A perfect score on the first test after the 'Zijin Mining group' takeover? Zangge Mining reports dual growth in revenue and profits last year, with 70% of profits supported by copper mine investment returns

Source: The Times Weekly, Authors: Yu Chen, Intern Cao Yu

Zangge Mining (000408.SZ) has released its first annual report since Zijin Mining (601899.SH) officially took over.

On the evening of March 13, Zangge Mining released its 2025 annual report. The report shows that the company achieved revenue of 3.577 billion yuan last year, a year-on-year increase of 10.03%; net profit attributable to shareholders was 3.852 billion yuan, a year-on-year increase of 49.32%; non-recurring net profit attributable to shareholders was 4.031 billion yuan, a year-on-year increase of 58.28%.

In terms of single quarters, in the fourth quarter of 2025, the company achieved revenue of 1.175 billion yuan, a year-on-year increase of 26.76%; net profit attributable to shareholders was 1.102 billion yuan, a year-on-year increase of 54.7%.

Overall, the growth rate of Zangge Mining's net profit attributable to shareholders in 2025 was significantly higher than the revenue growth rate, and investment income became an important source of the company’s profits for the period. During the reporting period, the company's stake in Tibet Julong Copper Co., Ltd. (hereinafter referred to as 'Julong Copper') contributed investment income of 2.782 billion yuan, accounting for approximately 72.23% of the company's net profit attributable to shareholders.

In the previously disclosed earnings forecast, Zangge Mining attributed the reasons for its performance growth to three aspects: First, both production and sales of the potassium chloride business exceeded expectations; second, prices for the lithium carbonate business rebounded in the fourth quarter, partially offsetting losses caused by production halts; third, the company's stake in Julong Copper benefited from rising copper prices and increased capacity, bringing significant investment returns to the company.

Steady growth in the potash fertilizer business, with pressure on the lithium carbonate business

Zangge Mining was established in 2002 and went public via a reverse takeover in 2016. The company started with the potash fertilizer business and officially entered the lithium battery materials field in 2017, gradually forming an industrial layout driven by both potassium and lithium. Currently, the company's main businesses are the research, production, and sales of potassium chloride and lithium carbonate, with products widely used in agriculture, new energy vehicles, energy storage, and consumer electronics.

Relying on the mining rights of the 724.35-square-kilometer Qarhan Salt Lake in Qinghai, Zangge Mining produces potassium chloride through solid-to-liquid technology and uses brine extraction technology on old potassium-extraction brine to produce battery-grade lithium carbonate. As of the end of the reporting period, the company's designed annual production capacity for potassium chloride was 1.2 million tons, with a capacity utilization rate of 86.10%; the designed annual production capacity for battery-grade lithium carbonate reached 10,000 tons, with a capacity utilization rate of 88.08%, and under construction capacity of 50,000 tons per year.

In terms of revenue structure, potassium chloride remains Zangge Mining's primary source of income, accounting for over 80%. According to the annual report, in 2025, the company's potassium chloride business generated revenue of 2.949 billion yuan, a year-on-year increase of 33.42%. Due to improved market supply and demand, the average annual selling price of potassium chloride was 2,964.28 yuan per ton, a year-on-year increase of 28.57%.

By comparison, the lithium carbonate business faced overall pressure. In 2025, the company's lithium carbonate business generated revenue of 593 million yuan, accounting for 16.57% of total revenue, a year-on-year decrease of 41.98%; the gross margin was only 34.82%, down 10.62 percentage points year-on-year.

This change is related to the lithium carbonate production suspension incident experienced by Zangge Mining over the past year and industry cycle fluctuations. On July 16, 2025, the natural resources department of Haixi Prefecture requested Zangge Potash Fertilizer to suspend its tail brine lithium extraction operations and conduct compliance self-inspections. The company resumed production officially on October 11, 2025, after completing the required procedures.

However, the recovery of lithium carbonate prices in the fourth quarter of 2025 partially offset the negative impact of the production halt.

On March 13, Zeng Youpeng, an analyst at TrendForce, told reporters from the Times Weekly that since the second half of 2025, with global energy storage demand exceeding expectations, the supply-demand relationship for upstream lithium battery materials has gradually shifted to a tight balance, driving the lithium carbonate price to rebound from its bottom.

Zeng Youpeng stated, 'It is expected that lithium carbonate demand growth will be around 30% in 2026.' Despite new production capacity coming online in 2026, global lithium carbonate supply growth is expected to concentrate mainly in the second half of the year, with increased uncertainty on the supply side. During peak demand periods, supply-demand tensions may continue to push lithium carbonate prices higher.

Li Pan, a lithium industry analyst in the New Energy Division of Shanghai Steelhome, also noted that lithium carbonate prices are currently in a period of fluctuating upward movement following a 'V-shaped reversal.' The market logic has shifted from 'supply surplus' to 'tight supply-demand balance,' with the price midpoint showing a clear increase compared to the low point in 2025. It is expected that the price midpoint for lithium carbonate in 2026 will remain around 150,000 yuan per ton.

The annual report also showed that the Tibet Mamixi Salt Lake project by Zangge Mining entered the substantive construction phase in 2025. The project is expected to fully commence operations in the third quarter of 2026, with annual lithium carbonate production reaching 20,000 to 25,000 tons. Against the backdrop of volatile lithium prices, Li Pan stated that salt lake projects, with their extremely low cost curves, have shown stronger resilience during industry consolidation, becoming the 'rigid supply' in the market.

Zeng Youpeng stated that the core competitiveness of upstream lithium resource companies is mainly reflected in resource reserves and quality, mining and lithium extraction costs, industrial chain collaboration and integrated layout, as well as supply chain security and financing capabilities.

The entry of the 'Zijin system' brings top copper resources under control

Industry insiders generally believe that the entry of the 'Zijin system' will further enhance Zangge Mining's core competitiveness.

Wu Jianhui, Chairman of Zangge Mining, stated in his letter to shareholders in the 2025 annual report that the company has officially joined Zijin Mining Group, marking a historic change in its governance structure.

On January 16, 2025, Zijin Mining acquired 24.82% of Zangge Mining’s shares through its wholly-owned subsidiary, Zijin International Holdings Limited (hereinafter referred to as 'Zijin Guokong'), for 35 yuan per share, totaling 13.729 billion yuan.

On April 30, 2025, Zangge Mining completed its change in control. The company's controlling shareholder changed to Zijin National Control, and the actual controller became the Shanghang County Finance Bureau. Zijin National Control and its acting-in-concert parties collectively hold 26.18% of the company's shares, while Zijin Mining holds 25.99% of the company’s shares.

Orient Securities' research report stated that through its controlling shareholder Zijin National Control, Zangge Mining strategically entered the map of the world’s top copper resources. Its core advantage lies in relying on the 'Julong Copper Mine,' a world-class project, to secure massive resource reserves with a clear expansion path.

In 2025, Julong Copper achieved revenue of 16.663 billion yuan and net profit of 9.141 billion yuan. Zangge Mining holds 30.78% equity in Julong Copper. During the reporting period, the company recognized an investment gain of 2.782 billion yuan from Julong Copper, accounting for about 70% of its attributable net profit.

On January 5, 2026, Zangge Mining stated on the investor communication platform that the main construction of the Phase II renovation and expansion project of the Julong Copper Mine, as well as the installation of core equipment, was fully completed, successfully passing integrated trial runs. Upon reaching full production capacity, Phase II will add a daily ore processing capacity of 200,000 tons. 'At that time, the combined daily processing capacity of Phases I and II will reach 350,000 tons, equivalent to creating 1.3 more ‘Julongs.’ This largest copper mine in China, the highest-altitude mine globally with the lowest selected grade, will take initial shape. Next, Phase II of the Julong Copper Mine will enter the final sprint stage of comprehensive debugging and official production.'

In terms of the secondary market, Zangge Mining's share price performed strongly in 2025. Within one year, the company’s stock price rose from a low of 27.10 yuan per share to a high of 87.68 yuan per share, with a maximum gain of 223.54%. As of the close on March 13, the company's market value was approximately 125.2 billion yuan.

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