Gelonghui, March 1, 丨 China Graphite (02237.HK) issued an announcement. In order to optimize the company's strategic layout and enhance the company's competitiveness in the graphite industry, the company has acquired this woodland to increase graphite production, and to build new beneficiation plants, new processing plants and tailings pools as described in the prospectus.
The company formulated a new graphite mining plan to increase the licensed graphite mining volume at the company's Beishan mine to more than 500,000 tons per year. Therefore, the company plans to use part of the woodland to mine graphite and store waste stone expected to increase due to increased mining activities. With the increase in graphite mining capacity described above, the Beishan mine can fully supply unprocessed graphite for production to the company's existing beneficiation plants and the new beneficiation plants described in the prospectus, bringing production cost advantages to the Group in the long run.
The remaining portion of the woodland will be used as a land reserve to ensure that the land area near the Beishan mine is sufficient for the company to build, develop and expand in the future.
In view of recent and anticipated competition in the downstream electric vehicle market in China and the graphite industry as a whole, the company decided to change the Group's latest strategic focus from production-oriented to production cost optimization. Increasing the maximum amount of graphite mined is the focus of the company's business, enabling the Group to benefit from cost advantages.
On February 21, 2024, Yixiang New Energy, an indirect wholly-owned subsidiary of the company, obtained the official consent of the State Forestry and Grassland Administration to use the woodland. The cost was RMB 86.92 million to acquire the woodland use rights located in Heilongjiang, China. The company will apply to change the use of the woodland from woodland to industrial land.