Huili Resources (Group) Limited (stock code: 1303)
About Company
Huili Group has commenced the coal business since 2019. The Group first started out its coal trading business in 2019 through two PRC-incorporated indirectly owned subsidiaries in Shanxi Province, the People’s Republic of China (the “PRC”). Later in 2022, the Group has set a milestone in its coal business through expanding …
Coal Business
The Group has commenced the coal business since 2019. The Group first started out its coal trading business in 2019 through two PRC-incorporated indirectly owned subsidiaries in Shanxi Province, the People’s Republic of China (the “PRC”). Later in 2022, the Group has set a milestone in its coal business through expanding its geographical presence in Hainan, the PRC and moving upstream and diversifying to the coal processing business and coal service supply chain business.
In January 2022, The Group, through an indirect wholly-owned subsidiary of the Company completed the acquisition of 95% of the equity interest in Shanxi Fanpo Clean Energy Technology Company Limited (“Shanxi Fanpo”) (山西反坡清潔能源科技有限公司), allowing the Group to move upstream in the coal industry, broaden the Group’s source of income and diversify its business portfolio.
Shanxi Fanpo is principally engaged in the sales of coal and the operation of coal washery. Shanxi Fanpo is in the course of constructing a coal washery in Changzhi city, Shanxi Province, the PRC and was one of the Group’s coal suppliers. The coal washery is set up to remove impurities in raw coal, and to classify high quality coal and inferior coal to improve coal utilization efficiency and reduce coal pollutant emission. The coal washery is designed to have a maximum throughput capacity of approximately 20,000 tonnes per day.
The customers of this business segment are mainly local coal traders and energy companies in the PRC.
Riding on the increasing demand on coal, the Group will continue to actively seek for opportunities to develop its coal business, either through value-added mergers and acquisitions or strategically re-allocating its internal resources to expand the current coal business or diversify into other business scopes within the coal industry. Currently, the Group is actively exploring the potential to fully utilise the Group’s expertise and network in the industry through widening the scope of coal business.
Mining Business
Our group participates in non-ferrous ore mining and processing. The diversified non-ferrous metal minerals covered by the Company’s operation include nickel, copper, zinc and lead in Xinjiang province, China. The mining and exploration tenements and ore processing plants in Xinjiang are located close to the municipal city of Hami, which is approximately 400 km south east of Urumqi, the capital of Xinjiang Uygur Autonomous Region. At present, we primarily mine and process nickel and copper ores. Of these metals, we believe the fast-growing domestic demand for nickel provides a particularly favorable business environment for our enterprise, which supplies quality nickel and copper concentrates to the market.
Nickel’s hardness and resistance to oxidation make it an especially valuable commodity in numerous industries. Thus, it is no surprise that China is the world’s leader in terms of refined nickel consumption. However, the domestic supply of nickel does not match its demand growth, and this supply-demand imbalance further favors our present business environment.
In general, we enjoy sizeable and growing non-renewable mineral reserves, which are fundamentally essential for our long-term, sustained growth. Moreover, we remain well placed to gain from the many mining prospects that exist in Xinjiang, which accounts for approximately 5% of China’s total annual production of nickel content in ore and concentrates. This is mainly because our experienced management team already brings a lot of knowledge to the table in terms of other assets that explore, mine and process nickel and other non-ferrous metal ores in Xinjiang. Through our in-depth evaluation of these assets, we will identify the best ones to acquire and aid our organic growth.
Including geologists and engineers who are expert in mineral reserve exploration to top-notch mine construction, operation and safety, our senior management team has formulated a series of cohesive business strategies to help us become one of China’s leading diversified metal mining companies. These include ramping up our mining and ore processing capacities while keeping a careful eye on the price trends of our respective commodities, and expanding our ore reserves through both organic and inorganic expansion. Moreover, we will reduce our business risks and broaden our revenue base by expanding our product portfolio, as well as our geographical presence. We will also strengthen our relationships with both existing and new customers to more sufficiently meet their supply needs, all while maintaining the strictest protocols to help protect and sustain our environment.
Besides our principal business in non-ferrous ore mining, the Company has continually explored acquisition opportunities in natural resources industry with promising return in order to expand and diversify the business and to enhance the investment return of the Group and the shareholders as a whole. The Group is currently looking for opportunities of co-operative exploration in order to materialise the exploration permit to provide synergy effects to the Group’s existing mining permit and to develop the mines jointly to maximise the economic values of the Group’s valuable resources.
Financial Business
To diversify the business activities and broaden the revenue base of the Group, the Group also conducted the financial business in the PRC through a PRC-incorporated indirectly owned subsidiary.
