LB Group Completes RMB 100 Million Transfer of 79.28% Stake in Mingrui Zirconium Industry

On December 24, LB Group’s subsidiary Orient Zirconium Industry announced the transfer of its 79.28% stake in Mingrui Zirconium Industry to LB Group’s wholly-owned subsidiary, Baililian Hong Kong. The transaction, valued at RMB 100 million, has been completed, with funds successfully received.

This acquisition is of strategic importance to LB Group, enhancing its integration of the titanium, zirconium, and lithium industrial chains. Mingrui Zirconium Industry, based in Australia, focuses on the exploration, mining, processing, and sale of zirconium and other minerals. Its primary assets include the Mindarie Mine in Australia, 6 mining licenses, 7 exploration licenses, 1 mineral extraction lease license, and 6 multipurpose licenses, all valid.

However, zirconium production is capital-intensive with significant investment and long return cycles. As of July 31, 2024, Mingrui Zirconium Industry had total assets of RMB 945 million, total liabilities of RMB 1.222 billion, and negative net assets of RMB -277 million, indicating insolvency.

While Orient Zirconium Industry stands to benefit from increased cash flow and a potential turnaround, some shareholders have expressed dissatisfaction, arguing that the transaction relinquishes the rewards of years of investment in Mingrui Zirconium Industry just as it approaches a return period.