Spending 10.7 billion yuan, Lu'an Environmental Energy teams up with the controlling shareholder to compete for mining rights

Recently, according to disclosures from Lu’an Environmental Energy and the Shanxi Natural Resources Department, the company and its controlling shareholder, Lu’an Mining Group, collectively invested a total of 10.7 billion yuan on March 19 and March 20, and successively acquired coal exploration rights for two blocks in Su Village and Wang Village, Xuangyuan County, Shanxi Province.

Specifically, on March 19, Lu’an Environmental Energy and its controlling shareholder jointly acquired the coal exploration rights for the Su Village block in Xuangyuan County, Shanxi Province, at a price of 8.222 billion yuan. The block covers an exploration area of 47.65 square kilometers, with coal resources of approximately 49.178 million tons, including a potential resource of 7.5686 million tons. The proposed exploration period is five years. The starting bid for this block was 10 million yuan, and the final transaction price was 8.222 billion yuan, with a premium of 822 times.

The announcement revealed that this block is adjacent to the company’s headquarters and close to the existing Wuyang Coal Mine, highlighting its strategic location. After converting this exploration right into a mining license, the company can extend and continue mining based on the existing production system of Wuyang Coal Mine. The resource endowment and mining conditions are excellent, making it a long-term priority for the company to secure high-quality contiguous resources.

On March 20, the two parties again jointly competed and acquired the coal exploration rights for the Wang Village block in Xuangyuan County, Shanxi Province, at a price of 2.524 billion yuan. The exploration area of this block is 7.1492 square kilometers, with a proposed exploration period of five years. Public information shows that the starting bid was only 1.5 million yuan, and the final transaction price was approximately 1,683 times the starting bid.

Securing two coal exploration rights within 48 hours will strongly support the company’s resource reserve structure. The announcement stated that this acquisition aligns with the company’s main business development focus and long-term resource strategic layout, effectively increasing coal resource reserves and continuously enhancing the company’s core security capabilities and overall competitive advantage.

Lu’an Environmental Energy’s main business includes raw coal mining, coal washing and selection, coke smelting, and clean coal technology development and utilization. Its main products include thermal coal and metallurgical injection coal. Its controlling shareholder, Lu’an Mining Group, is a key state-owned enterprise under Shanxi Province, affiliated with Lu’an Chemical Group.

Regarding performance, affected by changes in the coal industry market environment, Lu’an Environmental Energy’s operating results have declined significantly in recent years. From 2022 to 2024, the company achieved revenues of 54.297 billion yuan, 43.137 billion yuan, and 35.85 billion yuan, respectively, with year-on-year changes of +20.27%, -20.55%, and -16.89%. During the same period, net profits attributable to the parent were 14.175 billion yuan, 7.922 billion yuan, and 2.45 billion yuan, nearly halving consecutively.

In 2025, due to the overall downward cycle of coal market prices, the domestic commodity coal supply and demand are increasingly loose, leading to a significant decline in the company’s average selling price of commodity coal. Coupled with constraints such as complex geological structures, changes in coal seam conditions, and mining connection issues affecting some of the company’s main mines, coal production and sales have decreased year-on-year, and net profit has declined again.

According to the latest performance forecast, the company expects to achieve a net profit attributable to the parent of 1.08 billion to 1.32 billion yuan in 2025, a decrease of 46.12% to 55.92% year-on-year; it also forecasts a net profit after non-recurring gains and losses of 839 million to 1.079 billion yuan, down 54.74% to 64.81% year-on-year.