West Africa's largest lithium processing plant has officially commenced operations in Nigeria's Nasarawa State. The facility has a designed processing capacity of 6,000 tonnes of lithium ore per day, equivalent to around 30,000 tonnes of lithium carbonate equivalent (LCE) annually. The project is operated by Diamond Energy Group, with Jiuling Lithium and Tianhua New Energy each holding a 50% stake.

Core View The main theme of lithium ore prices in H1 2026 was a sharp rally followed by a correction, rather than a one-way upward shift in the price center. The SMM spodumene concentrate index price (SC6, CIF China) started the year at around USD 2,000/t in January, briefly fell to USD 1,875/t in early February, then followed lithium carbonate prices higher and reached the year-to-date high of USD 2,780–2,840/t in mid-May, before retreating to the USD 2,385–2,480/t range in June. This trajectory almost fully mirrored lithium carbonate prices. Lithium carbonate spot prices started the year at around RMB 130,000/t, rose above RMB 200,000/t in May, and then pulled back to RMB 160,000–180,000/t in June. Lithium ore did not experience an independent rally throughout the period. It was pulled upward by lithium carbonate pricing via the futures market and then corrected as lithium carbonate prices peaked. Therefore, the starting point for understanding lithium ore prices in H1 is not resource-side supply and demand, but lithium carbonate pricing and market sentiment. One common misinterpretation needs to be corrected first: the strength in lithium ore prices in H1 was not the result of “tight effective supply pushing the price center higher.” The real drivers were the resonance of front-loaded demand, supply disruption expectations, and futures-driven sentiment. Front-loaded demand was triggered by export tax rebate adjustments; supply disruption expectations came from the repeated delays in Jianxiawo’s restart and Zimbabwe’s lithium concentrate export ban. When warehouse receipts accumulated and macro headwinds were released in May, and when Jianxiawo’s restart expectation materialized in June, prices corrected accordingly. After that, prices rebounded again as demand expectations improved. 1. Lithium Ore Followed Lithium Carbonate, While Spodumene-Based Conversion Margins Stayed Negative Throughout H1 The clearest evidence of the lithium ore pricing mechanism in H1 was not how much ore prices rose, but the fact that spot conversion margins for producing lithium carbonate from externally procured spodumene concentrate were negative for most of the period. The ore-salt margin inversion was structural and persistent in H1, rather than a short-lived squeeze on processing margins. The cause of this inversion directly points to the reversal of the pricing mechanism. Ore prices are no longer determined by a cost-plus model from the upstream side, which then determines lithium salt prices. Instead, lithium carbonate has become the pricing anchor, and ore prices are reverse-priced through the futures market. In early January, when lithium carbonate prices rallied on front-loaded demand and sentiment, ore prices were pushed higher at the same time. However, downstream lithium salt demand could not fully absorb the higher cost, and processing margins were squeezed into negative territory. In April, under the reality of ore-salt inversion and limited hedging opportunities, lithium salt producers relying on externally procured ore saw their ability to accept high-priced ore weaken significantly. For overseas miners, this means their realized selling prices are increasingly anchored by the profitability of China’s refining sector. This is not a narrative assumption, but a mechanism that can be verified month by month through spot margin data. The financialization of pricing was also visible in market transactions. When prices fell at the end of May, lithium salt producers became more active in pricing ore purchases. In June, the basis for new cargoes strengthened. Pricing based on futures quotation plus premium or discount has become the mainstream transaction model. Lithium salt producers tend to use pricing windows during price corrections to lock in ore supply. Whoever holds the pricing right controls the settlement timing, and in H1’s highly volatile two-way lithium carbonate market, this directly led to margin differentiation among different lithium salt producers. 2. The Three Drivers of the Rally and the Triggers of the Correction Front-loaded demand — export tax rebate adjustment. In January 2026, the Ministry of Finance and the State Taxation Administration clarified that the VAT export rebate rate for lithium battery products would be reduced from 9% to 6% from April 1, and fully removed from January 1, 2027. This policy directly stimulated downstream players to concentrate export shipments and inventory preparation before April, significantly front-loading demand into H1, especially supporting demand for energy storage and ternary-related materials. This was the most important demand-side catalyst in H1 and the one most easily overlooked by the “weak recovery” narrative. Supply disruption expectations — Jianxiawo and Zimbabwe. After Jianxiawo’s mining permit expired and production was halted in August 2025, its restart timeline was repeatedly pushed back in H1, continuously providing room for both bullish and bearish speculation in the market. Now that Jianxiawo’s restart has been confirmed, the largest bearish factor has been priced in, and the market’s focus has shifted back to whether demand can outperform expectations. In Zimbabwe, the lithium concentrate export ban at the beginning of the year disrupted shipment expectations. Positive progress was reported in late March, and by mid-May, Chinese-funded mining companies in Zimbabwe had completed export procedures and restarted shipments, easing the previous short-term tightness in African cargo arrivals. SMM expects the first batch of cargoes to arrive in China in mid-to-late July. Correction triggers — warehouse receipts, macro factors, and the materialization of restart expectations. After lithium carbonate prices rose above RMB 200,000/t in May, exchange warehouse receipts continued to accumulate and hit new highs, while concerns over off-balance-sheet inventory increased. Together with macro pressure from expectations of further Fed rate hikes, prices peaked and corrected in late May. On June 17, the approval of Jianxiawo’s land use application materialized, and clearer restart expectations further weighed on both ore and salt prices. By late June, according to SMM monthly production schedules, July demand showed resilience despite the seasonal lull, with both power and energy storage cell production schedules increasing month on month. Monthly lithium carbonate consumption remained at a high level, which restored some market confidence and pushed lithium prices higher again. 3. Supply-Side Reality: Imports Weakened Month on Month, but Cumulative Imports Still Increased; Australia Remained Dominant From January to May, spodumene imports showed a combination of weaker month-on-month momentum and continued year-on-year cumulative growth. On a monthly basis, imports reached 758,000 physical tonnes in April, down 9.5% month on month, and 680,800 tonnes in May, down 10.2% month on month. However, total spodumene imports in January–May reached around 3.66 million tonnes, up approximately 25% year on year. By origin, Australia remained the dominant source. China imported around 1.585 million tonnes from Australia in January–May, although May imports from Australia were around 330,000 tonnes, down approximately 15.2% year on year. The share of African supply continued to rise. On the shipment side, lithium concentrate shipments from Port Hedland to China showed clear quarter-end volume acceleration, with March shipments reaching around 122,000 tonnes, up 64.3% month on month. The marginal changes in overseas mines were concentrated in restarts and offtake agreements. Core Lithium restarted its Finniss project on May 20 and plans to ship the first batch of concentrate in Q4. Mineral Resources also restarted Bald Hill, with first spodumene output expected in July. These restart volumes are limited and will not change the short-term supply structure, but they reinforce the expectation of new supply materializing in H2 2026 and H1 2027. On the domestic side, SMM’s domestic sample mines produced 160,690 tonnes LCE in January–June. The restart of Jiangxi lepidolite mines was constrained by permitting procedures, environmental protection, profitability, and other factors, and did not fully ramp up in H1. 4. Migration of Long-Term Pricing Mechanisms: Floor Price Plus Pricing Optionality Has Become the Norm The long-term spodumene offtake agreements signed intensively in H1 provide direct contractual evidence of the financialization of ore pricing. In February, Pilbara Minerals signed a two-year offtake agreement with Tianhua New Energy, setting a floor price of USD 1,000/t, with no price ceiling, together with a USD 100 million interest-free prepayment. In the same period, Pilbara also signed a long-term agreement with Canmax. Yahua Group signed an offtake agreement with Brazil’s MGLIT, also with a minimum price of USD 1,000/t on a 6% basis. Liontown and Tianhua agreed on supply for 2027–2028, priced against a spodumene index. The common feature is a structure of USD 1,000/t floor price plus index or pricing optionality, with downside protection but no upside cap. The pricing benchmark is migrating from fixed website-based long-term pricing toward index-based and futures-linked pricing. This confirms that ore pricing is shifting from traditional long-term contracts to a more financialized structure of “floor price + pricing optionality + premium/discount.” This provides a contractual basis for assessing pricing transmission lags and distortions, and is also a key point for overseas investors to understand how China’s pricing system is penetrating upstream resources. 5. H2 Outlook H1 2026 provides a very clear methodological lesson for H2: lithium ore prices will not move independently from lithium carbonate. The core pricing variables for ore are not the nominal size of global lithium resources, but the dynamic matching among lithium carbonate futures, spot conversion margins for lithium salt producers using externally procured ore, domestic mine restart progress, African cargo arrival schedules, lithium salt producers’ feedstock inventories, and downstream material production schedules. In H1, lithium salt conversion margins remained negative for an extended period, yet ore prices did not fall quickly. Instead, they rose together with lithium carbonate prices under the influence of downstream restocking and supply disruption expectations. This shows that the H1 rally was not an independent strengthening of upstream fundamentals, but a synchronized industry-chain movement driven by front-loaded demand, delayed supply realization, and amplified futures sentiment. For H2 lithium ore analysis, the first step is to distinguish between “no shortage in total resources” and “short-term tightness in effective ore supply.” From a global resource perspective, Australia, Africa, Brazil, South American brines, and Chinese domestic mines all have incremental supply expectations, so there is no absolute shortage of resources. However, from the perspective of Chinese lithium salt production, what truly affects lithium carbonate supply is ore that can be purchased in time, arrive steadily, meet grade requirements, have controllable impurities, and match existing processing lines. If ore is locked in long-term contracts, still in transit, concentrated in trader inventories, or if high prices reduce lithium salt producers’ willingness to purchase, its contribution to short-term lithium salt supply will be weakened. Therefore, H2 analysis should not simply focus on mine output. It should track port inventories, traders’ saleable inventories, in-plant inventories at lithium salt producers using externally procured ore, vessel schedules, and long-term contract lock-up structures. On the domestic supply side, Jianxiawo is the core variable driving H2 market expectations, but its impact should not be simplified as “restart equals immediate supply.” After the mine was suspended, the market treated it as the key anchor for marginal domestic lepidolite supply. The real question in H2 is not the single event of whether it restarts, but whether the restarted volume becomes freely tradable ore. If the output is mainly consumed within CATL’s integrated system, the impact on the spot ore market and externally procured ore salt producers will be limited. Only if the output enters the spot market will it directly pressure ore prices and conversion margins. At the same time, the suspension and restart timeline of other Jiangxi lepidolite mines also needs to be incorporated into the framework. Previous public reports indicated that some mines in Yichun may first exhaust their annual mining quota during the license renewal process and then enter a production halt for license renewal. If these mines continue to be affected by permitting, environmental protection, safety, or profitability factors in H2, the supply elasticity of domestic lepidolite will be weaker than nominal capacity suggests. Conversely, if Jianxiawo and other Yichun mines move forward with restarts or license renewals in Q3–Q4, the marginal contribution of domestic ore to lithium carbonate supply will increase significantly and put pressure on high ore prices. In other words, domestic ore supply in H2 should not be treated as a single variable. It is jointly determined by Jianxiawo, other Yichun mines, and the operating rates of Jiangxi lepidolite-based lithium salt producers. For overseas ore, African supply remains one of the largest sources of H2 supply elasticity. In H1, the disruptions in Africa were more about policy, shipment, and arrival timing rather than the disappearance of resources. If shipments from Zimbabwe and other regions recover and previously delayed cargoes arrive in China in a concentrated manner, feedstock availability for lithium salt producers will improve and the bargaining power of ore sellers will weaken. However, if policy disruption, logistics cycles, grade volatility, or financing pressure cause arrivals to remain inconsistent, lithium salt producers using externally procured ore may still be unable to raise operating rates quickly even if margin repair expectations improve. Australian supply is relatively stable, but a large portion is locked under long-term contracts, limiting its marginal adjustment impact on the spot market. Brazilian and other emerging resources are more important for medium- and long-term expectations, while their short-term impact on Chinese lithium salt production depends on arrival timing and quality stability. Demand is the key factor determining downside support for ore prices. In H2, power batteries and energy storage will enter the traditional peak season, and the expansion and ramp-up of cell and material producers will continue to lift lithium salt consumption. In particular, lithium iron phosphate output, supported by energy storage and commercial vehicle demand, is expected to remain high and provide sustained demand for lithium carbonate. Although ternary materials are growing more slowly than LFP, they may still see periodic restocking driven by certain overseas and high-end power battery demand. If material producers’ expansion is realized smoothly, lithium salt producers will need to maintain high operating rates to meet long-term contract deliveries and spot orders, which will in turn support rigid ore procurement demand. Conversely, if terminal orders fail to absorb the expansion of materials, material producers may enter a destocking cycle, and lithium salt producers’ ore procurement will quickly weaken, causing ore prices to come under pressure earlier. Therefore, H2 lithium ore prices can be divided into four scenarios. Base case: margins gradually rebalance, and ore prices fluctuate at high levels before edging lower. Jianxiawo’s restart expectation materializes, but actual mining and beneficiation ramp-up is gradual. African cargo arrivals recover but do not form a concentrated shock. Power battery and energy storage production schedules remain high, while material producers’ expansion is gradually realized. In this scenario, lithium carbonate prices remain volatile at high levels, the margin inversion of externally procured ore salt producers slowly improves, and lithium ore prices follow lithium carbonate lower but do not collapse. The profits that were excessively concentrated in upstream resources and futures expectations in H1 begin to gradually flow back toward midstream refining. Correction scenario: supply materializes in a concentrated manner, and profits quickly flow back to midstream refining. If Jianxiawo ramps up faster than expected and part of its output enters the spot market; if other Yichun mines progress faster than expected in license renewals; if African ore arrives in China in a concentrated way; and if lithium carbonate warehouse receipts and futures market pressure intensify, ore prices will face stronger downside pressure. The transmission chain would be: lithium carbonate futures turn bearish → lithium salt producers become more cautious in procurement → rigid demand for externally procured ore slows → traders release saleable inventories → ore prices correct quickly. In this scenario, profits do not disappear; they shift quickly from upstream resources back to midstream refining, and overseas miners’ realized prices also come under pressure. The key is not the nominal restart volume of Jianxiawo, but whether the restarted ore is internally consumed or enters the spot market, and whether downstream material inventories can absorb the additional lithium salt supply. Support scenario: effective ore supply remains tight, and profits stay upstream. If Jianxiawo’s actual output is later than market expectations, if license renewals or environmental factors continue to suppress the supply elasticity of other Yichun mines, if African arrivals remain inconsistent, and if peak-season energy storage and power battery production schedules continue to exceed expectations, lithium salt producers using externally procured ore will still face the situation of “orders and capacity available, but feedstock either expensive or unstable.” In this case, negative conversion margins will force some marginal lithium salt producers to reduce operating rates. The contraction of effective lithium carbonate supply will support lithium salt prices; and once salt prices stabilize, ore prices will also gain support. The persistent margin inversion in H1 has already shown that losses are not simply bearish. They act as an automatic stabilizer for the industry chain: they force some marginal refining capacity to shut down, reduce lithium salt supply, and thereby support prices in reverse. Upside scenario: effective ore shortage transmits into lithium salt supply contraction, driving ore prices higher again. If H2 sees the combination of stronger-than-expected demand, weaker-than-expected domestic ore realization, and inconsistent overseas arrivals, lithium ore prices could still rise further. Specifically, if energy storage demand remains highly robust and power batteries enter the traditional peak season with further upward revisions to cell and material production schedules, especially as new LFP capacity continues to ramp up, monthly lithium carbonate consumption will continue to rise. At the same time, if Jianxiawo’s restart is slower than expected, or if output after the restart is mainly consumed within the integrated system with limited spot supply, and if other Jiangxi lepidolite mines are temporarily halted due to license renewal, environmental protection, safety, or profitability factors, domestic ore supply elasticity will fall short of nominal expectations. If African ore arrivals are also inconsistent due to shipment schedules, policy disruptions, grade volatility, or financing issues, lithium salt producers using externally procured ore will face difficulties replenishing feedstock. Under this scenario, ore is no longer merely a variable reverse-priced by lithium carbonate. It begins to constrain lithium salt supply in reverse. The transmission chain would be: downstream material and cell production schedules are revised upward → lithium carbonate spot destocking accelerates → lithium salt producers increase operating rates to fulfill orders → demand for processable ore rises → domestic ore and overseas arrivals fail to ramp up simultaneously → feedstock inventories at externally procured ore salt producers decline → some marginal producers cut output because they cannot secure suitable ore or because margins remain deeply negative → effective lithium carbonate supply contracts → lithium carbonate spot and futures prices strengthen again → lithium ore prices follow lithium carbonate upward. In this case, ore price increases are not driven by independent upstream strength. They are re-priced upward by lithium carbonate after insufficient effective ore supply starts to restrict lithium salt output. In this upside scenario, spot conversion margins for externally procured ore may remain negative or even widen further. On the surface, negative margins should pressure ore prices. But under the combination of strong demand, strong lithium salt prices, and tight ore supply, negative margins can instead become a price-supporting mechanism. On one hand, they force some high-cost externally procured ore producers to suspend operations, reducing lithium carbonate supply. On the other hand, producers with long-term delivery obligations, customer orders, or futures hedging needs still have to keep buying ore, further consuming saleable ore supply. The end result is that industry-chain profits remain concentrated upstream, lithium salt producers’ margin recovery is delayed, and the ore price center may move further upward. Overall, the core issue for the H2 lithium ore market is not whether there is too much or too little ore, but whether ore can be converted into lithium carbonate supply in time. The correct analytical framework should cover six variables: the strength of power battery and energy storage production schedules, inventory cycles at material and cell producers, lithium carbonate spot and futures pricing, the depth of margin inversion for lithium salt producers using externally procured ore, the actual restart and distribution path of Jianxiawo and other Yichun mines, and changes in African arrivals and traders’ saleable inventories. Lithium ore is not the starting point of the industry-chain cycle. It is the result of reverse pricing by lithium carbonate supply-demand fundamentals, refining margins, and the futures market. Only when ore starts to restrict lithium salt producers’ operating rates, or when new ore supply begins to materially increase lithium carbonate supply, will lithium ore shift from a price-following variable to a supply-demand-leading variable. SMM New Energy Analyst: Lesley Yang yangle@smm.cn +61 0451581533

[SMM Cobalt Lithium Morning Meeting Minutes: This week, overall sentiment in the industry chain recovered, as a rebound in upstream raw material prices drove some material prices higher. Lithium carbonate, LFP, and separator segments performed strongly. Downstream production schedules stayed high, with demand from energy storage, commercial vehicles, and power batteries still providing support. However, acceptance of high prices was limited, and actual transactions were mostly based on essential needs. Cobalt salts, nickel salts, and ternary cathode precursors remained in the doldrums, with a strong wait-and-see sentiment prevailing in the market. Overall, short-term prices may continue to drift higher, but attention still needs to be paid to raw material arrivals, the sustainability of restocking, and the realization of end-use demand going forward.]

This week, spot lithium carbonate prices bottomed out and consolidated higher. The futures market was strong, with the most-traded 2609 contract rebounding sharply from 145,300-154,700 yuan/mt at the start of the week to 162,200-167,800 yuan/mt. The mid-week high touched 167,800 yuan/mt, and the weekly gain was about 8.4%. Market sentiment diverged significantly between upstream and downstream players. Upstream lithium chemical plants continued to hold prices firm and hold back from selling, with low willingness to sell below 170,000 yuan/mt. Some enterprises, supported by costs, maintained the intention to keep prices high. Downstream material plants had largely completed their month-end stockpiling for the next month. As prices consolidated higher, purchases were mainly need-based, restocking was cautious, and acceptance of high-priced cargoes remained low. Overall, market inquiries and actual transactions were relatively stable and quiet, with the spot-futures price spread strengthening slightly. Supply-side output fell sharply, strengthening expectations of supply contraction. Lithium carbonate production fell sharply this week, mainly because the circulation of spodumene and lepidolite raw materials in the market was relatively tight, while some lithium chemical plants had maintenance plans, leading to a sharp drop in spodumene-based output. Salt lake-based and recycling-based output maintained steady gains. Multiple bullish factors on the supply side converged to drive the price rebound. First, raw material supply tightened, with spot circulation of spodumene concentrates tightening, coupled with maintenance plans at some lithium chemical plants, strengthening expectations of near-term supply contraction. Second, signs of a phased decline in imports emerged: Chile’s lithium carbonate exports to China fell 40.8% MoM in May, and domestic import arrivals are expected to decline subsequently. On the demand side, downstream production schedules in July showed significant growth and remained high. The domestic lithium carbonate supply-demand balance is expected to show a large destocking pattern in July. Looking ahead, near-term lithium carbonate prices may hold up well and consolidate, but upside room should be viewed with caution. Near-term lithium prices are expected to consolidate in the 160,000-170,000 yuan/mt range. It is recommended to focus on the progress of mine license renewal in Jiangxi, the pace of port arrivals of lithium ore from Zimbabwe, changes in downstream acceptance of high prices, and the extent of warrant retreat from high levels.

Zimbabwe's Finance Minister Mthuli Ncube revealed during the World Economic Forum in Dalian that the country is actively considering using its abundant mineral resources as collateral through "resource‑linked debt instruments" to finance road and railway construction projects in cooperation with China. This model aims to leverage future revenue from natural resources as loan guarantees to address the huge funding gap for infrastructure development. Ncube said Zimbabwe has held preliminary discussions with China Railway Group regarding such financing arrangements. He told reporters: "We have discussed resource‑linked debt instruments and hope to use them in the future to support infrastructure development, particularly in the road and railway sectors." Under the envisaged plan, Zimbabwe would assess project costs, toll revenue potential, and the return cycle of required resource investments to determine the scale of resource collateral and the repayment path. As Africa's largest lithium producer, Zimbabwe possesses rich mineral resources, but years of economic mismanagement and political instability have left its infrastructure severely lagging. The African Development Bank estimates that the country needs approximately US$34 billion to modernise its transport and logistics network. The proposed resource‑for‑infrastructure plan resembles the model of the US$7 billion Sicomines copper‑cobalt joint venture in the Democratic Republic of Congo with Chinese companies. As early as September 2025, Zimbabwe's President, during a meeting in Beijing with senior executives of China Railway Group, promoted a railway rehabilitation cooperation plan totalling US$533 million. The project is to be implemented by Chuantie International, a subsidiary of China Railway Group with extensive experience in African projects. The scope of work includes repair and reinforcement of existing lines and bridges, modernisation of signal systems, procurement of 17 locomotives and 209 freight wagons, construction of five new stations, and the key trunk line connecting Beitbridge and Harare – a strategic corridor leading directly to South Africa, which is vital to Zimbabwe's foreign trade. Currently, the project's financing method and formal signing date are still under final negotiation. Zimbabwe's railway network was built during the colonial era and carried up to 12 million tonnes of freight annually in the 1990s. However, decades of underinvestment, equipment obsolescence, and foreign exchange shortages have caused the railway infrastructure to deteriorate continuously. Current annual freight volume has fallen to less than 3 million tonnes – only 15% of its historical peak. Many lines are overgrown with weeds, and a large number of locomotives and rolling stock have been taken out of service, directly weakening the capacity to transport bulk commodities such as lithium, chrome ore, and coal to the ports of Mozambique and South Africa. Consequently, Chinese mining enterprises operating in Zimbabwe – including Tsingshan Holding Group, Sinosteel Corporation, and Zhejiang Huayou Cobalt – all face export bottlenecks for their products. The decline of the railway system has forced a large volume of freight onto roads, leading to a surge in heavy trucks, which in turn exacerbates road congestion, traffic accidents, and pavement damage, forming a vicious cycle. In response, the National Railways of Zimbabwe has incorporated this railway rehabilitation into a broader modernisation framework and has engaged in cooperation with 11 private enterprises. Among them, South Africa's Grindrod, through its subsidiary Beitbridge‑Bulawayo Railway Company, has already deployed three locomotives and 150 freight wagons to alleviate current transport pressures. At the same time, Zimbabwe is exploring collaboration with the University of Zimbabwe to leverage the university's innovation centre for localised railway technology R&D and talent training, building capacity for long‑term operations. Analysts point out that if this railway rehabilitation is successfully implemented, it will not only fully restore Zimbabwe's deteriorated railway network, but also provide critical logistics support for the country's US$12 billion mining target, while further deepening the strategic presence of Chinese enterprises in Zimbabwe's mining and infrastructure sectors. According to market dynamics, in recent years – and especially since the beginning of this year – lithium ore shipments from Zimbabwe have been persistently delayed at ports, with insufficient inland transport capacity being one of the main bottlenecks hindering smooth cargo arrivals. As the relevant logistics system upgrades are put into effect, this situation is expected to be significantly alleviated, and the transport efficiency of lithium materials will be notably improved, thereby injecting solid momentum into the stabilisation of global lithium supply. Sources: Mining.com , Azure Track Rail, and SMM

As the core production area for lepidolite in China, Yichun in Jiangxi Province has drawn significant industry attention for its special compliance rectification of lithium mines. Amid an uncertain outlook, two other publicly listed firms decided to "partner up" and consolidate their resources. On the evening of June 22, Canmax and Yongxing Materials simultaneously disclosed that Canmax's holding subsidiary, Yichun Shengyuan Lithium Co., Ltd. ("Shengyuan Lithium"), signed an Equity Increase and Cooperation Agreement with Yongxing Materials' holding subsidiary, Yifeng County Huaqiao Yongtuo Mining Co., Ltd. ("Huaqiao Yongtuo"), and its wholly-owned subsidiary, Yifeng County Huaqiao Mining Co., Ltd. ("Huaqiao Mining"). Under the agreement, Shengyuan Lithium will use the porcelain clay (lithium-bearing) ore from the Jinzifeng-Zuojiali mining area in Fengxin County and Yifeng County, Jiangxi Province ("Jinzifeng Mine"), which it holds, to increase its capital in Huaqiao Mining. According to the announcement, Shengyuan Lithium will contribute the Jinzifeng Mine, valued at 2.692 billion yuan, to Huaqiao Mining, subscribing to 200 million yuan of newly added registered capital in exchange for a 50% equity stake in Huaqiao Mining upon completion. The 200 million yuan will be recorded as Huaqiao Mining's registered capital, and the remaining 2.492 billion yuan will be recorded as its capital reserve. Of this, the registered capital and capital reserve contributed by Shengyuan Lithium will be exclusively owned by Shengyuan Lithium, while all shareholder equity of Huaqiao Mining existing prior to Shengyuan Lithium fulfilling its capital contribution obligations will be exclusively owned by Huaqiao Yongtuo. After the capital increase, Huaqiao Mining's registered capital will grow from 200 million yuan to 400 million yuan, with Huaqiao Yongtuo and Shengyuan Lithium each holding a 50% stake. Huaqiao Mining will simultaneously hold the mining permits for both the Huashan Mine and the Jinzifeng Mine. Huaqiao Mining will then apply to the relevant authorities to merge the mining rights for the Jinzifeng Mine and Huashan Mine into a new single mining right. Using this new right as the vehicle, it will apply for a safety production permit and other required procedures for production and construction at an annual mining capacity of 18 million mt, with Huaqiao Mining subsequently taking unified charge of all ore extraction. Regarding ore extraction, the announcement specifies that it will be organized uniformly by Huaqiao Mining. In principle, mined ore from within the original Jinzifeng Mine boundary will be sold to Shengyuan Lithium or its designated third party, while ore from within the original Huashan Mine boundary will be sold to Huaqiao Yongtuo or its designated third party. Regarding the management of the future consolidated mines, the announcement states that Huaqiao Mining will be managed and operated through separate divisions for Huashan Mine and Jinzifeng Mine. Shareholders, the board of directors, and management shall respect historical practices and adopt lawful and compliant management, dividend distribution, and sales models to minimize the impact of differing ore resource endowments between Jinzifeng Mine and Huashan Mine on the investment returns of both shareholders and subsequent beneficiation revenues. On the mining right consolidation, both publicly listed firms note that Huashan Mine and Jinzifeng Mine are adjacent. Under relevant laws and regulations, a safe production setback distance must be established between adjacent mines during mining operations. Both parties believe the consolidation aligns with the national policy direction of intensive development of strategic mineral resources. On one hand, integrating the two adjacent mining areas of Jinzifeng Mine and Huashan Mine will allow coordinated development planning and safety production control, optimize the overall mining layout, strengthen the mine safety management system, and ensure long-term compliant and stable operations. On the other hand, the mine consolidation is expected to fully release the mineral resource potential within the mining area, increase total recoverable resources and the comprehensive utilization rate of mineral resources, thereby achieving scientific, standardized, and efficient resource development. It is worth noting, however, that the effectiveness of the agreement between Yongxing Materials and Canmax remains subject to two conditions. First, the transaction must be approved by the competent authorities of all parties involved. Second, the primary mineral types of both Jinzifeng Mine and Huashan Mine must be changed to "lithium ore." As the "Asian Lithium Capital," Yichun saw many mines in earlier years extract lepidolite under porcelain clay mining certificates, leading to long-standing issues such as certificate-mineral mismatches, extensive mining, ecological pollution, underpayment of taxes and fees, and non-compliant approval levels. In July 2025, the new Mineral Resources Law designated lithium as an independent strategic mineral at the national level, setting a lithium ore recognition threshold of 0.4% Li₂O, elevating lithium mine approval authority, and significantly increasing resource taxes. In July 2025, the Yichun Natural Resources Bureau issued a notice identifying that eight lithium-related mining rights, including Jianxiawo, had problems such as circumventing higher-level approval authority and handling procedures beyond their mandate. It required the preparation of mineral type change reserve verification reports to be completed by the end of September that year. The newly disclosed mining rights evaluation reports from Canmax and Yongxing Materials indicate that work such as reserve verification and development plan formulation for the Jinzifeng Mine and Huashan Mine has been completed, an application to change the main mineral type has been submitted, and the Ministry of Natural Resources accepted it on March 12, 2026. The main mineral type is expected to be changed to lithium ore. In its 2025 annual report, Yongxing Materials also noted that Huaqiao Mining needs to change the mining types on its mining license, and therefore must pay the mining rights transfer proceeds for the lithium ore resources that have historically been exploited at the Huashan Mine but not yet compensated through paid disposal. As of the end of 2025, Huaqiao Mining had accrued 144 million yuan in mining rights transfer proceeds payable. However, both evaluation reports emphasize that "this evaluation is based on the proposed change of the main mineral type to lithium ore, and the final outcome is subject to approval by the Ministry of Natural Resources and the issuance of a new mining permit." The reports also caution, "If the change is not approved, the evaluation results will become invalid."