Core Viewpoint - In 2024, China's iron ore production and import statistics indicate a slight increase in domestic production but a significant reliance on imports, highlighting challenges in achieving the "Cornerstone Plan" targets for 2025 [1][8]. Group 1: Production and Import Data - In 2024, China's iron ore raw ore production reached 104.194 million tons, a year-on-year increase of 1.2%, while iron concentrate production was 28.402 million tons, a decrease of 1.5% [1]. - Iron ore imports reached 123.655 million tons, a year-on-year increase of 4.9%, accounting for approximately 72% of global iron ore imports, with a dependency rate of 81.3% [1]. Group 2: "Cornerstone Plan" Goals - The "Cornerstone Plan" aims to achieve a domestic iron concentrate production of 37 million tons, scrap consumption of 30 million tons, and overseas equity ore production of 22 million tons by 2025 [1]. - As of January to June 2025, domestic iron concentrate production was only 13.775 million tons, a year-on-year decrease of 7.97%, indicating significant challenges in meeting the "Cornerstone Plan" targets [1][8]. Group 3: New Mining Projects - Six new iron ore mining projects are expected to contribute an additional 6.565 million tons of iron concentrate production in 2025 [2]. - The Taihe Iron Mine expansion project aims to increase its processing capacity to 10 million tons, with an expected annual production of 360,000 tons of iron concentrate upon completion [2]. - The Xichang Mine's 5 million tons ultra-poor comprehensive recovery project is expected to produce 50,000 tons of iron concentrate annually, contributing positively to the "Cornerstone Plan" [3]. Group 4: Challenges in Achieving Production Targets - The decline in iron ore prices has reduced the willingness of domestic mining companies to invest in new mining projects, as the average cost of domestic iron ore extraction is significantly higher than that of imported ore [9][10]. - Environmental policies and resource integration efforts have raised entry barriers for new mining projects, leading to increased capital expenditures for compliance [11]. - The fixed asset investment growth rate in the iron ore mining sector is relatively low compared to other mining sectors, further limiting capacity expansion [12]. Group 5: Overall Outlook - The combination of declining iron ore prices, stringent environmental regulations, and low investment growth suggests that the iron ore industry is undergoing a transition that may hinder the achievement of the "Cornerstone Plan" targets for 2025 [13].

Core Insights - China's steel industry faces significant resource supply challenges despite having over 20 billion tons of iron ore reserves, with over 80% being low-grade ore and high extraction costs leading to an over 80% reliance on imports [1][2] - The "Cornerstone Plan" was launched in early 2022 to address the resource shortfall in the steel industry, focusing on the development of key mining areas [1][2] Resource Overview - As of 2023, China's iron ore reserves are reported at 169.17 billion tons, with projections of 200 billion tons by 2024, ranking fourth globally [2] - The complexity of terrain, scarcity of open-pit mines, and environmental constraints contribute to high mining costs [2] - The implementation of the "Cornerstone Plan" has accelerated the development of key mines, with domestic iron ore production expected to exceed 1 billion tons in 2024 [2] Regional Distribution - Major iron ore resources are concentrated in Hebei, Liaoning, Sichuan, Shanxi, and Anhui provinces, with Hebei accounting for 48% of the total production in 2024 [3] - The Anshan-Benxi iron ore region is noted as the largest in terms of reserves and production, holding 21.403 billion tons, which is a quarter of the national total [3] Production Companies - Key iron ore producers in China include Angang Mining, Taiyuan Iron & Steel, and Panzhihua Steel, with a total raw ore production of 3.8 billion tons in 2023 [4] - Angang Mining leads the industry with a comprehensive resource chain and a production capacity of 63 million tons of iron ore annually [5] Specific Mining Operations - The Qidashan mine, operated by Angang Mining, is one of the largest open-pit iron mines in Asia, with a resource reserve of 258 million tons and an annual production capacity expected to increase to 23 million tons post-expansion [5][6] - Taiyuan Iron & Steel's Yuanjiacun mine has a reserve of 1.2 billion tons and has significantly boosted the company's overall production since its commissioning [7] - Panzhihua Steel's operations in the Panzhihua region include substantial reserves of vanadium-titanium magnetite, with a total iron ore reserve of 1.668 billion tons [8] Future Developments - The Xishan iron mine, currently under construction, is projected to be the largest underground iron mine in China, with a resource reserve of 1.3 billion tons and an annual production capacity of 30 million tons [6] - The Chen Taigou mine, part of the Five Mines Group, is set to begin production in 2026, with a designed annual output of 11 million tons [17]

Core Viewpoint - The report outlines the independent financial advisory opinion regarding Xinjiang Baodi Mining Co., Ltd.'s plan to issue shares and pay cash to acquire assets, along with raising supporting funds through a related transaction. Group 1: Transaction Overview - The transaction involves Xinjiang Baodi Mining acquiring 82% equity of Xinjiang Congling Energy Co., Ltd. from Congling Industrial and 5% from JAAN Investments, while raising funds from up to 35 specific investors [4][5]. - The total cash consideration for the transaction is approximately 89.375 million RMB, with the total fundraising amount not exceeding 560 million RMB [5][6]. Group 2: Financial Impact - Post-transaction, the company's total assets are projected to increase from 658,262.10 million RMB to 779,440.88 million RMB, reflecting an 18.41% growth [8]. - The company's liabilities will rise from 266,624.28 million RMB to 323,309.00 million RMB, marking a 21.26% increase [8]. - The equity attributable to the parent company is expected to grow from 307,009.35 million RMB to 371,503.41 million RMB, a 21.01% increase [8]. Group 3: Operational Synergies - The acquisition will enhance the company's iron ore resource volume to approximately 4.6 billion tons, a 21.75% increase, thereby improving its operational capabilities [6][7]. - Xinjiang Congling Energy's high-grade iron ore resources will significantly boost the company's competitive position in the market, particularly in the production of iron concentrate [6][9]. Group 4: Share Structure and Control - The total share capital of the company will increase from 800 million shares to 916,528,117 shares post-transaction, maintaining a public shareholding ratio above 10% [7][8]. - The control structure of the company will remain unchanged, with Xinjiang Guoziwei as the actual controller [7][8]. Group 5: Regulatory Compliance - The transaction has undergone necessary decision-making processes and will require approval from relevant regulatory authorities before implementation [9].