Zangge Mining Achieves 41% Q1 Growth, Potash and Copper Drive Counter-Cyclical Breakthrough

Source: Jiemian News | Author: You Lianyun

Zangge Mining, April 18, 2025, Qinghai

This article does not constitute any investment advice. Information disclosure is based on company announcements. Investors act at their own risk.

On April 18, Zangge Mining released its latest financial report. The data shows that in the first quarter of 2025, the company achieved a net profit attributable to shareholders of CNY 747 million, a year-on-year increase of 41.18%; operating cash inflow reached CNY 104 million, up 143.80% year-on-year. Although revenue continued to decline due to the downtrend in potash and lithium markets, the decline narrowed significantly. This indicates not only a strong start for Zangge Mining in 2025 but also reflects the company’s operational resilience and the advantage of its diversified potash, lithium, and copper resource portfolio in navigating industry cycles.

Significant Growth Both Year-on-Year and Quarter-on-Quarter, Driven by Potash and Copper

The financial results of many lithium mining companies in recent years have been marked by price drops, cyclical declines, and even losses. This is understandable, as lithium prices fell sharply after reaching CNY 600,000/ton in 2022. In this context, many lithium enterprises experienced substantial declines in profitability.

Zangge Mining, however, reversed this trend and returned to a growth trajectory. The report shows that in Q1 2025, net profit attributable to shareholders reached CNY 747 million, a 41.18% year-on-year increase, and a 4.94% quarter-on-quarter rise compared to Q4 2024. This growth continues the momentum established in Q4 2024, demonstrating stable and sustained upward performance.

A closer look at the data reveals the strategic advantage of Zangge Mining’s diversified resource allocation across potash, lithium, and copper. The company attributed the strong Q1 performance primarily to contributions from its copper mining segment and increased sales of potassium chloride.

On one hand, the copper segment provided strong growth momentum. At the beginning of 2025, potential US tariffs on copper prompted a global supply “stockpiling” effect, driving LME copper prices above USD 10,000/ton. In this context, Julong Copper accelerated production, generating investment income of CNY 610 million in Q1, a 73.3% year-on-year surge and a record for a single quarter. On the other hand, the potash business stabilized earnings. As China’s second-largest potash producer, Zangge Mining benefited from reduced international supply and strong domestic spring planting demand. The rising price of potassium chloride boosted the company’s potash revenue. Overall, the strategic allocation of potash, lithium, and copper resources allows the company to capture structural opportunities in cyclical markets while securing a stable revenue base, forming a composite competitive advantage capable of weathering industry cycles.

Stable Production and Supply, Upholding Grain Security

At the beginning of this year, Zangge Mining announced that its controlling shareholder, Zangge Venture Capital, along with its concerted party, and the second-largest shareholder, Xinsha Hongyun Investment, planned to transfer 17.62% and 7.36% of the company’s shares respectively, totaling 24.98% of the shares. The counterparty of the transaction is Zijin International, a wholly-owned subsidiary of Zijin Mining. According to the latest supplemental agreement, upon completion of this transaction, Zijin International and its concerted parties will hold 26.18% of Zangge Mining’s shares, meaning Zijin Mining will gain control over Zangge Mining. As of now, the first installment of the share transfer payment has been completed, and the acquisition has received approvals from the Longyan Municipal State-owned Assets Supervision and Administration Commission as well as the Anti-Monopoly Review from the State Administration for Market Regulation.

It should be noted that Zangge Mining’s attractiveness to Zijin Mining is closely related to the overall quality of the listed company and Zijin’s strategic plan. As the second-largest potassium fertilizer producer in China and a company with leading lithium extraction technology from salt lakes, Zangge Mining possesses significant resource and cost advantages. For example, in recent years, even amid a sharp decline in lithium carbonate prices, Zangge Mining’s production costs ranged between 30,000–40,000 CNY per ton, maintaining strong profitability. The company also owns a number of high-quality potassium and lithium projects, including the Laos potash project and the Mami Cuo Salt Lake.

Market consensus suggests that with Zijin Mining taking control, Zangge Mining can effectively leverage Zijin’s strengths in exploration and reserve expansion to further enhance its own mineral resource development, accelerate the development of potassium, lithium, and other resources, and improve resource utilization efficiency. In addition, investors believe that this change in controlling shareholder will effectively mitigate the equity pledge risk of the previous controlling shareholder and further improve corporate governance.

Driven by the change in ultimate controller and the expectation of future strategic empowerment, capital has actively rallied around Zangge Mining. In the first quarter of 2025, Zangge Mining’s stock price hit a record high of 37.89 CNY per share, with a maximum increase of 32.25% during the period. Meanwhile, according to the company’s first-quarter report, long-term funds such as the Social Security Fund made significant purchases of 18,909,891 shares, representing 1.2% of the company’s total shares, ranking sixth among the top ten shareholders. This marks the Social Security Fund’s return to a heavy position in Zangge Mining since it exited in Q1 2023, reflecting not only recognition of the company’s operational resilience but also highlighting its long-term investment value.

Significant Capital Rally Amid Zijin Mining’s Strategic Empowerment

Editor: Yuan Chengying