Industry Leader Series No. 62 — Zijin Mining

II. Zijin Mining’s Financial Performance ・ Revenue grew steadily from RMB 3 billion to nearly RMB 350 billion. ・ Non-recurring profit did not grow as steadily as revenue; instead, it exhibited pronounced cyclical volatility. However, unlike other cyclical companies, Zijin Mining has never posted a loss. Its latest annual net profit reached RMB 50 billion. ・ ROE likewise displayed cyclical fluctuations—peaking near 57% and bottoming at around 6%. This suggests that when the company’s net asset value trades near 1x book value, it often presents an excellent buying opportunity. ・ Institutional analysts expect the company’s net profit to reach RMB 90 billion over the next two years. III. Business Analysis of Zijin Mining ・ Taking its 2025 financial report as an example: total annual revenue was RMB 349 billion; labor costs amounted to RMB 252.2 billion—a reasonable figure for a capital- and labor-intensive business. Sales expenses totaled only RMB 800 million (a negligible 0.02% of revenue), indicating robust market demand and zero sales difficulty for its products as an industry leader. Selling, general and administrative expenses plus interest expenses totaled approximately RMB 29 billion, leaving gross profit at roughly RMB 73 billion. ・ Investment income stood at RMB 6 billion. After deducting RMB 17 billion in taxes and other miscellaneous expenses, net profit came to approximately RMB 50 billion—reflecting a sound and transparent financial structure. ・ Zijin Mining’s core business model centers on globally distributed, self-operated mines extracting copper and gold—while also producing by-products such as zinc, silver, and lithium. Its profitability is tightly linked to global copper and gold prices: profits surge during price upswings, while low-cost production capacity and scale help stabilize revenue and profit during downturns. A key profit driver is acquiring distressed or low-grade mines at favorable valuations to lower overall mining costs. ・ Nonferrous metal mining is a highly cyclical industry, closely tied to macroeconomic conditions, infrastructure and real estate investment, and new-energy sector demand. Commodity prices fluctuate sharply and frequently. The industry is extremely capital-intensive, with long lead times for exploration, development, and construction of mines; massive upfront investments; slow payback periods; and nonrenewable resources. High-quality, scarce ore deposits are fiercely contested. Globalization is widespread across the sector, while overseas geopolitical policies, environmental regulations, and occupational safety requirements continue tightening—raising both implicit operational and compliance costs year after year. ・ Zijin Mining is China’s undisputed leader in copper and gold mining—and the country’s largest integrated mining enterprise. It ranks first domestically in both gold and copper reserves and output, and globally belongs to the top tier of copper and gold producers. Its resource base, production capacity, and global deployment capability far surpass those of domestic peers. It is among the very few Chinese mining firms capable of developing and operating large-scale transnational mining projects. ・ Key operational challenges are evident: (1) earnings are highly dependent on commodity prices, limiting resilience during cyclical downturns; (2) a substantial portion of high-quality assets is concentrated in multiple high-risk overseas countries and regions, exposing the company to policy shifts, tax hikes, community disputes, and political instability—making overseas project oversight difficult and uncertain; and (3) the company has pursued aggressive expansion through frequent acquisitions and capacity expansions, resulting in a debt-to-equity ratio above the industry average and significant financial leverage pressure, with interest expenses continuously eroding profits. IV. Valuation and Pricing From the perspectives of profit growth and business model, highly cyclical companies typically sustain long-term P/E multiples of around 10x in capital markets. During bull markets with ample liquidity, they may trade at premiums up to 20x. Zijin Mining’s current visible net profit stands at RMB 50 billion, with forward expectations at RMB 90 billion. Clearly, the current market environment reflects a historic bull market. Thus, the present RMB 50 billion profit justifies a 20x multiple, while the projected RMB 90 billion profit aligns more reasonably with a 10x multiple—implying a plausible market capitalization range of RMB 90–100 billion.

Zijin Mining’s Overseas ‘Gold Rush’: Largest Acquisition Plan Changes Course—from Full Acquisition to Minority Stake

In fact, Zijin Mining is not solely focused on gold assets. In 2025, it executed a major strategic move: on the evening of January 16, 2025, Zijin Mining announced plans to acquire control of Chenguang Mining, purchasing a 24.82% equity stake for RMB 13.729 billion. Upon completion, Zijin Mining held a combined 25% stake, becoming Chenguang Mining’s largest shareholder. On April 18, the transaction received approval from state-owned assets regulators and antitrust authorities; by early May, share transfer registration was finalized—progress was remarkably swift. Source: Company announcements Notably, Chenguang Mining’s core assets include: 100% rights to the Qinghai Cha’erhan Salt Lake project; 70% rights to the Laos Vientiane Ba’e Potash Mine and the Xaisomboun Potash Project; a 24.01% stake in the Tibet Mamicuo Salt Lake; a 21.09% stake in the Tibet Longmucuo and Jiezechaka Salt Lakes; and a 30.78% stake in the Tibet Julong Copper Mine—none of which relate to the gold sector. Thus, gold-related acquisitions represent merely one facet of Zijin Mining’s broader strategy of mineral diversification and international expansion. Over the past five years, examples include: in 2021, acquiring 100% of Canada’s Neo Lithium Corp. to gain access to lithium brine resources targeting battery-grade lithium carbonate; in 2022, acquiring four asset packages from Dun’an Group and Hunan Daoshui Xiangyuan Lithium Polymetallic Mine for lithium resources, as well as acquiring the Xinjiang Wuqia County Sawayaerdun Gold Mine and a 30% stake in Shandong Haiyu Gold Mine for gold assets, and the Anhui Shapinggou Molybdenum Mine; in 2024, acquiring 100% of Ghana’s Akyem (Akim) Gold Mine and 100% of Peru’s La Arena Gold Mine and its Phase II project; and in 2025, acquiring Kazakhstan’s Raygorodok (RG) Gold Mine. Worth special mention is Zijin Mining’s first overseas foray—its minority investment in Canadian Peak Mining Company in 2005—marking over two decades of accumulated international experience. Source: Zijin Mining official website, screenshot date: August 10, 2026 Reviewing these acquisition cases reveals a clear pattern: domestic acquisitions emphasize scale and mineral diversification, whereas overseas deals focus on gold assets and global footprint. Zijin Mining’s 2025 Annual Report states its commitment to a 'resource-first' strategy, prioritizing gold and copper as core minerals, comprehensively building a globally competitive lithium business unit, consolidating and enhancing output and resource reserves of zinc, silver, molybdenum, and other metals, and actively pursuing merger-and-acquisition opportunities involving high-quality listed companies—seeking to become controlling shareholders or significant minority investors to deeply empower portfolio companies and fully unlock their resource and value potential. Concurrently, the company aims to become one of the world’s largest lithium and molybdenum producers. The 2025 Annual Report further emphasizes: 'We attach great importance to lawful and compliant operations, intensify research into internationally accepted rules and country-specific legal and policy frameworks, thoroughly understand international standards governing global operations, and strictly adhere to the legal, ethical, social, economic, and human rights standards of host countries and regions—ensuring safe and reliable asset operations.' Zijin Mining’s historical annual reports show steady growth in revenue, attributable net profit, and net cash flow from operating activities over the past decade—with sharp increases in 2025. Ten-year growth rates stand at 342.71%, 2713.97%, and 776.89%, respectively. Its expansion has been notably stable—especially in attributable net profit, reflecting strong shareholder returns and offering valuable lessons for other Chinese enterprises venturing overseas.

Zijin Mining's Liu Xiaokang: Chinese Mining Firms Must Focus on Overseas Sustainability

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Zijin Mining's Liu Xiaokang stated at the Caixin Summit that Chinese mining firms must prioritize overseas sustainability amid rising resource nationalism and geopolitical pressures, citing specific regulatory burdens like DRC community funds.

caixin

2026-11-13

Zijin Mining's Liu Xiaokang: Chinese Mining Firms Must Focus on Overseas Sustainability

Zijin Mining's Liu Xiaokang: Chinese Mining Firms Must Focus on Overseas Sustainability

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