Zangge Mining's Investment Income Supports Performance, Can Zijin Gene Injection Continue the Growth Story

Thanks to the outstanding performance of its potassium, lithium, and copper business segments, Zangge Mining (000408.SZ) is expected to have a net profit exceeding its operating revenue in 2025. Recently, Zangge Mining released its 2025 annual report, showing the company achieved an annual revenue of 3.577 billion yuan and a net profit attributable to shareholders of 3.852 billion yuan. The company plans to pay a cash dividend of 15 yuan per 10 shares, totaling 2.353 billion yuan in dividends.

The rare phenomenon of “profit surpassing revenue” at Zangge Mining is due to the huge investment income of 2.782 billion yuan contributed by its associate company, Tibet Julong Copper Co., Ltd. (“Julong Copper”), allowing the company to achieve a historic leap in performance despite fluctuations in resource prices. Meanwhile, the volume and price of potassium fertilizer increased, positively boosting performance. Driven by these expectations, funds flooded into Zangge Mining, and its stock price rose 210% in 2025, with its market capitalization surpassing 100 billion yuan for the first time.

After reaching this historic milestone, Zangge Mining will face significant challenges in 2026. On one hand, with limited further increases in copper prices, whether Julong Copper can continue to provide stable high returns remains uncertain. On the other hand, the lithium carbonate business, which underperformed last year, whether can stabilize production this year is also a concern.

What further attracts market attention is that Zijin Mining became the controlling shareholder of Zangge Mining in 2025. Whether Zijin’s mining management experience and capital operation skills can elevate Zangge Mining’s performance and valuation to new heights remains to be seen.

The three pillars of potassium, lithium, and copper drive performance, with investment income contributing over 70% of profits

According to the financial report, in 2025, Zangge Mining achieved an operating revenue of 3.577 billion yuan, a year-on-year increase of 10.03%; net profit attributable to shareholders was 3.852 billion yuan, up 49.32%; and net profit after deducting non-recurring gains and losses was 4.031 billion yuan, up 58.28%.

Zangge Mining’s business covers three major segments: potassium chloride, lithium carbonate, and copper. The company develops its copper business through investments in Julong Copper. Among these segments, the traditional mainstay potassium chloride business performed steadily, continuing to serve as the “ballast stone” of performance, with annual sales revenue of 2.949 billion yuan, up 33.42%, and a gross profit margin of 64.64%, an increase of 19.81 percentage points year-on-year.

Despite challenges from resource grade fluctuations, the company managed to reduce sales costs of potassium chloride by 17.60% year-on-year to 961.62 yuan/ton through refined management. The annual production and sales volumes exceeded expectations, reaching 1.0332 million tons and 1.0843 million tons respectively. The potassium chloride revenue accounted for 82.45% of total revenue, up from 67.99% in 2024, further consolidating its core position.

In 2025, Zangge Mining’s lithium carbonate business experienced ups and downs. A 87-day temporary suspension led to a decline in annual output, falling short of the planned 11,000 tons. During the period, Zangge Lithium produced 8,808 tons of lithium carbonate and sold 8,957 tons, with sales revenue of 593 million yuan, down 41.98% year-on-year.

The “secret weapon” behind Zangge Mining’s profit surpassing revenue in 2025 is its investment in its associate, Tibet Julong Copper—China’s largest super-large copper mine. During the period, the company held a 30.78% stake in Julong Copper, earning an investment income of 2.782 billion yuan, accounting for 72.23% of net profit attributable to shareholders, an increase of 855 million yuan or 44.34% year-on-year. In 2025, Julong Copper’s copper ore production was 193,800 tons, with sales of 193,700 tons, generating revenue of 16.663 billion yuan and net profit of 9.141 billion yuan.

In recent years, global copper mining has been in a “defensive capital expenditure” phase. On the supply side, major overseas mines experienced frequent production halts in 2025. On the demand side, the increase in new energy penetration, AI infrastructure construction, and power grid upgrades in Europe and the US have become core growth drivers, jointly pushing copper prices higher last year.

Notably, on January 23, 2026, Julong Copper’s Phase II project was officially completed and put into operation, increasing total production capacity to 350,000 tons per day. Once fully operational, annual copper production will rise to 300,000–350,000 tons. The Phase III project is also underway; if approved by relevant government authorities, the copper reserves available for development within the project boundary will exceed 20 million tons, with an annual mining capacity of about 200 million tons. At that point, Julong Copper will become the world’s largest copper mining and processing operation, with an annual copper output of 600,000 tons after reaching full capacity.

Zijin’s empowerment in its first year: growth and challenges under a high base

In 2025, Zangge Mining reached a milestone—Zijin Mining, through its subsidiary Zijin International Holdings Limited, officially became the controlling shareholder, with the actual controller being the Shanghang County Finance Bureau. For Zijin Mining, acquiring Zangge Mining is a key step in expanding its strategic mineral resource portfolio, forming natural synergy with its existing copper and lithium assets.

In its shareholder letter, Zangge Mining’s new Chairman Wu Jianhui stated that Zijin’s “deep global resource development experience and excellent operational management system are fully empowering the ‘New Zangge’.” From a governance perspective, the company completed a board reshuffle and integrated the supervisory functions into the Monitoring and Audit Committee.

However, 2026, as Zijin’s first full year of involvement, presents a “high base” challenge. Over 70% of the 3.852 billion yuan net profit attributable to shareholders in 2025 came from investment income of Julong Copper, and whether this high level can be maintained remains uncertain.

According to the 2026 operational plan disclosed in the annual report, Julong Copper expects to increase copper concentrate production to 300,000–310,000 tons, with equity production of about 92,300–95,400 tons—an expected leap from about 60,000 tons in 2025. However, fluctuations in copper prices and changes in production costs will directly impact the actual contribution of investment income.

This means that for Zangge Mining to achieve further performance breakthroughs in 2026 on a high base, it will need substantial growth in its main businesses of potassium and lithium. The company plans to produce 1 million tons of potassium chloride, 1.5 million tons of industrial salt, and 16,400 tons of battery-grade lithium carbonate—nearly doubling the 2025 figures.

Lithium carbonate production ramp-up is seen as the core of future growth. The Tibet Mami Cuo Salt Lake project, which carries the lithium segment’s growth, obtained its mining license in July 2025. The first phase’s annual production of 50,000 tons of battery-grade lithium carbonate aims to start production in the second half of 2026, with an expected contribution of about 5,400 tons of equity production. Zangge Lithium is expected to produce 11,000 tons. Meanwhile, the Laos million-ton potassium salt project has been approved, with total potassium chloride resources exceeding 984 million tons. The first phase, with an annual capacity of 1 million tons, is progressing rapidly.

Facing the high base of 2025, 2026 will be a critical year to test the operational quality of the “New Zangge.” Whether potassium chloride and lithium carbonate capacities can be released as scheduled, whether cost control can continue to improve, and whether the incremental output from Julong Copper can offset potential copper price cycles will determine if the company’s market value can remain above 100 billion yuan.

Duty editor: Grace