Shengxin Lithium Energy invests 7.4 billion to secure mining rights, build a complete industry chain, and the long-term development prospects are promising.

While industry focus remains on lithium carbonate price fluctuations, some companies are quietly shifting their strategic focus toward upstream resource acquisition. As a non-renewable strategic material, control over high-grade lithium mines is becoming a key factor in determining a company’s market position. Once core mining rights are monopolized by a few companies, pricing power, cost advantages, and capacity expansion initiatives will tilt heavily toward the resource side. As leading companies like Salt Lake Co., Ltd. and Tianqi Lithium continue to expand their lithium mineral holdings, Shengxin Lithium Energy has successfully acquired Asia’s largest hard-rock lithium mine—the Muerong Lithium Mine—through a five-year strategic layout, attracting significant market attention.

This five-year resource competition began in 2020. Shengxin Lithium Energy, through its wholly owned subsidiary Shengtun Lithium, first acquired a stake in Huiyong Mining, obtaining 15.1% of the Muerong Lithium Mine, initially securing access to resources. In the second half of 2025, the company accelerated its integration efforts, completing two consecutive equity acquisitions that increased its stake to 86.07%, and ultimately gained full ownership in February 2026. This acquisition, costing over 7.4 billion yuan—equivalent to the company’s total net profit over five years—demonstrates its determination to break through resource bottlenecks.

The strategic value of the Muerong Lithium Mine is multi-dimensional. It contains 61.095 million tons of ore resources, with lithium oxide reserves of 989,600 tons and an average grade of 1.62%. According to industry conversion standards, this can produce approximately 2.45 million tons of lithium carbonate equivalent. This reserve scale far exceeds the company’s existing resources, effectively enabling the creation of several Shengxin Lithium Energy-sized operations. More importantly, the mine is located in the core area of the Western Sichuan lithium belt, with complete infrastructure and favorable mining conditions, offering significant cost advantages over remote deposits in regions like the Tibetan Plateau.

Gaining control over resources directly addresses a core pain point for the company. As an integrated enterprise producing lithium ore, lithium salts, and metallic lithium, Shengxin Lithium Energy has an annual lithium salt capacity of 137,000 tons but has maintained a low resource self-sufficiency rate. Data from the first three quarters of 2021-2025 show its gross profit margin has consistently lagged behind peers like Tianhua New Energy and Tibet Mining, dropping to just 2.42% during the industry downturn in 2024. This passive “dependent on mineral prices” situation began to improve after acquiring the Muerong Lithium Mine, as the company leveraged vertical integration to regain pricing power and control costs.

However, resource acquisition does not guarantee profitability. The Muerong Lithium Mine only obtained its mining license in October 2024 and is expected to reach full production by 2028, with ongoing investments needed for mine construction. As of the end of Q3 2025, the company’s debt ratio had reached 50.34%, with cash reserves of 2.56 billion yuan, indicating significant financial pressure. To address this, the company adjusted its financing strategy in October 2025, terminating its Hong Kong IPO plan and instead raising 2.073 billion yuan through private placements with strategic investors Zhongchuang Innovation and Huayou Holdings, providing critical support for project development.

While solving funding challenges, the company also built risk hedging mechanisms. In the downstream market, Shengxin Lithium Energy signed long-term supply agreements with Huayou Holdings and Zhongchuang Innovation in November-December 2025, locking in 421,400 tons of lithium salt orders from 2026 to 2030, paving the way for future capacity releases. Overseas expansion was achieved through the Indonesia Shengtuo project, the largest overseas lithium ore processing plant with a capacity of 60,000 tons per year. Since commissioning in August 2025, it delivered over 10,000 tons within four months, boosting the company’s Q3 gross profit margin by 34.13 percentage points to 25.28% and surging net profit by 112.93% quarter-over-quarter, turning losses into profits.

From resource acquisition to capacity release, from domestic integration to overseas deployment, Shengxin Lithium Energy is reconstructing the entire “resource-processing-market” chain to break industry cycle constraints. Although challenges remain in mine commissioning cycles and capital pressures, improvements in resource self-sufficiency and the formation of a profit cycle have laid a solid foundation for the company’s industry cycle navigation. This strategic transformation not only alters the company’s competitive landscape but also provides a new model for resource integration within the industry.