Did the "Zijin Group" achieve a perfect score on its first major test after taking control? Zangge Mining saw its profits double last year, with 70% of its earnings supported by returns from copper mine investments.

Source: Times Weekly
Authors: Yu Chen, Intern Cao Yu

Zangge Mining (000408.SZ) has received its first annual report since Zijin Mining (601899.SH) officially took control.

On the evening of March 13, Zangge Mining disclosed its 2025 annual report. The report shows that last year, the company achieved operating revenue of 3.577 billion yuan, a year-on-year increase of 10.03%; net profit attributable to shareholders of 3.852 billion yuan, up 49.32%; and net profit after deducting non-recurring gains and losses of 4.031 billion yuan, up 58.28%.

Quarterly, in Q4 2025, the company achieved operating revenue of 1.175 billion yuan, a 26.76% increase; and net profit attributable to shareholders of 1.102 billion yuan, up 54.7%.

Overall, Zangge Mining’s net profit attributable to shareholders in 2025 grew significantly faster than revenue, with investment income becoming an important source of profit during the period. During the reporting period, the company’s equity investment in Tibet Julong Copper Co., Ltd. (hereinafter “Julong Copper”) contributed investment income of 2.782 billion yuan, accounting for approximately 72.23% of the company’s net profit attributable to shareholders.

In its previous performance forecast, Zangge Mining attributed its growth to three factors: first, potassium chloride business exceeding expectations in production and sales; second, lithium carbonate prices rebounded in Q4, partially offsetting losses from production halts; third, its stake in Julong Copper benefited from rising copper prices and capacity releases, bringing substantial investment income.

Potash business steady, lithium carbonate under pressure

Founded in 2002, Zangge Mining went public via a backdoor listing in 2016. The company started with potash fertilizer and entered the lithium battery materials sector in 2017, gradually forming a “dual-drive” industry layout of potassium and lithium. Currently, its main businesses are R&D, production, and sales of potassium chloride and lithium carbonate, with products widely used in agriculture, new energy vehicles, energy storage, and consumer electronics.

Relying on the 724.35-square-kilometer salt lake mining rights in Chahanshan, Qinghai, Zangge Mining produces potassium chloride through solid-to-liquid conversion technology, and produces battery-grade lithium carbonate from salt lake lithium extraction on the basis of potassium salt production. As of the end of the report period, the company’s designed capacity for potassium chloride is 1.2 million tons per year, with an utilization rate of 86.10%; for battery-grade lithium carbonate, the designed capacity is 10,000 tons per year, with an utilization rate of 88.08%, and under-construction capacity of 50,000 tons per year.

In terms of revenue structure, potassium chloride remains the main source, accounting for over 80%. The annual report shows that in 2025, sales revenue from potassium chloride was 2.949 billion yuan, up 33.42%. Driven by improved market supply and demand, the average selling price of potassium chloride for the year was 2,964.28 yuan/ton, up 28.57%.

In contrast, the lithium carbonate business faced overall pressure. In 2025, revenue from lithium carbonate was 593 million yuan, accounting for 16.57% of total revenue, down 41.98% year-on-year; gross profit margin was only 34.82%, down 10.62 percentage points.

This change is related to lithium carbonate production halts and industry cycle fluctuations over the past year. On July 16, 2025, the Haixi State Natural Resources Department required Zangge Potash to suspend lithium extraction from tail brine and conduct compliance self-inspection. After completing the procedures, the company resumed production on October 11, 2025.

However, lithium prices rebounded in Q4 2025, partially offsetting the negative impact of the halt.

On March 13, TrendForce analyst Zeng Youpeng told Times Weekly that since the second half of 2025, with global energy storage demand exceeding expectations, upstream lithium battery material supply and demand have gradually shifted toward a tight balance, pushing lithium carbonate prices to bottom out and rebound.

“Lithium carbonate demand growth is expected to be around 30% in 2026,” Zeng said. Despite new capacity coming online in 2026, most of the supply increase is expected in the second half, and supply-side uncertainties will likely persist, continuing to drive lithium carbonate prices higher during peak demand seasons.

Li Pan, an analyst at Shanghai Steel Union New Energy Business Unit, also noted that lithium carbonate prices are currently in a “V-shaped reversal” rebound phase. The market logic has shifted from “oversupply” to “tight supply and demand balance,” with the price center significantly higher than the 2025 lows. It is expected that the lithium carbonate price center in 2026 will remain around 150,000 yuan/ton.

The annual report also shows that Zangge Mining’s Tibet Mami Cuo Salt Lake project entered substantive construction in 2025. The project is expected to be fully operational by the third quarter of 2026, with annual lithium carbonate production reaching 20,000 to 25,000 tons. Amid lithium price fluctuations, Li Pan stated that the salt lake project, with its extremely low cost curve, demonstrates greater resilience in industry reshuffling and will become a “rigid supply” in the market.

Zeng Youpeng said that the core competitiveness of upstream lithium resource companies mainly lies in resource reserves and quality, mining and lithium extraction costs, industry chain coordination and integration, as well as supply chain security and financing capabilities.

“Zijin Group’s Entry, Top Copper Resources Included”

Industry experts generally believe that Zijin Group’s entry will further enhance Zangge Mining’s core competitiveness.

In the 2025 annual report to shareholders, Wu Jianhui, Chairman of Zangge Mining, stated that the company officially joined Zijin Mining Group, marking a historic change in governance structure.

On January 16, 2025, Zijin Mining, through its wholly owned subsidiary Zijin International Holdings Limited (hereinafter “Zijin International”), acquired a 24.82% stake in Zangge Mining at 35 yuan per share, totaling 13.729 billion yuan.

On April 30, 2025, Zangge Mining completed a change of control, with Zijin International becoming the controlling shareholder and the actual controller changing to Shanghang County Finance Bureau. Zijin International and its concerted parties hold a total of 26.18% of the company’s shares, with Zijin Mining holding 25.99%.

According to a research report from Orient Securities, through its controlling shareholder Zijin International, Zangge Mining strategically entered the global top copper resource map, with core advantages relying on the “Julong Copper Mine,” a world-class project with clear expansion pathways and large-scale rights.

In 2025, Julong Copper achieved revenue of 16.663 billion yuan and net profit of 9.141 billion yuan. Zangge Mining holds a 30.78% stake in Julong Copper, and during the reporting period, the company recognized investment income of 2.782 billion yuan from Julong Copper, accounting for about 70% of its net profit attributable to shareholders.

On January 5, 2026, Zangge Mining announced on an investment platform that the main construction and core equipment installation of Julong Copper’s Phase II expansion project had been completed and successfully trial-run. Once fully operational, it will add a daily processing capacity of 200,000 tons of ore. “At that time, the combined capacity of Phases I and II will reach 350,000 tons per day, roughly equivalent to creating 1.3 ‘Julong’ mines. This world-class super-large copper mine, the largest in China and the highest in altitude globally with the lowest grade, will initially form a scale. The Phase II project will then enter final debugging and official production,” the company said.

In the secondary market, Zangge Mining’s stock performed strongly in 2025. Over the year, the stock price rose from a low of 27.10 yuan per share to a high of 87.68 yuan per share, a maximum increase of 223.54%. As of the close on March 13, the company’s market capitalization was approximately 125.2 billion yuan.