Zijin Mining's New Management Responds to Market Concerns on M&A Strategy, Rising Costs, Lithium Mining Profitability Outlook, and Strategic Layout | Direct Coverage of Earnings Call

Cailian Press, March 23 — (Reporter Liang Xiangcai) Zijin Mining (601899.SH) unveiled its new management team for the first time at the annual earnings presentation. Company executives responded to investor concerns regarding acquisition strategies, rising costs, lithium mine profitability prospects, strategic layout, and more.

Regarding acquisition strategies amid high commodity prices and the acquisition of Chifeng Gold’s control rights, Vice Chairman and President Lin Hongfu stated that in the medium to long term, core factors such as changes in global governance order and excessive issuance of credit currency have not fundamentally changed. The logic for gold prices remaining high or even rising further remains unchanged.

He believes that Zijin Mining’s choice of mining types for acquisitions will focus on three main criteria: scarcity, appropriate scale, and alignment with future industry demand. Gold and copper remain the core minerals, lithium carbonate is a key focus in new energy minerals, and there is moderate attention to rare small metals with price elasticity. In terms of geographic layout, the company坚持s a globalization strategy, moderately increasing acquisition risk premiums in South America and Africa, while重点 increasing investment opportunities around China. The core logic behind acquiring Chifeng Gold is that its mines have good prospecting potential and capacity expansion potential.

Regarding the lithium market and the company’s lithium business plan, management clearly stated that, according to their previous plan, by 2028, they aim to achieve a lithium carbonate production scale of 320,000 tons equivalent, likely ranking among the top three globally.

Lin Hongfu predicts that the next 10-15 years will be a period of strong demand for lithium carbonate, with sustained demand from new energy vehicles, AI data centers, and energy storage sectors. The long-term price is highly likely to stay around 150,000 yuan per ton. On the profitability side, overseas lithium projects have slightly higher costs, with the company’s overall costs roughly around 50,000 yuan per ton. As capacity is released and scale effects take hold, costs will further decline. At a price level of 150,000 yuan per ton, there is ample profit margin.

Regarding rising costs of mineral products, CFO Wu Honghui said that the main factors include declining grades at key mines, increased transportation costs due to deeper mining, and upfront costs during the transition period of newly acquired enterprises. According to internal company statistics, only four of the main mines have increased grades. Currently, the company’s C1 copper cost (direct cash cost) and gold sustaining costs remain among the lowest globally.

For future cost outlooks, Wu Honghui said the company will pursue four main paths to reduce costs: first, promoting unmanned and intelligent mining to improve transportation and equipment efficiency and reduce energy consumption; second, leveraging technological innovation to release capacity and improve mineral processing recovery rates; third, conducting large-scale global procurement and promoting domestic manufacturing of equipment; and fourth, moving the overseas pre-settlement centers forward to strengthen cost control. The cost of lithium carbonate is expected to further decrease as capacity is released.

Regarding Zijin Mining’s future strategic layout, Lin Hongfu said that the company will follow the plans of Founder and Honorary Chairman Chen Jinghe. The new management team will continue to focus on market-oriented mechanisms, global layout, and core mining operations. The company will prioritize “production growth” as a core task, increasing technological upgrades, expansion, and exploration to increase reserves at existing mines.

Currently, Zijin Mining’s more than 30 mines are distributed across 17 countries worldwide. Its global management model is a key focus for investors. Lin Hongfu stated that in terms of digital transformation, the company will invest hundreds of millions of yuan annually to build a global data operation and management platform and develop an intelligent operation system.

According to Zijin Mining’s recent 2025 financial report and estimates by brokerage institutions, the costs of core mineral products have increased to varying degrees. Among them, the unit operating cost of mineral gold is 275.24 yuan per gram, up 19.34% year-on-year; mineral copper is 25,461 yuan per ton, up 11.05%; mineral zinc is 9,921 yuan per ton, up 13.58%; and mineral silver is 2.12 yuan per gram, up 14.72%.

Financially, the company is projected to achieve revenue of 349.079 billion yuan in 2025, a year-on-year increase of 14.96%, and net profit attributable to the parent company of 51.777 billion yuan, up 61.55%.