Hainan Mining(SH:601969)2024-03-28 07:37Group 1: Lithium Hydroxide Project - The 20,000 tons lithium hydroxide project (Phase 1) is under construction and is expected to be completed and put into production by July 2024, with a ramp-up period of approximately 3-6 months, reaching an annual production capacity of about 18,000 to 20,000 tons [2] - The Bougouni lithium mine is expected to produce 2,000 tons in November 2024, with a planned annual output of 10-12 tons of lithium concentrate with a grade of over 5.5% after the first phase of the processing plant is completed [2] - The company is exploring the use of renewable energy sources, such as solar power, for the Bougouni lithium mine, although currently, diesel power is the primary energy source [2] Group 2: Cost Control and Capital Expenditure - The company aims to stabilize the production and gross margin of iron ore while controlling and reducing costs through various measures, including increasing the proportion of high-grade ore and optimizing product structure [3] - The planned capital expenditure for 2024 includes investments of CNY 543 million for the Shilu iron ore mining project and CNY 511 million for the magnetic roasting technology renovation project, with significant funding sourced from both raised and self-owned funds [3] - The 20,000 tons lithium hydroxide project has a total planned investment of CNY 1.056 billion, with CNY 177 million already invested as of December 31, 2023 [3] Group 3: Revenue and Profitability - The company's gross margin increased in 2023, primarily due to the oil and gas business, which saw a 15.56 percentage point increase in gross margin compared to the previous year [3] - The iron ore business experienced a slight decrease in gross margin by 6.32 percentage points year-on-year, attributed to rising mining and selection costs, although there was a quarter-on-quarter increase in the fourth quarter due to rising market prices [3] Group 4: LNG Production and Pricing - The LNG project at the Jiao 76 well group commenced production in June 2023, with a design capacity of 300,000 cubic meters per day, although it only achieved an output of approximately 210,000 barrels of oil equivalent in 2023 [4] - The pricing model for crude oil and natural gas products is aligned with Brent crude prices, while domestic natural gas prices are set by the government, ensuring relative stability [4] Group 5: Bougouni Lithium Mine Development - The Bougouni lithium mine is an open-pit operation with favorable mining conditions and has received environmental approval and mining permits [4] - The total cost of lithium concentrate from the Bougouni mine to Chinese ports is estimated to be no more than USD 650 per ton, including production costs and transportation [4] - The target customers for the lithium hydroxide products are high-end battery manufacturers in Japan and South Korea, with ongoing communication to meet their requirements [4]