China’s largest copper and gold producer Zijin Mining Group said a slowing global economy, geopolitical tensions and resource nationalism could limit its ambitions for overseas deals.
The company’s net profit rose 46% to 15 billion yuan ($2.1 billion) in the first half of the year, helped by higher prices for its commodities and cost controls, Zinjin said in a stock exchange filing. However, the company noted negative factors going forward that could affect the company’s “revenue, profit, mergers and acquisitions of new overseas projects.”
China’s dominant role in mining supply chains – especially for critical minerals vital to industries from electric vehicles to military hardware – has left the US, EU and their allies scrambling to boost their own production. That poses a risk to the growth of Chinese companies led by Zijin, which has acquired copper and gold mines from Canada to Africa and moved into lithium mining as it seeks to become a key player in the battery materials market.
The company’s chief executive, Chen Jinghe, has previously said it would “certainly be a target” of US-led efforts to challenge Beijing’s dominance in some minerals given its leading role in the industry. Zijin has already slowed the pace of acquisitions due to rising project costs and geopolitical tensions.
Zijin “is committed to expanding its global presence by strengthening its position in China and friendly neighboring countries,” it said in a statement.
The report said the copper market would go into a deficit in the medium to long term due to the metal’s use in the global green transition, artificial intelligence and growing demand from emerging economies. Gold prices will fluctuate at high levels as geopolitical uncertainty boosts gold demand, while lithium prices may continue to slide as supply and demand rebalance, the company adds.
Hélène Tarin, Editor-in-Chief of the Asian Bureau, Rough&Polished
