Zangge Mining Achieves Over CNY 2.5 Billion Net Profit in 2024, Collaborates with Zijin to Boost Production Capacity

Source: 21st Century Business Herald

Zangge Mining, March 29, 2025, 17:55, Qinghai

The content of this article does not constitute any investment advice. Disclosure information is subject to company announcements. Investors operate at their own risk.

Potash and Lithium Businesses Show Strong Resilience; Copper Segment Achieves Record Investment Gains

Zangge Mining achieved a net profit attributable to shareholders exceeding CNY 2.58 billion in 2024, demonstrating robust operational resilience and continuously generating new momentum for high-quality development.

Earlier this year, Zijin Mining’s acquisition of Zangge Mining caused a significant stir in the market. This move is considered Zijin’s long-term strategic layout in key resources such as potash and lithium amid the new energy transformation era. Market attention is focused on how Zangge Mining will strategically coordinate with Zijin, expand its business moat, and achieve sustainable performance growth.

On March 28, Zangge Mining disclosed its latest annual performance report. In 2024, by maintaining stability amid change, the company achieved revenue of CNY 3.251 billion and net profit attributable to shareholders of CNY 2.58 billion. In Q4, revenue reached CNY 927 million, a quarter-on-quarter increase of 64.95%, and net profit attributable to shareholders reached CNY 712 million, up 24.69% quarter-on-quarter. Notably, the associated company, Julong Copper, contributed investment gains of CNY 1.928 billion, setting a new record. By the end of the reporting period, Zangge Mining’s total assets were CNY 15.083 billion, up 7.04% from the beginning of the year; net assets attributable to shareholders reached CNY 13.865 billion, up 6.18%; and the asset-liability ratio stood at 8.20%, reflecting a solid asset quality.

Stable and Improved Potash & Lithium Operations; Copper Investment Gains Hit New High

Potassium chloride, often referred to as the “grain of grains,” is crucial to national food security. In 2024, domestic potassium chloride market prices fluctuated with a “decline first, then stabilize, slight recovery at year-end” trend. Zangge Mining adhered to both stable production and supply and cost management, reducing energy consumption and improving efficiency, keeping average sales costs at a reasonable level and solidifying its role as the business’s performance “ballast.”

To respond to the national call for food security, Zangge Mining proactively increased its potassium chloride production plan. The company produced 1.073 million tons of potassium chloride during the year, achieving 102.19% of the target, and sold 1.0449 million tons, reaching 100.28% of the target. The potassium chloride segment generated revenue of CNY 2.21 billion with a gross margin of 44.83%.

In 2024, the Laos potash project overcame complex geological conditions and completed multiple key milestones. Zangge Mining obtained potash mining reserves certificates for 157.72 square kilometers in Vientiane’s Setthathirath and Bokeo districts, corresponding to approximately 984 million tons of potassium chloride resources. The project has submitted a feasibility study report to the Laotian Ministry of Energy and Mines and is simultaneously preparing an environmental impact assessment report. Regarding construction, the company completed the design and tender for the first-phase 2 million tons/year potassium chloride project and advanced preparatory water, power, and road works.

In 2024, battery-grade lithium carbonate prices first rose and then fell, with spot prices decreasing from CNY 96,900/ton at the beginning of the year to CNY 75,000/ton at year-end. Zangge Mining continued to innovate in lithium carbonate production processes, improving production capacity, automation, and product quality through system optimization, process upgrades, and equipment introduction, further consolidating the segment’s technological advantage. The company produced 11,566 tons of lithium carbonate and sold 13,582 tons, a 31.7% increase in sales compared to the previous year. Revenue reached CNY 1.022 billion, with a gross margin of 45.44%. In 2024, Zangge Lithium was designated as a delivery warehouse for lithium carbonate futures by the Guangzhou Futures Exchange, further enhancing its industry recognition and influence.

In 2024, Zangge Mining’s associated company Julong Copper produced 166,300 tons of copper concentrate, generating investment gains of approximately CNY 1.928 billion, accounting for 74.72% of net profit attributable to shareholders, an increase of CNY 631 million year-on-year, a growth rate of 48.72%. The second-phase expansion project of Julong Copper Mine is expected to commence production by the end of 2025. Once fully operational, the combined annual ore processing capacity of phases one and two will exceed 100 million tons, producing 300,000–350,000 tons of copper annually, more than doubling Zangge Mining’s attributable copper production capacity.

ESG Ratings Continue to Rise; “Dividends + Buybacks” Strategy Enhances Investor Returns

Rooted in the Qinghai-Tibet Plateau, Zangge Mining adheres to long-term development of salt lake resources, integrating social responsibility into corporate values and practices. The company supports rural revitalization and gives back to society through paired assistance, donations, and rural education initiatives, such as building the “Xinhua Village Happiness Mutual Aid Center” and implementing the “Zangge Mining Yixing Hongguang” project.

Zangge Mining has increased local employment rates at Laotian projects, improving local job opportunities, and contributing to the development of Belt and Road countries. By aligning corporate growth with social responsibility, the company received multiple honors in 2024, including the China Manufacturing Listed Companies Five-Star Social Responsibility Gold Award and the Golden Dawn Social Responsibility Award.

Adhering to the corporate mission of “sustainable development of salt lake resources and leading green development,” Zangge Mining has optimized ESG governance and deepened green development. In 2024, the company launched its first carbon inventory work, implemented green mine construction, raised the “three rates” of the mine to leading domestic levels, increased investment in clean technology, applied green production technology and circular economy principles, gradually replacing existing equipment with low-emission, low-energy facilities, and assessed potential environmental impacts of water usage, collaborating with universities to explore biodiversity protection. These efforts enhanced the long-term stability of the Qinghai-Tibet Plateau ecosystem. Through ESG governance optimization and standardized disclosure, its Hang Seng Index ESG rating has steadily increased, boosting reputation and brand influence.

Regarding investor returns, Zangge Mining has implemented a “dividends + share buybacks” strategy. Mid-year 2024, the company distributed interim dividends totaling CNY 408 million. From 2022 to 2024, cumulative cash dividends reached CNY 7.429 billion, ranking among the top listed companies in the industry. Additionally, in August 2024, Zangge Mining conducted a share buyback for cancellation purposes, further enhancing investor returns. By February this year, approximately CNY 300 million had been used to repurchase and cancel 10.21 million shares, reaching the target buyback limit.

Strategic Synergy with Zijin; Inorganic and Organic Growth Boost Production Capacity

In January 2025, Zijin Mining announced a CNY 13.7 billion acquisition of Zangge Mining, marking the first M&A deal of the year. Going forward, as Zangge Mining integrates into Zijin’s large platform, the company is expected to significantly enhance asset scale, resource reserves, management efficiency, global layout, and governance standards, accelerating progress toward becoming a world-class mining group.

Industry experts noted that as a leading global diversified mining company, Zijin excels at converting previously undevelopable resources into usable reserves, and cooperation across multiple sectors between the two companies is promising. Zijin Mining holds lithium resources in “two lakes and two mines,” with lithium carbonate as a new growth driver. Zangge Mining has deep experience in mining in Qinghai and Tibet and has industry-leading cost control in potash and lithium development, which can complement Zijin’s end-to-end proprietary technology and large-scale engineering R&D capabilities, promoting high-level development of potash and lithium projects in Tibet and other regions, and converting technical and resource advantages into economic benefits.

Zangge Mining has ample in-hand resources. In addition to 100% ownership of a 724.35 km² mining right east of Chaerhan Salt Lake railway in Qinghai, the company holds 70% equity in Laos Vientiane Bokeo and Setthathirath potash projects, 29.94% indirect stake in Mami Cuo Mining, which has proven lithium chloride resources of approximately 2.5011 million tons with grades significantly higher than Chaerhan Salt Lake. The project is adjacent to Zijin’s Laguecuo Salt Lake, with potential technical collaboration to further amplify economic benefits. Zangge’s indirect stake in Guoneng Mining rose to 21.09%, which holds 3.9 million tons of lithium carbonate and 28 million tons of potassium chloride across Tibet’s Longmu Cuo and Jieze Chaka Salt Lakes, with world-leading lithium carbonate reserves.

Currently, with profound changes in the international situation, intensifying geopolitical competition, and an explosive wave of technological and industrial transformation, the mining industry is undergoing unprecedented change and opportunity, making strategic resources like potash, lithium, and copper increasingly valuable. Regarding copper, Zijin Mining Chairman Chen Jinghe stated that in 2025, the copper market will experience a “macro big year, fundamentals small year” trend, with steady growth in China’s new energy sector and power infrastructure, rising demand in Southeast Asia, and supply chain reshaping in Europe and the U.S., ensuring long-term copper demand growth.

Globally, the lithium industry remains on an upward trajectory with an improved industry structure. Minsheng Securities pointed out that Australia’s new production clearance will have significant marginal effects on supply and demand, potentially stimulating upward price elasticity for lithium. In the long run, with autonomous driving, smart transportation, and intelligent living gaining widespread adoption, lithium carbonate is expected to become a fundamental raw material for the new energy era. For Zangge Mining, on the basis of stable cash flow from potash and copper, the lithium segment shows promising volume growth potential.

Looking ahead, Zangge Mining has a clear strategy. Leveraging the advantages of its state-controlled shareholder, the company plans to deeply develop existing mineral resources, optimize internal organization, build a flexible and efficient global operational management system, and expand global reserves of key resources like potash and lithium, forming a distinctive development model and competitive edge. Zangge Mining stated in its annual report that it will accelerate construction and production of the Mami Cuo and Laos potash projects, achieve exploration breakthroughs in potential mineral areas based on existing projects, replicate technology across other potash and lithium projects, and improve economic efficiency. On March 28, Zangge Mining also launched its second employee stock ownership plan, intending to unlock shares in phases over the next three years based on profit growth targets and resource development progress, supporting sustainable growth in resources and performance.

Focusing on key mineral resources, taking greater responsibility to secure food and energy security, refining technology, optimizing existing assets, strengthening incremental resources, and serving national strategy, Zangge Mining is further enhancing its global capabilities in the potash and lithium sector.

Editor: Yuan Chengying