Net profit increased by 62%, reaching a historic high. How substantial are Zijin Mining's "Mining Guru" and "Cash Cow" dual labels?

Ask AI · Where is the earnings resilience of “mining bellwether” stocks under a gold price pullback reflected?

Zijin Mining’s performance briefing meeting. Source: corporate performance briefings

Our reporter Zhang Bei Huang Zhinan Shenzhen report

When a price inflection point arrives, past record highs do not necessarily mean the next stretch is safe.

On March 23, Zijin Mining (601899.SH, 02899.HK) completed its 2025 annual performance briefing through a coordinated format across Xiamen and Hong Kong. Its chairman was absent for reasons, and the deputy chairman and president Lin Hongfu, along with management, delivered what is the best set of results since the company’s listing.

In 2025, this global mining giant—dubbed the “mining bellwether” by the capital markets—achieved operating revenue of CNY 349.1 billion, up 15% year over year; attributable net profit to shareholders of CNY 51.8 billion, up 62% year over year; and net operating cash flow of CNY 75.4 billion, up 54% year over year.

Backed by the favorable tailwind of rising volumes and prices for gold and copper, Zijin Mining completed, three years ahead of schedule, its phased strategic targets originally set for 2028. In 2025, its A/H share prices rose by 128% and 152%, respectively, and its market capitalization jumped significantly.

But at a time when gold prices have already started to pull back, the dual challenges from both a reversal in the cycle and cost pressures will be the key to whether Zijin Mining can earn and maintain market trust. The iron law of the cycle has never made an exception for any historical record high.

Top of the performance rankings

This annual report is the brightest answer sheet Zijin Mining has produced since its founding.

The 2025 financial report shows that Zijin Mining achieved earnings before interest, taxes, depreciation and amortization (EBITDA) of CNY 101.4 billion, total profit of CNY 80.8 billion, and net profit of CNY 8B, up 62% year over year from CNY 63.82B in 2024; after excluding non-recurring items, attributable net profit was CNY 50.7 billion as well, maintaining a high growth rate of over 60%.

A foreign-invested institutional analyst with senior experience in the mining industry told a reporter from the Huaxia Times: “The reason the market calls Zijin Mining a ‘cash cow’ is supported by its cash flow generation capability, which has been well above the industry average over the past year. This is fully corroborated by the annual report data.”

In 2025, Zijin Mining’s net cash flow generated from operating activities was CNY 39.39B, up 54.38% year over year from CNY 75.43B in 2024. The net increase in cash and cash equivalents was CNY 48.86B, up 164% compared with CNY 31.57B in 2024. The growth rate of cash flow clearly outpaced the industry average.

By the end of 2025, its balance of monetary funds stood at CNY 11.96B, doubling from CNY 65.58B at the end of 2024. After excluding restricted funds, the size of cash and cash equivalents available for payment at any time reached CNY 31.69B. Abundant liquidity not only strengthens the company’s operating foundation, but also becomes the core confidence behind its “cash cow” label—providing ammunition for the acquisition of the Cangge Mining Company and overseas gold mines.

According to this reporter’s observation, during the period, Zijin Mining’s balance-sheet structure aligned with its performance trend and showed a restoration pattern. By the end of 2025, total assets were CNY 512.01B, up 29.1% year over year from CNY 4.11B at the end of 2024. However, the asset-liability ratio fell from 55.19% in 2024 to 51.56%, down 3.63 percentage points year over year. This happened while the company expanded rapidly in scale, and its leverage ratio steadily moved downward.

In the view of the aforementioned analyst, Zijin Mining’s current asset scale increases as monetary funds and trading financial assets grow; the growth rate of current liabilities is far lower than that of current assets. The current ratio improved markedly compared with the previous year, and short-term solvency improved.

On the earnings structure, its two core businesses—gold and copper—form an absolute pillar of profits. In 2025, its gold business contributed gross profit of over 40%, and its copper business contributed gross profit of 34.5%. Fifty-eight percent of net profit by scale came from overseas operations.

On the production side, in 2025 Zijin Mining produced 90 tonnes of gold-bearing minerals, up 23% year over year. Over the past five years, the compound growth rate of output was 17%, higher than the global average growth rate for the gold mining industry. Copper production of 1.09 million tonnes made it the only mining company in Asia to exceed one million tonnes of mined copper for three consecutive years. Even if impacted by the production reduction at its equity-invested Kamoto Copper Mine, it still delivered positive growth.

And within the details of inventory movements, the company’s handling of the pacing of the current cycle is reflected. In 2025, the amount of inventory increase that consumed cash flow was CNY 5.3B, narrowing notably from CNY 427M in 2024.

The core background for this change is that in 2025 Zijin Mining took a relatively optimistic assessment of the gold and copper price trends. On the products side, it basically did not carry out hedging. Against the backdrop of gold and copper prices running at high levels throughout the year, it optimized production and sales timing, accelerated inventory turnover, reduced capital occupation, and significantly improved the match between production and sales.

From the perspective of impairment data, in 2025 its total allowance for asset impairment and credit impairment losses was CNY 0.427 billion, down 43.24% from CNY 753M in 2024. With prices at high levels, inventory write-down risk dropped significantly.

But behind the impressive performance, there are still no lack of concerns. The most direct pressure comes from the upward trend in costs.

At the performance briefing, Wu Honghui, executive director, vice president, and chief financial officer of Zijin Mining, candidly stated that unit costs for gold and copper products rose in 2025, mainly due to four factors. Among them, the average grade of the main mines selected generally declined; only four mines saw an increase in grade. Of these, the grade decline in the Serbian Zijin Mining project had the most significant impact on overall costs for gold and copper mines. “First, with mining depth continuing to be pushed forward, the stripping ratio for open-pit mining increases, raising transportation and mining costs. Second, increases in production from the main mines whose unit costs are higher than the prior-year average also lifted overall unit costs. Finally, transition-period costs for newly acquired mines were relatively high, and incremental costs from rising employee compensation, benefits, and welfare.” Wu Honghui analyzed.

Although its mined copper C1 costs and gold sustaining costs remain at low levels across the global industry, the upward trend in costs can no longer be ignored.

Greater uncertainty also comes from the potential impact of a gold price pullback on performance. The high-level run of gold prices in 2025 is one of the core drivers behind Zijin Mining’s sharp growth in performance.

At the performance briefing, Lin Hongfu, deputy chairman and president of Zijin Mining, said that in the medium and long term, it is optimistic about the gold price outlook. Global governance breaches, excessive issuance of credit money, and growing demand from new industrial revolutions all support the core logic that will sustain gold’s long-term high prices—possibly even further increases.

What cannot be ignored, however, is that gold prices have already shown a phase of pullback. If gold prices continue to decline in the future, it will directly compress the gross profit space of its gold business and create a shock to overall profitability.

At the same time, the risks brought by a globalized layout also cannot be taken lightly.

The pressure from the gold price pullback has been evident since the beginning of 2026. As of March 23, international gold prices have seen multiple significant plunge moves. Both the largest drop in a single move and the price spread have shown clear volatility.

Recent international gold price trends. Source: Jin Tou Net

Specifically, on January 30, spot gold XAU fell by $484.62 per ounce in a single day, a decline of 9.01%. It dropped from that day’s high of $5450.32 per ounce to a low of $4695.32 per ounce.

Over the past four trading days, spot gold XAU has fallen from $5005 per ounce to a low of $4097 per ounce. The cumulative decline reached $908, and the magnitude of the short-term pullback is significantly greater than market expectations.

In addition, the 2025 financial report also shows that overseas businesses contributed nearly 60% of Zijin Mining’s net profits. While the globalized layout brings performance increments, it also faces multiple risks, including intensifying geopolitical games, a warming of resource nationalism, fragmentation of mining rules, and foreign-exchange fluctuations.

At the performance briefing, Wu Xiaomin, Zijin Mining’s chief independent director, stated plainly that the company’s internationalization process faces three major core challenges from the external environment, industry competition, and internal operations management. The complexity of globalized operations and the coordination challenges of cross-cultural management are issues the company will need to continuously address going forward.

The way of offense and defense

As a leading company in a super/strong-cycle industry, fluctuations in non-ferrous metals prices have always been the most core variable in Zijin Mining’s operations.

The high-level run of gold and copper prices in 2025 brought it an explosive growth in performance. How to hold the base of profitability, and balance risks and returns amid cycle fluctuations, has also become the key question that management addressed in the performance briefing.

In terms of price assessment and hedging strategies, Zijin Mining established a clearly tiered decision-making and control system. At the performance briefing, Wu Honghui introduced in detail that the company set up a Financial Committee with the chairman at its core, with specialized working groups underneath it, including a commodity hedging decision-making team and a monetary and financial guidance team, among others, responsible for day-to-day supervision and management as well as contingency decisions under market volatility.

He further pointed out that, according to the board’s explicit authorization, the company’s total hedging volume for mineral products does not exceed 5% of its annual production; its copper exposure on the smelting side does not exceed 25%, and its gold and silver exposure does not exceed 50%. “Not speculating is a bottom line the company cannot cross.”

It is precisely based on accurate assessments of price trends that Zijin Mining fully benefited from the cycle-upside in 2025.

Wu Honghui also said that the company has integrated information resources from industry-side entities, trading-side entities, smelting-side teams, and research teams both domestically and abroad, continuously improving its ability to develop commodity price research. “In recent years, management’s assessments of price trends have generally been correct. The company basically did not conduct hedging on mineral products; the smelting-side exposures were released reasonably, allowing it to fully capture market dividends from rising commodity and precious metal prices.”

And this strategy is directly reflected in the financial report data. In 2025, Zijin Mining’s fair value change gains were CNY 2945.76T, and investment gains reached CNY 8B, becoming an important supplement to profits in addition to net profit.

For inventory management and responses to price volatility, the company formed a full-chain control system from the production side to the sales side. On the production side, it uses the engineering management approach of “five rings merging into one flow for ore,” coordinating end-to-end management across land, mining, processing, smelting, and environmental protection. By promoting unmanned and intelligent mining, it improves transportation efficiency and equipment operating rates, and reduces unit energy consumption and production costs. Relying on technological innovation, it fully releases production capacity and improves ore dressing recovery rates. Scaling up production drives down unit costs, building a safety cushion against price volatility from the cost side.

At the performance briefing, Wu Honghui explicitly said that the company has confidence in keeping future cost increases within the single digits, or even lower. On the sales side and in inventory management, the company dynamically adjusts production and sales timing in combination with the price trend. During periods when gold and copper prices are high, it accelerates inventory turnover. In 2025, the increase in inventories narrowed markedly compared with the prior year. This not only reduces capital occupation, but also lowers inventory write-down risk that may result from a gold price pullback.

Meanwhile, Zijin Mining strictly controls inventory impairment testing. With prices at high levels, in 2025 its asset impairment losses dropped significantly compared with the previous year, and the quality of inventory assets remained stable.

Regarding exchange-rate risk that comes along with fluctuations in bulk commodities, it adheres to a neutral foreign exchange management principle. Wu Honghui explained that the core of foreign exchange management is to focus on controlling exchange-rate risk arising from mismatches between the functional accounting currencies and the currencies of assets and liabilities of legal entities, and to weigh the linkage relationship between interest rates and exchange rates.

“When exchange losses exceed the interest income generated by low-interest currencies, we will adjust the asset-liability currency structure through hedging instruments, or by using an integrated onshore and offshore multi-currency cash pool, to maximize interest-exchange rate returns.” The financial report data show that in 2025, foreign exchange gains/losses included in its finance costs were CNY 2.94B, up from -CNY 0.056 billion in 2024, turning positive. Against the backdrop of major currency exchange rates fluctuating significantly worldwide, it effectively controlled the erosion of exchange-rate risk on profits.

At the performance briefing, Lin Hongfu emphasized that with non-ferrous metals prices at relatively high historical levels, the company will attach great importance to endogenous growth and tap the potential of endogenous growth. It will place major emphasis on technical transformation, expansion, and upgrades for projects under production.

This reporter learned that according to Zijin Mining’s plan, in 2026 the company expects to reach 105 tonnes of mined gold and 1.20 million tonnes of mined copper, and 120k tonnes of lithium carbonate. By 2028, mined gold will reach 130—140 tonnes, mined copper will rise to 1.50—1.60 million tonnes, and lithium carbonate will reach 270k—320k tonnes. Through continuous release of capacity, it is expected to further dilute unit costs and improve its ability to withstand risks amid cycle fluctuations.

Judging from the 2025 financial report, Zijin Mining has delivered its “mining bellwether” growth and “cash cow” profitability by seizing the cycle, leveraging globalized resource allocation, and controlling costs at low industry levels—achieving the best performance in history.

But the essence of a strong-cycle industry determines that there is no permanent high-level market. The pressure from gold price pullbacks, the upward cost trend caused by declining grades in the main mines, and the geopolitical risks from overseas expansion are all challenges this mining giant must face in the future.

In the narrative of a supercycle for non-ferrous metals, Zijin Mining’s story is only halfway through as it enters the second half.

Editor: Zhang Bei Editor-in-Chief: Zhang Yuning