Zijin Mining's 2024 Net Profit Is Expected to Increase by Approximately 51.5% YoY; 2025 Plans to Produce 1.15 Million mt of Mined Copper

On the evening of January 21, Zijin Mining announced that, based on preliminary estimates by its financial department, the net profit attributable to shareholders of the publicly listed firm for 2024 is expected to reach approximately 32 billion yuan, an increase of about 10.881 billion yuan compared to 21.119 billion yuan in the same period last year, up 51.5% YoY. The net profit attributable to shareholders of the publicly listed firm, excluding non-recurring gains and losses, is expected to reach approximately 31.4 billion yuan, an increase of about 9.783 billion yuan compared to 21.617 billion yuan in the same period last year, up 45.3% YoY.

Regarding the main reasons for the expected performance growth in this period, Zijin Mining stated: (1) In 2024, the company expects to produce 1.07 million mt of mined copper (including 195,000 mt from Kamoa Copper's equity production; 2023: 1.01 million mt), 73 mt of mined gold (2023: 68 mt), 450,000 mt of mined zinc (lead) (2023: 470,000 mt), and 436 mt of mined silver (2023: 412 mt). (2) In 2024, the company's main metal mineral products are expected to see simultaneous increases in both volume and price, with the rising cost trend effectively curbed. The operational capabilities of overseas subsidiaries are expected to improve, enhancing profitability.

Zijin Mining also announced its major mineral production plans for 2025: The company proposed the following major mineral production plans for 2025: 1.15 million mt of mined copper, 85 mt of mined gold, 440,000 mt of mined zinc (lead), 40,000 mt of lithium carbonate equivalent, 450 mt of mined silver, and 10,000 mt of mined molybdenum.

On the evening of January 16, Zijin Mining announced that its wholly-owned subsidiary, Zijin International Holdings, plans to acquire a total of 392 million shares of Zangge Mining held by Zangge Venture Capital, Sichuan Yonghong, Jifang Lin, and Xinsha Hongyun at a price of 35 yuan per share, representing a 24.82% equity stake, for a total transaction amount of 13.729 billion yuan. Before this transaction, the company already held a 0.18% equity stake in Zangge Mining through its wholly-owned subsidiary. Upon completion of the transaction, the company's overall equity stake will reach 25%, and Zijin International Holdings will gain control of Zangge Mining, consolidating its financial statements. The company stated that this acquisition will facilitate the integration of high-quality resources and enhance the investment value of both Zijin Mining and Zangge Mining. Zangge Mining's core assets include 100% equity in the Qarhan Salt Lake project in Qinghai, 70% equity in the Vientiane Bawo Potash Mine and Setani County Potash Mine projects in Laos, 24.01% equity in the Mamicuo Salt Lake in Tibet, 21.09% equity in the Longmuco Salt Lake and Jiezechaka Salt Lake in Tibet, and 30.78% equity in the Julong Copper Mine in Tibet.

In his 2025 New Year address, Zijin Mining Chairman Jinghe Chen stated that the third phase of the Kamoa Copper Mine in the DRC was completed and put into operation six months ahead of schedule. Once full production is reached, mined copper production will exceed 600,000 mt, making it the largest copper mine in Africa and the third largest globally. The supporting 500,000 mt copper smelter, the largest in Africa, is expected to commence production in H1 2025. The additional 3,000 mt/day beneficiation plant at the upper ore body of the Serbia Pek Copper-Gold Mine was completed two months ahead of schedule and successfully trialed. Preparatory work for block caving mining at the lower ore body and JM Copper Mine has been fully accelerated. The second phase expansion project at the Julong Copper Mine, with a capacity of 200,000 mt/day (Phase I: 150,000 mt/day), is under expedited construction, aiming for production by the end of 2025. The Juno Copper Mine project has been approved, targeting completion and production by June 2026. The Sawayardun Gold Mine has been completed and put into operation. Technological transformation and expansion projects at Guizhou Zijin, Shanxi Zijin, Continental Gold in Colombia, and Norton Gold Fields in Australia will further boost gold capacity.

Guolian Securities released its 2025 annual investment strategy for the non-ferrous metals industry, analyzing that from early 2024 to December 30, 2024, the Shenwan Non-Ferrous Metals Industry Index rose by 6.10%, ranking 15th among the 31 Shenwan Primary Industry Indices. Among these, the industrial metals, new metal materials, and minor metals sectors saw the highest gains, with increases of 15.27%, 10.71%, and 9.84%, respectively. The energy metals sector experienced the largest decline, with a drop of 18.48%. Regarding fund holdings, the allocation ratio of the non-ferrous metals sector in funds was 6.04%, 6.11%, and 5.41% in Q1, Q2, and Q3 2024, respectively, remaining at historically high levels. Among these, the copper, aluminum, and gold sectors saw significant increases in institutional allocation, with Q3 2024 holdings valued at 38.455 billion yuan, 17.885 billion yuan, and 17.34 billion yuan, respectively. Copper: Ore supply tightness is expected to transmit to the smelting end, supporting further increases in copper prices. In the short term, copper ore supply is continuously disrupted by factors such as power shortages and production accidents in major producing regions. In the medium and long-term, declining resource grades and insufficient mining capital expenditure are expected to constrain copper ore supply. Global copper concentrate production is projected to reach 22.79 million mt, 23.19 million mt, and 23.7 million mt in 2024, 2025, and 2026, respectively, up 430,000 mt, 400,000 mt, and 510,000 mt YoY. The increase in ore supply is expected to be far smaller than the increase in smelting capacity. In 2025, long-term contract prices for copper concentrate smelting and processing fees are expected to decline significantly, potentially leading to substantial production cuts at smelters. Ore supply tightness is expected to gradually transmit to the smelting end. From 2025 to 2026, the global surplus of copper cathode supply is expected to narrow continuously and turn into a shortage, supporting further increases in copper prices.

On December 31, China Galaxy Securities released a research report, assigning a "recommend" rating to the non-ferrous metals industry. Investment suggestions: Decisive macro logic is reversing, with the US Fed entering an interest rate cut cycle and domestic economic recovery transitioning from expectation to reality, potentially driving the non-ferrous metals industry into a new upward cycle. Currently, the valuation of the A-share non-ferrous metals industry remains at historically low levels, with the price-to-earnings ratio at the 16.64% valuation percentile over the past 10 years. It is recommended to focus on the gold sector, where the logic of mid-term gold price increases continues to play out, with Shandong Gold as a top pick; the copper sector, which benefits most from economic recovery and liquidity easing due to the widening copper ore supply gap, with Zijin Mining as a top pick; the aluminum sector, which is experiencing a profit bottoming point and multi-cycle upward resonance, with Shenhuo Co. and Yunnan Aluminum as top picks; and the rare earth sector, where supply and demand are improving, and prices and profitability are rebounding from the bottom, with China Northern Rare Earth as a top pick.