(Yicai) Sept. 9 -- State-owned metals behemoth China Minmetals is taking control of Qinghai Salt Lake Industry, which owns part of the mining rights to China’s largest lithium salt lake, in a significant step to set up new industry giant China Salt Lake Group to ensure the supply of this key material for electric car batteries to companies within the group.

China Minmetals plans to pay cash for 681 million shares in Qinghai Salt Lake, which holds partial mining rights to Qarhan Salt Lake, that are currently held by its controlling shareholder Qinghai State-owned Assets Investment and Management and concerted party Wuhu Xinzeqing, Qinghai Salt Lake, which also runs the country’s largest potash fertilizer production base, said yesterday.

Once the transaction is complete, the newly formed China Salt Lake Group, which is owned by China Minmetals, will become the controlling shareholder, replacing Qinghai State Assets Investment, the Golmud-based firm said. And China Minmetals will become actual controller, replacing the State-owned Assets Supervision and Administration Commission of Qinghai province, it said. The sale is pending regulatory approvals including an antitrust review.

The Qinghai provincial government, which owns most of China's salt lake resources, proposed setting up China Salt Lake Group in 2022 to establish a collaborative mechanism for the priority supply of materials between upstream and downstream companies with the group.

In May, Qinghai State Asset Investment and Beijing-based China Minmetals, which has assets of CNY1.1 trillion (USD154.6 billion) and eight listed subsidiaries, said they will build a world-class salt lake industrial base, Qinghai Salt Lake said.

China Minmetals owns 53 percent of China Salt Lake Group, which has a provisional registered capital of CNY10 billion, while Qinghai State Assets Investment holds 28.2 percent and the Qinghai Provincial Government SASAC owns the remainder.

The move is part of the SASAC's efforts to promote the restructuring and integration of state-owned enterprises, analysts said. State-owned central enterprises are being requested to accelerate their layout in strategic emerging industries as part of broader reform initiatives.

Qinghai Salt Lake’s share price [SHE:000792] closed up 2.7 percent at CNY15.12 (USD2) today.

Editor: Kim Taylor