Zijin Mining — A Global Leader in Resources

Zijin Mining is currently experiencing a dual resonance period driven by “geopolitical sentiment catalysts” and “strong internal performance growth.” In the short term, it is a leader in safe-haven assets and resource price increases; in the long term, it has the potential to become a global mining giant. However, investors should be cautious of the risk of a pullback if “sentiment wanes.”

1. External Catalysts: Unexpected Gains from US-Iran Conflict

The current Middle East situation (US-Iran conflict, Strait of Hormuz risks) directly benefits Zijin Mining’s two core businesses: gold and copper.

Gold: Maximize Safe-Haven Attributes

Logic: The outbreak of conflict causes global risk aversion to surge, leading funds to flow into gold markets. International gold prices have already surpassed the historic high of $5,200 per ounce.

Impact on Zijin: Zijin Mining is a leader in China’s A-share gold sector, with massive gold reserves. Every 1% increase in gold price is expected to boost the company’s net profit by 1.4%. Bank of America predicts the average gold price will reach $4,988 per ounce by 2026, directly translating into higher profits for the company.

Copper: Supply Premium and Inflation Hedge

Logic: Iran controls the Strait of Hormuz, causing about 20%-30% of global oil transportation to be disrupted, pushing up oil prices. Rising oil prices will increase global inflation expectations and raise costs for copper mining and transportation, thereby driving up copper prices (copper is the king of industrial metals and an inflation hedge).

Impact on Zijin: Zijin Mining is China’s largest copper producer. JPMorgan Chase forecasts copper prices could hit $12,500 per ton by 2026. Rising copper prices will significantly boost the company’s profits.

2. Internal Value: Solid Fundamentals and Growth Potential

Beyond short-term war sentiment, Zijin Mining’s “cards” are very strong, which is the fundamental reason it can withstand volatility and continue to rise.

Performance Explosive Growth:

According to the 2025 earnings forecast, the company’s net profit attributable to shareholders is expected to be between 51 billion and 52 billion yuan, a year-on-year increase of about 60%. Such high growth is rare among mining giants.

“Low Cost + High Output” Moat:

Cost Control: Zijin’s all-in sustaining costs (AISC) for gold are approximately $1,000–$1,377 per ounce, significantly lower than the global industry average of around $1,600 per ounce. This means it can still be profitable even if gold prices pull back in the future. Capacity Expansion: The company is in a period of capacity explosion. By 2026, it plans to produce 1.2–1.24 million tons of copper, 105 tons of gold, and increase lithium carbonate production to 120,000 tons.

Global Layout:

The company not only has copper and gold but is also actively developing lithium (a new energy metal). This “multi-metal” strategy allows it to fully benefit from the global energy transition and resource revaluation driven by inflation.

3. Institutional Attitudes and Target Prices

Currently, mainstream institutions (such as Bank of America, Goldman Sachs, Citi) are very optimistic about Zijin Mining.

Bank of America: Rated “Buy” with an astonishing target price of HKD 280 (current Hong Kong stock price around HKD 45, A-share about 39 yuan). This indicates that institutions believe the current stock price significantly undervalues its long-term potential.

Goldman Sachs: Positive on its performance amid easing cycles and geopolitical risks, expecting its ROE (Return on Equity) to reach 36%.

4. Risk Alerts (Think Calmly)

While the outlook is promising, you should be aware of the following risks:

Sentiment Reversal Risk: If the US-Iran conflict suddenly eases (e.g., a ceasefire agreement), safe-haven funds may quickly withdraw from gold and resource stocks, causing short-term sharp declines in stock prices.

Overseas Operational Risks: Many of Zijin’s mines are overseas (e.g., Congo, Serbia), which diversifies geopolitical risks but also exposes the company to uncertainties such as local policy changes and political instability.