Recently, BRETON disclosed that it has inked a letter of intent for collaboration with Inhoyi Investment (Private) Limited. The objective is to forge a long-term partnership in the domains of electric mining truck sales representation, as well as mining equipment investment and operation. This letter of intent remains in effect until September 26, 2036.

As outlined in the letter of intent, BRETON plans to designate Inhoyi as a non-exclusive agent at an appropriate juncture. Inhoyi will then be responsible for promoting, selling, and maintaining electric mining trucks for customers across Zambia, Zimbabwe, and Mozambique. Concurrently, BRETON aims to invest in the development of a 30MWp photovoltaic and 60MWh energy storage project at a suitable time, along with acquiring mining equipment. Upon the completion of construction or procurement of the relevant equipment, BRETON or its affiliates intend to transfer it to Inhoyi at an opportune moment, coupled with providing long-term operation and maintenance services. Following the completion of equipment investment and the generation of sales revenue from mining projects, Inhoyi plans to share the profits from these mining projects with BRETON.

This letter of intent signifies BRETON's expansion of its African business from merely 'vehicle sales' to encompass three key areas: 'vehicle sales + energy storage investment + involvement in mining operations.' The primary hurdle for introducing electric mining trucks into African mining regions lies not in the vehicles themselves but in the feeble mining area power grid, exorbitant diesel power generation costs, and inadequate energy replenishment infrastructure. By incorporating photovoltaic and energy storage solutions, BRETON effectively broadens the application scenarios of electric mining trucks from 'electrified locations' to 'locations capable of operating independently of the power grid'.

From a business model standpoint, BRETON initially invests in and constructs equipment, subsequently selling it to Inhoyi at an opportune time while retaining operation and maintenance services and profit-sharing rights. This approach resembles a blend of 'equipment sales + long-term services + project profit-sharing'. Although this model demands substantial capital investment from the automotive company, once executed, the steady revenue stream from subsequent operation and maintenance and energy management services will prove more reliable than relying solely on vehicle sales.

It is crucial to highlight that the current agreement between the two parties is a letter of intent for cooperation and does not represent a legally binding transaction commitment. Specific core terms, such as the scope of authorization, investment amount, equipment pricing, and profit-sharing ratio, have yet to be finalized, necessitating the signing of a formal agreement at a later date. The letter of intent's validity until 2036, spanning a decade, underscores that this is a long-term strategic move rather than a short-term transaction.

BRETON stands as a prominent domestic enterprise in the realm of new energy construction machinery, boasting a product range that includes electric mining trucks, electric heavy trucks, electric loaders, and more. While the acceptance of new energy construction machinery in the African mining market is on the rise, risks associated with local politics, exchange rates, payment collection, and infrastructure cannot be overlooked. The success of this cooperation in transitioning from a letter of intent to a formal contract hinges on whether Inhoyi's local mining resources are genuinely accessible and whether BRETON can shoulder the capital and operation and maintenance investments in the initial phases of overseas projects.