Source: Bloomberg
Author: Jack Farchy, Alfred Cang, James Attwood
Shortly after graduating from Chen Jinghe University, the task given to him by a government official changed his life.He was told to go to Zijin Mountain to find gold.
In 1982, the geological graduate came to the remote and humid hills in southeast China and worked in the mountains covered by forests.His bet was rewarded.The mining bed that Chen Jinghe team finally discovered has become the largest gold mines in the country, and the cornerstone of Zijin Mining has grown into a market value of $ 67 billion (S $ 86.9 billion).Today, the company is promoting the growth of copper supply and competing with some old -fashioned companies in the global resource industry.
After thirty years of exploration and acquisition, Zijin Mining has been mining gold, copper and lithium in multiple mainland.This nominal state -owned enterprise is actually more like a private company, with relatively few employees, flexible investment methods and strong risk tolerance.Essence
"In the first ten years, we have developed gold and copper in Zijin Mountain. In the second decade, we have expanded throughout China. In the past ten years, we have turned to global expansion," 66 -year -old Chen Jinghe in Xiamen GroupHeadquarters said.Xiamen is a coastal city and a three -hour drive from a mine with the same name as the company.
In order to make up for the excessive expenses of the previous prosperity period, Western and American resource groups such as British and American Resources Group have been controlling expenditures over the past ten years, and most of them have not yet sufficient wallets.However, Zijin Mining and Luoyang's molybdenum industry, such as the prosperity of the industry, moved forward in the past.As a result, China, which has long occupied the field of smelting in the field of smelting, has now been able to significantly expand its channels to obtain mineral copper.
With the increase in the African, the Balans Peninsula, and domestic new businesses, the metal output of Zijin Mining has increased more than double the past five years.Based on equity, the company was the sixth largest copper mine producer in the world last year.
To some extent, this expansion echo the status of China as a global growth engine and major commodity consumer countries.However, Zijin Mining is just a microcosm of many Chinese companies -they set off a wave of mining supply. Through innovation and investment in curve overtaking, it is usually unsatisfactory to invest billions of dollars in places, changing the global metal industry pattern.China has dominated the refining of lithium and has established a strong lithium supply chain.The nickel industry has also experienced transformation.
"People ask me whether China can copy the success of lithium ore in the copper ore field. The answer is that copper mines are much more difficult, but the growth of copper ore in the next few years will mainly come from the areas where China invests strongly." BMOCapital Markets is responsible for the director of commodity research, COLIN HAMILTON, the managing director.
Of course, in the face of the deteriorating geopolitical adversity, the global key mineral battle is anxious, and the realization of these blueprints is not as easy as before.
"As a Chinese company, future expansion will be more difficult," said Chen Jinghe, "As an investor, we cannot ignore these pressures."
The Western market is increasingly conflicting with China's acquisitions, and the Canadian government has worked hard to curb the impact of foreign state -owned enterprises' investment in its natural resources on Zijin Mining.Zijin Mining has previously stated that it will not be stepped on because the Canadian government restricts foreign investment in its mining industry.
"All this is very regrettable," Chen Jinghe said that mining companies will feel the absence of Chinese capital.Companies like Zijin Mining can make strategic investment in raw materials from the perspective of long -term perspectives. It has long been an important source of funds for primary mining companies.
Chen Jinghe said that the opportunity of Zijin Mining will still come, even if they appear in a place where large Western mining companies dare not get involved.
"In order to have a better choice, we will go to the most abundant resources in the world. Even if the degree of development there is relatively low, or go to many international mining companies that think there is any problem," he said."This is our differentiation."
After being listed in Hong Kong in 2003, Zijin Mining accelerated.From 2006 to last year, the company spent at least $ 7 billion for acquisitions, most of which were completed overseas in the past ten years.In 2021, Zijin Mining acquired the Canadian mining company Neo Lithium Corp to march for the first time.
The scale of many acquisitions is not large. The largest transaction in Zijin Mining so far was the acquisition of Canadian Nevsun Resources Corporation for $ 1.4 billion in cash in 2018.But it was the early phase of acquisition that made Zijin Mining stand out.This is enough to ensure that the company's value is nearly nine times ten years ago, and it is expected to be among the top three in copper ore enterprises.It is estimated that by 2028, the copper output of the mining of Zijin Mining will rise from 1 million tons last year to up to 1.6 million tons -even if it contains some of the output of other shareholders, this number is still considerable.
The expansion of Zijin Mining is just right.With the advancement of energy transformation, the demand for copper has increased, and the copper price earlier this year has reached a record high.
