(Yicai) Sept. 18 -- China’s Zangge Mining and Yuntu Holdings said they plan to jointly spend USD171 million to take control of Kanga Potash, which is developing a pre-production Kanga potash mine in the Republic of the Congo, with the aim of increasing their access to high-quality potash.

Zangge and Yuntu intend to set up a joint venture in Singapore, with the former indirectly holding a 75 percent stake and the latter indirectly owning the rest, to fund and acquire 92 percent of Kanga Potash, the pair announced separately late yesterday. Sarmin Group, an existing shareholder of the target company, will keep the remaining 8 percent.

Registered in Mauritius, Kanga Potash's key assets include the mining permit for the Kanga potash mine and exploration rights for the Loango potash block in Congo, Zangge and Yuntu pointed out. It posted a net loss of USD1.7 million in the eight months ended Aug. 31, they added.

Zangge’s stock price [SHE: 000408] closed 1.7 percent higher at CNY72.16 (USD10.77) in Shenzhen today, while Yuntu [SHE: 002539] added 0.6 percent to end at CNY12.31 (USD1.84).

The Kanga mining permit covers a 321-square-kilometer area and is valid though June 2047. Kanga Potash also secured a 25-year mining convention with the Congolese government in August 2023, the firms said.

Under the permit, the deposit contains 810 million tons of measured potassium chloride resources with an average grade of 17.1 percent, plus 1.18 billion tons of inferred resources at a 16.5 percent grade. Total resources amount to two billion tons at an average grade of 16.7 percent.

Potash is a group of potassium-containing minerals and salts, which is mainly used as an agricultural fertilizer.

Zangge will indirectly control the target assets and act as the lead on the Kanga potash mine, the Golmud-based company said, adding that it will push forward pre-construction work, complete all regulatory approvals, and aim to start construction and commissioning early.

The acquisition will expand Yuntu's potash resources base, address a key gap in its upstream potash portfolio, and enhance long-term security of supply for a critical fertilizer raw material, according to the phosphate miner, which is also one of China's leading compound fertilizer makers.

 

Zangge Mining specializes in developing salt-lake mineral resources and is controlled by Zijin Mining, one of China's largest mining companies. Chengdu-based Yuntu as multiple phosphate mining rights and phosphate exploration permits.

Editor: Martin Kadiev