Costing 18.2 Billion! Trillion-Dollar Zijin Mining "Swallows" Chifeng Gold

Why is Zijin Mining accelerating mergers and acquisitions even at high gold prices?

Zijin Mining is taking a multi-faceted approach.

On the morning of March 23, Zijin Mining announced that its wholly owned subsidiary Zijin Gold, together with Chifeng Gold’s controlling shareholder Li Jinyang and his concerted parties Zhejiang Hanfeng, signed a “Share Transfer Agreement” to acquire a total of 242 million shares of Chifeng Gold A-shares at 41.36 yuan per share, totaling 10.006 billion yuan; additionally, Zijin Gold also signed a “Strategic Investment Agreement” with Chifeng Gold to subscribe to 311 million H-shares at 30.19 Hong Kong dollars per share through a private placement, amounting to 9.386 billion Hong Kong dollars. The two transactions combined total 18.258 billion yuan.

According to the agreement, after the completion of this transaction, Zijin’s wholly owned subsidiary will hold a total of 572 million shares of Chifeng Gold, accounting for approximately 25.85% of its total shares after the issuance. Zijin will gain control of Chifeng Gold and consolidate its financials. After the transaction, Li Jinyang and Zhejiang Hanfeng will no longer hold any shares of Chifeng Gold.

Following this deal, the controlling shareholder of Chifeng Gold will change from Li Jinyang to Zijin Gold, and the company’s actual controller will become Shanghang County Finance Bureau.

It is reported that this is Zijin Mining’s third major acquisition since last year.

Data shows that in 2025, Zijin Mining acquired control of Zangge Mining with a premium of 13.7 billion yuan; in January this year, it announced a roughly 28 billion yuan acquisition of Canadian mining company United Gold; and now, it has obtained controlling interest in Chifeng Gold for 18.258 billion yuan.

Frequent mergers and acquisitions and large-scale expansion are driven not only by the soaring gold prices but also by the company’s continuous achievement of performance targets.

According to its latest financial report, Zijin Mining achieved revenue of approximately 349.079 billion yuan in 2025, a year-on-year increase of 14.96%; net profit was about 51.777 billion yuan, up 61.55%; and net profit excluding non-recurring gains and losses was 50.724 billion yuan, up 60.05%.

As of the end of December 2025, Zijin Mining’s cash and cash equivalents totaled 61.216 billion yuan.

The significant growth in performance has enabled Zijin Mining to be more generous in shareholder returns. According to its dividend plan, the company intends to distribute a cash dividend of 3.8 yuan per 10 shares, totaling about 10.104 billion yuan.

Meanwhile, Zijin Mining also announced that it plans to use its own funds to repurchase A-shares through centralized bidding, with a repurchase amount of no less than 1.5 billion yuan and no more than 2.5 billion yuan, at a price not exceeding 41.5 yuan per share.

In the capital markets, Zijin Mining’s A-shares have risen for seven consecutive years, with a growth of over 135% in 2025, reaching a peak market value close to 1.2 trillion yuan.

Financial reports show that Zijin Mining ranks first nationwide in both gold and copper mineral production.

So, why does Zijin Mining continue to pursue high-level mergers and acquisitions amid high gold prices?

Zou Laichang, the newly appointed chairman of Zijin Mining, provided an answer in the annual report. He stated that the global situation is complex and turbulent, with supply chains and industrial chains facing multiple risks and challenges. The fundamental importance of mining has been re-recognized, and the disorder in the global governance system has driven gold prices sharply higher. The imbalance between supply and demand is expected to support copper prices at high levels, while energy transition is fueling demand expansion for key metals like lithium.

Zou Laichang further emphasized that Zijin Mining adheres to the principle of “resources are king.” Through precise mergers and acquisitions combined with autonomous exploration and prospecting, the company has formed a rich portfolio of world-class mineral resources. Currently, the company’s total resources include over 4,600 tons of gold, approximately 110 million tons of copper, over 12 million tons of zinc (lead), and over 18 million tons of equivalent lithium carbonate, laying a solid foundation for sustainable development.

It is evident that Zijin Mining is transitioning from a gold-focused enterprise to a comprehensive, world-class mining company.

UBS released a research report listing Zijin Mining as its top pick in the industry. UBS stated that, based on Zijin’s profitability and sales capabilities, the company’s valuation is reasonable. Although short-term copper prices may be affected by macro uncertainties, including tensions in the Middle East and oil price fluctuations, they believe this will not change the long-term fundamentals of the copper market; recent weak stock prices may present more attractive buying opportunities.

UBS also noted that even with cost pressures, Zijin Mining’s net profit in 2025 is expected to reach 51.8 billion yuan, a 62% increase, close to the upper range of earlier profit forecasts. The company plans to pay a semi-annual dividend of 0.38 yuan per share, with an annual payout ratio of 31%. It also announced an A-share buyback plan involving 1.5 to 2.5 billion yuan. Therefore, UBS reaffirmed a “Buy” rating for Zijin Mining with a target price of HKD 63.5.

Goldman Sachs released a research report stating that, based on the latest forecasts from its global commodities team and the company’s 2025 performance, Zijin Mining’s recurring net profit is expected to grow by 55% to 78.9 billion yuan in 2026, driven by rising gold and copper prices and increased production.

Meanwhile, Goldman Sachs raised its gross profit forecasts for mineral gold and copper for this year and next by 2% to 3%, reflecting lower sales costs in the 2025 performance; it also increased its gross profit forecasts for mineral copper for this year and next by 0% to 15%. Based on this, Goldman Sachs maintains a “Buy” rating on Zijin Mining.

Author’s note: These are personal opinions and for reference only.