Analyzing the Development History of Luoyang Molybdenum: How a World-Class Mining Giant Was Built | In-Depth

In 1997, the ancient capital of Luoyang, the municipal government officially established Luoyang Molybdenum (603993.SH), focusing on molybdenum, tungsten, and gold mining.

However, the Asian financial crisis soon erupted, causing global molybdenum prices to plummet to historic lows, less than $8,000 per ton, with molybdenum oxide dropping below $4 per pound at one point.

Coupled with rigid management mechanisms and outdated technology and equipment, Luoyang Molybdenum fell into a negative cycle of “more mining leads to greater losses,” with stagnant capacity, wage arrears lasting up to six months, becoming a “hot potato” for the local government.

To break the deadlock, multiple market-oriented equity reforms were carried out, introducing Hongshang Group led by Yu Yong and Ningde Times (300750.SZ), forming a “private sector mechanism + industrial resources” golden combination. Luoyang Molybdenum is arguably one of the most deeply reformed and successful enterprises in China’s mining sector.

Through counter-cyclical global acquisitions, Luoyang Molybdenum gradually became a leading player in copper-cobalt, molybdenum-tungsten, niobium-phosphorus fields, especially holding the world’s largest cobalt reserves and production, firmly controlling this strategic resource for new energy. The company also expanded via capital acquisitions, becoming a world-class “integrated trading and mining giant.”

Riding the wave of soaring commodity prices in recent years, the company achieved its fifth consecutive record-high performance, now growing into a global mining powerhouse with revenue surpassing 200 billion yuan and a market capitalization exceeding 400 billion yuan.

In less than 30 years, Luoyang Molybdenum has transformed from an obscure local small factory into a global mining giant, with a transformation trajectory that is one of the most thought-provoking business cases in China’s mining history.

Luoyang Molybdenum’s leapfrog development owes much to market-oriented reforms. Three major turning points not only demonstrated reform boldness but also unleashed strong growth momentum.

The predecessor of Luoyang Molybdenum can be traced back to a small molybdenum beneficiation plant built in 1969 in Luanchuan County, Luoyang City, leveraging its rich molybdenum resources, laying the foundation for its rise.

However, its subsequent development was particularly bumpy, especially after the 1997 Asian financial crisis, when international molybdenum prices collapsed, leading to losses. Data shows that at that time, half the staff were laid off, and the company owed over 50 million yuan in wages and pensions, almost facing collapse.

In 2004, Luoyang Molybdenum experienced a historic turning point. As the saying goes, “No breaking, no standing,” Luanchuan decisively launched reforms, introducing Hongshang Industrial Holding Group as a strategic investor, which invested nearly 180 million yuan for a 49% stake, becoming the second-largest shareholder. This investment, valued at less than 1.3 times PE at the time, marked the beginning of this “resource empire.”

Introducing private capital injected fresh vitality into the company, not only providing urgent funding but also bringing market-oriented management ideas.

After restructuring, Luoyang Molybdenum quickly entered a healthy development track. As molybdenum prices recovered, by 2006, the company achieved sales of 3.82 billion yuan and a profit of 1.515 billion yuan, completely reversing its fortunes. In April 2007, the company successfully listed in Hong Kong.

However, in the second year after listing, the global financial crisis struck again, impacting the mining market. Although the company completed its first mixed-ownership reform, issues like slow decision-making and bureaucratic inefficiency persisted.

In October 2012, Luoyang Molybdenum was listed on the A-share market, becoming one of the few domestic A+H dual-listed companies. Two years later, Hongshang Industry increased its capital and replaced Luoyang Mining Group as the largest shareholder. This marked the formal formation of a “state-owned capital participation + private capital control” ownership structure, further improving decision-making efficiency and market competitiveness, laying the groundwork for subsequent international mergers and acquisitions.

Its partnership with Ningde Times is even more instrumental in elevating it to a global mining leader.

The earliest cooperation dates back to 2016, when Hongshang invested 800 million yuan in Ningde Times. After Ningde Times went public, it gradually reduced its holdings, fully cashing out by mid-2025, returning over 20 billion yuan in total over nine years, with a profit multiple exceeding 50 times.

In return, Ningde Times reciprocated by investing $137.5 million in Bangpu Times, a subsidiary of Luoyang Molybdenum, acquiring a 23.75% stake in the KFM copper-cobalt mine. This investment secured Ningde Times’ priority procurement rights for 20% of the world’s cobalt resources and linked Luoyang Molybdenum with this major customer.

By 2022, Luoyang Molybdenum, already emerging in international markets and new energy materials, received Ningde Times’ favor. Luoyang Guohong Investment Group transferred all its shares in Luoyang Mining to Sichuan Times (a Ningde Times subsidiary).

Currently, Ningde Times indirectly holds 24.91% of Luoyang Molybdenum through Luoyang Mining Group (as of Q3 2025). The two companies form a “cross-shareholding + industrial synergy” “golden symbiosis” relationship.

Moreover, top executives from both sides hold positions in each other’s companies. Lin Jiuxin, Vice Chairman of Ningde Times’ Safety Production Committee, is now Vice Chairman of Luoyang Molybdenum; Jiang Li, Secretary of Ningde Times, is an Executive Director of Luoyang Molybdenum, ensuring seamless strategic and operational coordination.

These three major reforms have thoroughly transformed Luoyang Molybdenum, leading it from a small local factory focused on a single mineral to a world-class giant.

Luoyang Molybdenum operates in the “resources are king” sector, which is highly cyclical. Those who can accurately grasp cycle fluctuations can ride the waves of the cycle.

After listing on both HKEX and SSE in 2007 and 2012, the company secured ample capital, enabling modernization and expansion of domestic molybdenum-tungsten mines, laying the foundation for international acquisitions.

In 2013, Luoyang Molybdenum acquired an 80% stake in the NPM copper-gold mine in Australia for $820 million, marking its first step abroad. Considering its low contribution, the company sold it in 2023 for $756 million, which, despite not being a profitable buy-sell, yielded a 15% annualized ROI over ten years and enriched its overseas experience.

Subsequently, Luoyang Molybdenum accelerated overseas resource integration.

In 2015, amid a historic downturn in global mineral resources, with Vale losing $12.1 billion, Glencore $4.964 billion, Barrick $3.1 billion, and Rio Tinto $1.719 billion, Luoyang Molybdenum maintained a healthy balance sheet, keeping its debt ratio below 50%, and achieved a net profit of 761 million yuan, preserving ample resources during the industry trough.

In 2016, Luoyang Molybdenum began international acquisitions, first purchasing the Brazilian NML niobium mine (second largest globally) and CIL phosphate mine (second largest in Brazil) from Anglo American, securing its niobium and phosphorus foundation.

Between 2016 and 2020, it spent a total of $3.15 billion acquiring major interests in the TFM and KFM copper-cobalt mines in the Democratic Republic of Congo from Freeport, entering the new energy metals (cobalt) sector.

TFM is one of the highest-grade copper-cobalt mines globally, ranking fifth largest copper mine and second largest cobalt mine worldwide, with enormous exploration prospects. It has 30.14 million tons of copper resources at an average grade of 2.24%, far above the global average of about 0.5%.

KFM was acquired during the low copper price era in 2020 and is now jointly developed with Ningde Times. In April 2021, Luoyang Molybdenum transferred a 25% stake in KFM to Ningde Times’ subsidiary Ningbo Bangpu Times for $138 million. The two companies jointly develop KFM and share the copper-cobalt products proportionally.

In 2017, Luoyang Molybdenum shifted focus to mineral trading, completing the acquisition of the world’s third-largest base metals trader IXM in July 2019, transforming into an integrated international resource group.

While trading is large-scale, its profitability is weak. However, through IXM’s global sales network covering 62 countries, Luoyang Molybdenum gains real-time market intelligence and value synergy. For example, leveraging IXM’s trading platform, the company has low-cost access to new energy metals, including lithium resources in Bolivia and nickel in Indonesia. In 2024, IXM contributed 1.35 billion yuan in net profit, a 48% YoY increase, setting a record.

Starting in 2025, Luoyang Molybdenum entered the gold sector. In June 2025, it completed the acquisition of Ecuador’s Odin Mining’s Cangrejos gold mine, planning to start production before 2029; in January 2026, it spent $1 billion acquiring three gold mines in Brazil (Aurizona, RDM, Bahia) under Canada’s Equinox Gold. This marks the implementation of the “copper-cobalt-gold three-wheel” strategy, with an expected annual gold output increase of about 8 tons.

According to TTIR industry research, from 2007 to September 2025, Luoyang Molybdenum’s total external investment (cash flow) reached 257.629 billion yuan, making it a true global merger and acquisition leader in mining.

“Counter-cyclical M&A and low-cost development” are Luoyang Molybdenum’s key strategies for mining.

Mineral resources are recorded at historical cost, regardless of current market prices. Luoyang Molybdenum proactively bought copper resources worth about $4.3 billion during the copper price lows from 2016 to 2020, accumulating over 40 million tons of copper.

Driven by new energy and grid investments, along with geopolitical conflicts, international copper prices have risen sharply, with LME copper reaching $13,000 per ton. With low costs and large-scale mines that can operate for another 10-12 years, Luoyang Molybdenum has achieved a classic Davis double play amid cycle resonance.

In 2024, Luoyang Molybdenum produced 650,200 tons of copper, ranking ninth globally for the first time; in 2025, it is expected to produce 741,000 tons, maintaining its top ten position.

Cobalt, driven by copper, has helped Luoyang Molybdenum set profit records for six consecutive years. In 2025, net profit is projected to surpass 20 billion yuan, a 47.8%–53.7% YoY increase, with the stock price soaring 186% since 2025, and a total market cap exceeding 430 billion yuan, approaching the top ten worldwide.

Cobalt is known as the “industrial teeth” and a “major contributor” in new energy materials.

As a key component of cathode materials in power batteries, cobalt plays an irreplaceable role in stabilizing ternary lithium batteries, enhancing energy density, and extending lifespan. Despite recent trends toward high-nickel, low-cobalt batteries, cobalt remains indispensable in high-end power batteries.

Currently, the Democratic Republic of Congo accounts for about 75% of global cobalt supply, making the world heavily dependent on its policies. Among the top 10 global mines, 8 are located in Congo.

Cobalt often coexists with nickel and copper, and through early acquisitions of TFM and KFM, Luoyang Molybdenum has firmly controlled the global cobalt supply chain.

In 2024, cobalt production surged to 114,200 tons, a 106% increase YoY, with an expected 117,500 tons in 2025, maintaining its global first place; reserves are as high as 5.4 million tons, about 23% of the world’s total.

TFM has approximately 30 million tons of copper and 3.31 million tons of cobalt resources, with high grades. In 2023, the TFM hybrid mine was put into operation, with an annual cobalt capacity of about 17,000 tons. In 2024, TFM’s capacity was significantly released, and its cash costs are among the lowest globally, creating a strong competitive moat.

The KFM mine, officially operational in 2023, contains about 2.1 million tons of cobalt with a grade of 0.85%, making it one of the highest-grade copper-cobalt mines worldwide. In 2024, KFM’s cobalt capacity exceeded 50,000 tons, synergizing with TFM to support Luoyang Molybdenum’s position as the world’s largest cobalt producer.

Meanwhile, the $1.084 billion Phase II project of KFM started at the end of 2024, expected to be operational by 2027, further consolidating Luoyang Molybdenum’s dominance in cobalt mining.

Luoyang Molybdenum’s close ties with Ningde Times, the world’s largest cobalt supplier and power battery manufacturer, ensure seamless downstream demand. Ningde Times will underwrite KFM’s future cobalt capacity proportionally, effectively hedging market volatility.

Over-concentration of cobalt in one country poses risks. On February 22, 2025, Congo announced a four-month suspension of cobalt exports, causing prices to surge. After extending the ban, the country shifted from a total ban to quota-based exports, with remaining quotas only 18,000 tons for the rest of 2025. Following policy implementation, cobalt prices surged 140% in 2025.

Thanks to scale and cost advantages, Luoyang Molybdenum has contributed the largest incremental supply of cobalt globally over the past two years. Considering Glencore’s cobalt resources mainly from Mutanda and KCC mines, with declining grades and active production cuts, Luoyang Molybdenum’s influence in the global cobalt market is expected to grow further.

Congo’s quota policy aims to tighten supply via administrative measures, significantly reversing the supply-demand balance and providing strong support for cobalt prices.

According to the country’s decree, the total quotas for 2026 and 2027 are 96,600 tons of metals (including 87,000 tons of cobalt), a 55% reduction from 2024. Global cobalt supply will shift from oversupply to severe shortage.

Based on quota allocations, which are based on past three-year export volumes, Luoyang Molybdenum’s expansion over the past three years earned it a quota of 31,200 tons per year, accounting for 35%, the highest among all, far exceeding Glencore’s 18,800 tons.

With other players’ production constrained by quotas and other countries’ recycling and smelting technologies unable to fill the gap, Luoyang Molybdenum is poised to be a major beneficiary in the new cycle.

In the resource-driven sector, Luoyang Molybdenum’s strategy of contrarian mining acquisitions and low-cost development has enabled a super leap in “stockpiling money” – “stockpiling minerals” – “integrated trade and mining.”

Its profit secret lies in low costs and high grades, with two large high-quality mines serving as pillars. High grades mean Luoyang Molybdenum can produce 3–5 times more copper per ton of ore processed compared to competitors. Coupled with low costs, data suggests that a 10% increase in copper prices could boost Luoyang Molybdenum’s net profit by over 2 billion yuan.

Currently, the company aims to reach “one million tons of copper” annually within five years, increasing copper production from 600,000 to 800,000–1,000,000 tons, aiming to become a top-tier global mining company.

If copper underpins Luoyang Molybdenum’s scale, cobalt is its ultimate trump card. In terms of reserves and production, Luoyang Molybdenum is nearly the world’s dominant cobalt player, with 2025 cobalt output expected at 117,500 tons, capturing 37% of the global market—an almost “monopoly” level.

Meanwhile, the company is also the second-largest producer of molybdenum, white tungsten, and niobium, and has entered the gold sector to develop new growth points.

From a near-bankrupt county-level state-owned enterprise to a global mining leader, its institutional reforms, strategic layout, capital operations, and globalization efforts are worth emulating by any Chinese mining enterprise.

However, Luoyang Molybdenum also faces certain risks. First, the mining industry is inherently cyclical; every supercycle is likely to be followed by a downturn. Globally, no company can fully avoid this.

Second, although cobalt plays a strategic role in the new energy industry chain, it faces substitution challenges. Battery technology iterations are pushing toward low-cobalt or cobalt-free routes. If this trend gains market acceptance, the fundamental support for cobalt prices could collapse, eroding Luoyang Molybdenum’s advantages. Technological evolution remains a variable that must be closely monitored.

Third, Luoyang Molybdenum’s core assets are mainly in Congo, with high overseas revenue. Policy risks, labor conflicts, electricity, and transportation infrastructure issues could trigger chain reactions. Historically, many mining giants have been forced to adjust or sell assets due to regional conflicts, and these potential risks should not be underestimated.