Zijin Mining: As its foundation grows stronger on the path of expansion, can it recreate itself through its own strength in the future?

Recently, the mining sector has shown significant divergence in the capital market. Amid the general rise in metal prices, some companies have seen their market value multiply several times and remain high, while Zijin Mining, although rising in tandem, has a noticeably weaker increase compared to the industry average, with recent pullbacks closer to last year’s starting point. This phenomenon reflects the differentiated valuation logic in the A-share market for companies of different sizes and business structures.

Market observations indicate that large companies with a market value exceeding 100 billion yuan generally exhibit narrower volatility. Take Zijin Mining as an example: its revenue of 349.1 billion yuan and net profit of 51.8 billion yuan, both hitting record highs, but its 15% revenue growth and 62% profit growth still fall short of market expectations. Compared to companies like Chifeng Gold, which focus solely on a single metal, the latter leveraged its concentration in gold to achieve a stock price jump from 30 yuan to 50 yuan within a month, highlighting investors’ preference for “purity.”

The valuation challenges faced by diversified companies are reflected in production data. Zijin Mining plans to produce 1.15 million tons of copper and 85 tons of gold in 2025, but only gold production has met targets, with copper, zinc, and silver outputs falling short of expectations. Copper production was reduced by 60,000 tons year-over-year due to the Kamoya mine impact, but with the release of 300,000 tons of capacity from the second phase of the Dulong copper mine and ongoing expansion at the Pegmatite copper-gold mine, management expects copper output to surpass 1.5 million tons in 2026.

Cost control capabilities are a key differentiator in core competitiveness. Zijin Mining’s chairman pointed out that once metal prices normalize, the company’s internal growth quality will be the key factor determining long-term value. The company has reduced the mining cost of Zijin Mountain copper mine to 60% of the industry average through technological innovation, a “turning stone into gold” ability that supported its 28 billion yuan joint gold acquisition and ongoing global resource mergers and acquisitions strategy.

The pace of resource reserve expansion demonstrates the company’s strategic execution. Latest financial reports show that Zijin Mining’s reserves of core metals like copper, gold, and lithium have grown at an average annual rate of 18%, with lithium reserves increasing 4.2 times compared to three years ago. Although its current gold production ranks fifth globally and copper fourth, management has set a goal to double major product outputs by 2028, with several mines expected to rank among the top three worldwide in capacity.

Capital allocation strategies reflect the company’s development stage. The 15.9 billion yuan dividend in 2025 corresponds to a dividend yield of less than 1%, indicating a period of rapid expansion. Compared to peers, Zijin Mining allocates 72% of its operating cash flow to acquiring new mining rights. This “asset-heavy, dividend-light” model may impact short-term returns but has helped build a resource network covering 15 countries, including world-class deposits in Congo (Kinshasa) Kamoya and Serbia Pegmatite.

Market valuation logic shows clear divergence. Value investors focus on its fourth-largest global copper capacity and resilience against economic cycles, while trading-focused funds pay more attention to the elasticity brought by metal price fluctuations. This contradiction is fully reflected in stock price volatility: a 1% increase in copper prices theoretically adds 4.2 billion yuan to the company’s market value, but actual stock performance often discounts this due to business complexity. Professional institutions suggest that evaluating such companies should go beyond traditional valuation frameworks, focusing on two key variables: resource acquisition costs and technological conversion efficiency.