from: Straits Herald

Targeting upstream tungsten mine resources

Xiamen Tungsten Industry acquires equity in two Jiangxi mining companies

Herald News (Reporter Wu Qiang) After announcing the acquisition of 69% of Jiujiang Dadi Mining on March 24, Xiamen Tungsten Industry issued another announcement on March 25, stating that in order to increase the self-sufficiency rate of tungsten resources, the company intends to acquire 30.17% of Jiangxi Jutong Industrial Co., Ltd. (referred to as “Jiangxi Jutong”).

According to the announcement, Xiamen Tungsten Industry, Fujian Industrial Control Group, and Jiangxi Tungsten Industry Holding Group signed a tripartite cooperation agreement, and Fujian Industrial Control Group agreed to transfer 30.17% of Jiangxi Jutong’s equity from its subsidiary to the company. The transaction price for this equity transfer is based on the total equity value of Jiangxi Jutong, which is approximately 1.966 billion yuan, and will ultimately be subject to the evaluation results reviewed and recorded by the Fujian Provincial State-owned Assets Supervision and Administration Commission.

Xiamen Tungsten Industry is interested in Jiangxi Jutong because of its tungsten mine assets. The announcement shows that Jiangxi Jutong is the operator for the development and construction of the Dahuatang tungsten mine, holding mining licenses for the Dahuatang North and South tungsten mines. The Dahuatang North tungsten mine has a production capacity of 6.6 million tons/year, and as of the end of November 2017, it has a remaining industrial mineral tungsten ore quantity of 502,215 thousand tons, with a WO_3 metal content of 843,300 tons; the Dahuatang South tungsten mine has a production capacity of 1.65 million tons/year, and as of December 31, 2020, it has a remaining industrial main mineral tungsten ore quantity of 180,457 thousand tons, with a WO_3 metal content of 370,283 tons.

Xiamen Tungsten Industry stated that as the company’s capacity in the deep processing and application fields of the tungsten industry chain’s backend, such as hard alloys, cutting tools, and tungsten wires, continues to increase, the company’s demand for tungsten resources grows year by year. Currently, the tungsten concentrates produced by its three operating tungsten mining companies and one under-construction tungsten mining company can only meet part of the demand. Acquiring Jiangxi Jutong will help increase mineral reserves and enhance the self-sufficiency rate of tungsten resources.

In addition to the proposed stake in Jiangxi Jutong, the announcement released by Xiamen Tungsten Industry on March 24 indicates that the company intends to acquire 69% of Jiujiang Dadi Mining for approximately 295 million yuan in cash. Jiujiang Dadi Mining holds the detailed exploration mining rights certificate for the Yangshidian copper-molybdenum polymetallic mine in Xiushui County, Jiangxi Province, and the mining license for the Kunshan tungsten-molybdenum mine. Upon completion of the transaction, Xiamen Tungsten Industry will become the controlling shareholder of Jiujiang Dadi Mining.