Zijin Mining's net profit surpasses 50 billion yuan for the first time, marking the beginning of the "Post-Chen Jinghe Era" facing cyclical challenges

How will AI and the new management team address the challenges of commodity price fluctuations?

Recently, Zijin Mining (601899.SH) released its 2025 annual report. Thanks to the simultaneous growth in prices and output of main products like gold and silver, the company’s annual net profit for the first time surpassed 50 billion yuan.

The report shows that Zijin Mining achieved operating revenue of 349.08 billion yuan in 2025, a year-on-year increase of nearly 15%; net profit attributable to the parent was 51.8 billion yuan, up 61.55%. Behind these impressive results is the full bull market in metals like gold, silver, and copper in 2025, with both volume and prices rising. The company plans to distribute a cash dividend of 3.8 yuan per 10 shares (tax included). Coupled with the interim dividend of 5.85 billion yuan already paid, the total cash dividend for the year will reach 15.95 billion yuan, setting a new high since the company’s listing.

However, just before the release of the annual report, the gold market experienced intense volatility. The hawkish signals from the Federal Reserve, combined with ongoing US-Iran conflicts, caused gold and silver prices to plummet back to early-year levels overnight. Commodity cycles are historically highly volatile, posing a real challenge for mining companies. 2026 marks Zijin Mining’s first full fiscal year after the founder Chen Jinghe stepped down, and the new management team will face unprecedented challenges.

A “Harvest Year” of Volume and Price Growth: A Comprehensive Breakthrough from Resources to Capital

2025 was a standout year for non-ferrous metals, and for giants like Zijin Mining, it was also a bumper year. The company’s performance showed a “multi-point bloom,” with explosive growth in mineral gold and mineral silver being the most notable highlights.

The annual report indicates that mineral gold production reached approximately 89.5 tons, a 22.77% increase year-on-year. Gold prices surged by 65% in 2025, setting a record high. The volume and price increase of gold became the main driver of Zijin Mining’s profit growth last year. The gross profit margin for mineral gold ingots reached 58.79%, up 12.63 percentage points year-on-year; for gold concentrates, it was 73.89%, up 5.25 percentage points.

In terms of silver, Zijin Mining produced 4.39 million tons of mineral silver in 2025, an increase of 30,000 tons. The gross profit margin was 69.15%, up 8.15 percentage points, making it China’s largest mineral silver producer.

Copper remains Zijin Mining’s traditional strength, continuing to serve as a “ballast stone.” In 2025, the company produced 1.085 million tons of copper from mines, a 1.56% increase year-on-year, maintaining the top position in Asia and ranking among the top four globally for three consecutive years. Although the growth rate slowed, benefiting from high copper prices throughout the year, the gross profit margin of mined copper remained high.

Notably, the second phase expansion of the Tibet Julong Copper Mine was completed and put into operation in January 2026. This will become the core engine for future explosive growth in copper production. Once fully operational, Julong Copper Mine’s annual capacity will reach 300,000 to 350,000 tons. With the planned third phase, it is expected to become the largest copper mining and beneficiation project in the world.

In the lithium sector, Zijin Mining achieved a strategic breakthrough from “0 to 1” in 2025. During the reporting period, the Laguocuo salt lake lithium mine, 3Q salt lake lithium mine, and Xiangyuan hard rock lithium mine were completed and put into production, with lithium carbonate equivalent output soaring from zero to 25,500 tons. According to plans, by 2028, the company aims to reach a capacity of 270,000 to 320,000 tons.

In 2025, lithium carbonate prices experienced intense fluctuations—from lows to a strong rebound in the second half. The main reasons were the sustained high growth of global new energy vehicles and the unexpected expansion of the energy storage market, while global lithium supply faced increased uncertainty.

Moreover, the “Zijin system” capital map is accelerating its formation. During the period, Zijin Mining successfully acquired the A-share listed mining company Zangge Mining (000408.SZ), marking the company’s largest single investment ever. It also successfully spun off Zijin Gold International (02259.HK) for H-share listing, raising HKD 28.7 billion. The company’s market value has entered the top three among global metal mining enterprises.

Balancing High Growth Goals and Cyclical Fluctuations: The First Major Challenge After “Chen Jinghe”

Zijin Mining set production targets for 2026: 105 tons of mineral gold, 520 tons of mineral silver, 1.2 million tons of mineral copper, and 120,000 tons of lithium carbonate equivalent. This means that, based on the high base in 2025, the company plans to achieve double-digit growth of 17%, 18%, and 11% respectively in gold, silver, and copper.

However, recent sharp adjustments in gold and silver markets have not only put short-term pressure on Zijin Mining’s stock price but also raised concerns about whether the volume and price growth effects can continue. In March, hawkish signals from the Federal Reserve’s interest rate meetings caused gold and silver prices to plummet sharply, with further capital outflows amplifying the decline. On March 22, London spot gold closed at $4,491.67 per ounce, down 3.42% for the day, hitting a new low since January 12. London silver closed at $67.9 per ounce, down 27.6% in March, erasing all gains from January and February. As a result, Zijin Mining’s A-share stock price fell 20% in March, reaching a new low since December 19 of the previous year.

More concerning is that gold’s safe-haven attribute completely failed during this correction. The ongoing escalation of US-Iran conflicts, near-stagnation of shipping through the Strait of Hormuz, and Brent crude oil prices exceeding $110 per barrel caused market fears about interest rates to far surpass geopolitical safe-haven concerns. Gold’s financial attribute overshadowed its safe-haven role, creating a strong transmission chain of “hawkish policies, rising US Treasury yields, and gold selling,” which pressured gold prices.

For Zijin Mining, macroeconomic changes and commodity price fluctuations pose significant challenges to performance. The 2025 performance growth heavily depends on rising gold and silver prices, but such increases are unlikely to be replicated in 2026.

The company also mentioned in its annual report that the macro fundamentals supporting gold price increases remain solid. However, on the margins, close attention should be paid to US inflation pressures, localized liquidity risks, and policy uncertainties that could cause temporary disruptions.

Beyond gold and silver, Zijin Mining expects that in 2026, the main themes in copper markets will revolve around “macro battles” and “structural shortages.” The structural growth driven by new energy, electrification, and artificial intelligence infrastructure is clear, effectively offsetting cyclical fluctuations in traditional sectors. Regarding zinc, the core theme for 2026 is oversupply, with zinc prices likely to fluctuate downward, entering a trend of decline from the second half of the year.

Among Zijin Mining’s main products, lithium carbonate has the fastest growth rate. With the global energy storage boom, this business is receiving high market attention. Looking ahead to 2026, Zijin Mining believes the lithium industry is shifting from oversupply on paper to a tight balance, with prices expected to reverse upward. The global energy transition remains a major demand driver, while supply faces growth and risks. Large projects in Australia, Africa, and South America are ramping up production, becoming key sources of incremental supply.

2026 will be the first year of the “post-Chen Jinghe” era for Zijin Mining—founder Chen Jinghe retired last November. Facing intensified commodity price volatility, increased complexity of global operations, policy uncertainties in overseas projects, and ongoing geopolitical tensions, new Chairman Zou Laichang emphasized in the annual report that the company will “shift from ‘scale leadership’ to ‘value-driven’ strategy,” and proposed the guiding principles of “improving quality, increasing production, controlling costs, and enhancing efficiency.”

Whether Zijin Mining’s planned growth in gold and silver production can be smoothly realized, how much incremental performance can be driven by lithium capacity releases, and whether the expansion of Julong Copper will further amplify structural demand are not only the key highlights for the company’s 2026 performance but also the first major test for the new management team.