Yahua Group Signs Five-Year Spodumene Concentrate Procurement Agreement to Ensure Lithium Resource Supply

Yahua Group ( 002497 ) On the evening of March 25, the company announced that it recently signed a “Purchase and Sale Agreement” with MGLIT EMPREENDIMENTOS LTDA (referred to as “MGLIT Company”). Yahua Group will purchase spodumene concentrate from MGLIT Company within five years after MGLIT Company achieves stable production of lithium spodumene concentrate.

According to the agreement, MGLIT Company shall sell and deliver at least 120k dry metric tons of spodumene concentrate to Yahua Group each contract year. The two parties agreed that the minimum purchase price is USD 1,000 per dry metric ton (based on a lithium oxide content of 6%), with adjustments based on the actual lithium oxide content. The validity of the aforementioned agreement starts from the first shipment of products and lasts for five years. The shipment schedule will be formulated based on MGLIT Company’s achievement of stable production by January 31, 2028.

It is worth noting that Yahua Group will provide MGLIT Company with a prepayment financing of USD 12 million. The company stated that the signing of this agreement will bring multiple resource guarantees for lithium salt product production and will have a positive impact on future operational results.

As a leading lithium salt manufacturer, Yahua Group has formed a diversified raw material supply system with self-controlled mines and external purchases, establishing a stable lithium resource guarantee system. Regarding self-controlled mines, the company’s Kamativi lithium mine projects in Zimbabwe, Phase 1 and Phase 2, have been fully completed in 2024, currently capable of processing 2.3 million tons of ore annually, with products gradually shipped back to China for production; additionally, the company has obtained priority supply rights through equity participation in the Lijiagou lithium mine in Sichuan. For external purchases, the company secures lithium ore sales rights through long-term agreements with resources such as Pilbara in Australia, DMCC in Africa, and Atlas in Brazil. These lithium resources can meet the company’s lithium salt production capacity needs.

Yahua Group stated that it will continue to improve its lithium resource self-sufficiency. The company is actively promoting the investigation of high-quality lithium resources domestically and abroad and will strictly follow principles of multi-dimensional research, careful decision-making, and prudent advancement of related matters.

Since the second half of 2025, lithium salt market prices have rebounded, with positive feedback from some terminal product markets, driving a significant increase in Yahua Group’s product sales in the third and fourth quarters. The earnings forecast shows that the company expects a net profit of RMB 600 million to RMB 680 million in 2025, a year-on-year increase of 133.36% to 164.47%; net profit after deducting non-recurring gains and losses is expected to be RMB 660 million to RMB 720 million, a year-on-year increase of 302.48% to 339.07%.

Yahua Group’s cooperation model with clients mainly involves signing long-term agreements, with high-quality market resources. Its foreign clients include Tesla, LGES, LGC, SK On, Panasonic, and others; domestic clients include CATL, Zhenhua New Materials, and Xiamen Tungsten New Energy. In the first half of 2025, over 90% of the company’s lithium business revenue came from leading enterprises.

Currently, China’s lithium industry is at a critical stage of marginal adjustment in supply and demand, with prices stabilizing and rebounding. From the market perspective, since the beginning of 2026, the lithium carbonate market has shown wide fluctuations, with the price center significantly higher than that of the same period in 2025. As of March 25, the main futures contract closing price for lithium carbonate was RMB 159.1k per ton, indicating some market sentiment recovery.

Most industry insiders believe that current inventories across the entire industry chain are at their lowest in nearly three years, with strong downstream replenishment willingness, supporting a long-term upward shift in lithium prices. In the long run, accelerated global energy transition is driving the electrification of vehicles, coupled with rapid development in the energy storage industry, leading to sustained growth in lithium resource demand. Meanwhile, domestic lithium companies are entering intensive overseas deployment, seizing high-quality global lithium ore resources through various means, which will continue to enhance industry profitability stability.