(Yicai Global) Oct. 13 -- Yahua Industrial Group has withdrawn its plan to invest in Canadian lithium and gold explorer Ultra Lithium due to changes in the international environment which could have an impact on mining, resulting in the slower development of mines, the Chinese lithium supplier said.

Yahua Industrial, which also deals in civil explosives, has signed an agreement with Ultra Lithium to terminate the investment deal and is not liable to pay compensation and other liabilities, the Ya’an, southwestern Sichuan province-based firm said yesterday.

Mining has not yet started at Ultra Lithium's lithium projects and no revenue is being generated, Yahua Industrial said. The termination will not have a significant impact on the company's production, operations and future development, nor will it harm the interests of the company and shareholders, it added.

Yahua Industrial has sufficient supply of lithium resources from existing channels, and will establish a broad multi-channel upstream network to ensure supply for future capacity expansion, it said.

In April, unit Yahua International said it will pay CAD5 million (USD361million) to acquire a 13.2 percent stake in Vancouver-based Ultra Lithium. It also planned to buy 60 percent of the Ultra Lithium subsidiary that has two lithium mining projects in Forgan Lake and Georgia Lake.

Business is booming for Yahua Industrial as the price of lithium salts surges. The firm is expecting net profit to almost sextuple in the third quarter from the same period last year to as much as CNY3.6 billion (USD501 million).

Unmoved by the news, Yahua Industrial’s share price [SHE:002497] was trading down 0.5 percent at CNY26.41 (USD3.68) as of 12 noon China time today.

Editor: Kim Taylor