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

With outstanding performance in the potassium, lithium, and copper sectors, Zangge Mining (000408.SZ) is expected to surpass its operating revenue with net profit in 2025. Recently, Zangge Mining released its 2025 annual report, showing total revenue of 3.577 billion yuan and 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 breakthrough in performance despite fluctuations in resource prices. Additionally, the volume and price of potassium fertilizer increased, positively impacting results. Driven by these expectations, funds flooded into Zangge Mining, causing its stock price to rise 210% in 2025 and its market capitalization to break through 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 achieve stable 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. The mining management experience and capital operation skills brought by Zijin may elevate Zangge Mining’s performance and valuation to new heights.

Potassium, Lithium, and Copper Drive Performance, Investment Income Contributes Over 70% of Profit

According to the financial report, in 2025, Zangge Mining achieved 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 after deducting non-recurring gains and losses, net profit was 4.031 billion yuan, up 58.28%.

Zangge Mining’s business covers three main sectors: potassium chloride, lithium carbonate, and copper. The company invests in Julong Copper to develop its copper business. Among these, the traditional mainstay potassium chloride business performed steadily, continuing to serve as the “ballast” for performance. It achieved sales revenue of 2.949 billion yuan, up 33.42%, with 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 refined operations to reduce potassium chloride sales costs by 17.60% to 961.62 yuan/ton. The annual production and sales volumes exceeded expectations, reaching 1.0332 million tons and 1.0843 million tons respectively. The revenue share of potassium chloride increased from 67.99% in 2024 to 82.45%, further consolidating its core position.

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

The “secret weapon” behind the profit surpassing revenue in 2025 is the investment income from 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 2.782 billion yuan in investment income, 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, achieving 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 penetration of new energy, AI infrastructure construction, and power grid upgrades in Europe and America have become key growth drivers, collectively 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 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 departments, the copper reserves available for development will exceed 20 million tons, with annual mining and processing of about 200 million tons of ore. At that point, Julong Copper will become the world’s largest copper mine in terms of scale, with annual copper output reaching 600,000 tons after full capacity.

Zijin’s First Year of Empowerment: Growth and Challenges in a High-Base Environment

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, acquiring Zangge Mining is a key step in expanding its strategic mineral resources portfolio, forming natural synergy with its existing copper and lithium assets.

In a letter to shareholders, 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 supervisory functions into the Monitoring and Audit Committee.

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

According to the 2026 operational plan, Julong Copper expects to increase copper concentrate production to 300,000–310,000 tons, with equity production of approximately 92,300–95,400 tons—significant growth compared to about 60,000 tons in 2025. However, fluctuations in copper prices and production costs will directly impact the actual contribution of investment income.

This means that to achieve further performance breakthroughs in 2026 from a high base, Zangge Mining will need substantial growth in its main sectors of potassium and lithium. The company plans to produce 1 million tons of potassium chloride and 1.5 million tons of industrial salt; for battery-grade lithium carbonate, a production target of 16,400 tons is set, nearly doubling 2025’s output.

The ramp-up of lithium carbonate production is seen as the core driver 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 in the second half of 2026, with an expected contribution of about 5,400 tons of equity production. Zangge Lithium is also expected to produce 11,000 tons. Meanwhile, the Laos million-ton potassium salt project has been approved, with total potassium chloride resources of 984 million tons, and the first phase’s 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 costs can be continuously optimized, and whether Julong Copper’s incremental production can offset potential copper price cycles will determine if the company’s market value can stabilize above 100 billion yuan.