Yahua Group's "Globalization" lithium supply is eyeing a Brazilian company again. Brazil's lithium concentrate supply has reached 180,000 tons per year.

Everyday Economic News Reporter | Xu Shuai Everyday Economic News Editor | Xu Shaohang

Against the backdrop of increasingly fierce global competition for lithium resources, Yahua Group (SZ002497, officially Sichuan Yahua Industrial Group Co., Ltd.) has once again turned its attention to Brazil. On the evening of March 25, Yahua Group disclosed that it signed a “Purchase and Sale Agreement” with MGLIT EMPREENDIMENTOS LTDA (hereinafter “MGLIT” or “Seller”) to purchase spodumene concentrate over the next five years after the seller achieves stable production.

An insider from the company told the Daily Economic News (hereinafter “Everyday News”) that the lithium concentrate supply from Brazil involved in this agreement will reach 120,000 tons per year. Combined with the previously locked-in resources from Atlas Brazil of 60,000 tons per year, Yahua Group’s lithium concentrate procurement scale in Brazil will total 180,000 tons annually.

According to Yahua Group’s announcement on the evening of March 25, the agreement takes effect from the date of signing and is valid for five years from the first product shipment, with the possibility of extension upon mutual agreement. The agreement stipulates that each contract year, MGLIT will sell and deliver no less than 120,000 dry metric tons of spodumene concentrate to Yahua Group. Over the five-year contract period, Yahua Group will secure at least 600,000 tons of spodumene concentrate supply.

Product prices will be determined based on the agreed pricing method, with a minimum price set at $1,000.00 per dry metric ton (based on 6% lithium oxide content). Actual prices will be adjusted according to the actual lithium oxide content per ton. The announcement also states that Yahua Group will provide MGLIT with a prepayment financing of $12 million, with terms such as interest rate, drawdown conditions, and repayment methods to be specified in a separate agreement according to market standards.

MGLIT is a wholly owned subsidiary established in Brazil by Lithium Ionic Corp. (stock code: LTH), a Canadian publicly listed company. Lithium Ionic focuses on exploration and development of the well-known Jequitinhonha lithium belt in Minas Gerais, Brazil. The region is famous for its large-scale, high-grade hard-rock lithium deposits, including world-class projects such as Sigma Lithium’s Xuxa and Barreiro deposits (considered among the largest hard-rock lithium deposits in the Americas) and the CBL mine with a 30-year production history. Through continuous acquisitions, Lithium Ionic has built a land portfolio of approximately 7,700 hectares locally.

According to investor relations activities disclosed by the company, Yahua Group has established a lithium resource guarantee system combining “self-controlled mines + external purchases.” On the self-controlled side, the company’s Phase I and II projects at Kamativi Lithium Mine in Zimbabwe were fully completed in 2024, with an annual processing capacity of 2.3 million tons of ore, and the lithium concentrate produced has been gradually shipped back to China for production. Additionally, the company has obtained priority supply rights through equity participation in Sichuan Lijiagou Lithium Mine. On the external purchase side, the company has secured long-term agreements for lithium ore sales from companies such as Pilbara in Australia, DMCC in Africa, and Atlas in Brazil.

The company stated during investor exchanges that these lithium resource channels can meet the company’s lithium salt production needs. By the end of 2025, the company’s integrated lithium salt capacity is expected to reach nearly 130,000 tons. The operation of the Kamativi Lithium Mine in Zimbabwe has increased the company’s self-sufficiency in lithium ore, positively impacting the cost of lithium salt products. In terms of capacity planning, the company is also advancing debugging work for a 30,000-ton high-grade lithium salt production line at Yaan Lithium, with future capacity further expanding and upstream resource demand continuing to grow.

In recent years, global lithium resource supply has been affected by regional policy changes and geopolitical factors. For example, Zimbabwe has made multiple adjustments to its mining policies, imposing restrictions on lithium ore exports, which puts pressure on companies relying on single sources. Yahua Group stated during investor interactions that it is committed to continuously increasing lithium resource self-sufficiency and actively exploring high-quality lithium resources domestically and abroad. The company is investigating lithium projects in multiple countries and regions, strictly following principles of multi-dimensional research, careful decision-making, and prudent advancement.

Previously, Yahua Group had signed a lithium ore sales agreement with Atlas Brazil. The addition of MGLIT’s supply channel further expands the company’s lithium concentrate procurement scale in Brazil. An insider told Everyday News that the lithium concentrate supply from Brazil involved in this agreement will reach 120,000 tons per year, plus the previously secured 60,000 tons from Atlas Brazil, making Yahua Group’s total lithium concentrate procurement in Brazil 180,000 tons annually.

According to the company’s 2025 performance forecast, net profit attributable to shareholders is expected to be between 600 million and 680 million yuan, representing a year-on-year increase of 133.36% to 164.47%.

Cover image source: Everyday Media Library