Zijin Mining Expands Lithium Presence with $1.9 Billion Acquisition

Zijin Mining Group Co. (ZIJMY), a leading Chinese producer of copper and gold, has announced its acquisition of a 24.8% stake in lithium and potash producer Zangge Mining Co. for 13.7 billion yuan ($1.9 billion).

Strategic Expansion into Lithium

This investment represents Zijin Mining's largest acquisition to date and significantly expands its presence in the growing lithium market. Lithium is a key component in electric vehicle batteries, fueling its increased demand.

Controlling Stake in Zangge Mining

The acquisition grants Zijin Mining "controlling power" over Zangge Mining, which is based in the mineral-rich region of Qinghai. Zangge is a major producer of potash but also generates approximately one-third of its revenue from lithium extracted from salt lakes.

Synergistic Partnership

Zijin Mining and Zangge Mining have a pre-existing relationship through their joint investment in the Julong copper mine in Tibet. The acquisition strengthens this partnership and provides Zijin Mining with a controlling stake in Julong, which is expected to significantly increase its copper and lithium production capacity.

Lithium Market Dynamics

The lithium market has recently experienced a downturn in prices, but Zijin Mining's investment is seen as a strategic move to acquire assets at a favorable time. Zangge Mining has substantial investments in undeveloped lithium brine deposits.

Enhancement of Resources and Efficiency

The acquisition not only enhances Zijin Mining's resource base in copper, lithium, and potash but also promises to improve operational efficiency at Julong. The company plans to appoint a new board of directors with representation from both parties.

Positioned for Future Growth

Zijin Mining's strategic expansion into lithium aligns with its aggressive growth strategy through international acquisitions. The company's market capitalization stands at approximately $57 billion, and the acquisition cements its position as one of the world's largest copper miners and a major player in the lithium industry.