Zijin Mining Eyes Lithium Expansion with Zangge Mining Acquisition

Zijin Mining Group, a leading Chinese copper and gold miner, is in talks to acquire a controlling stake in Zangge Mining, a move that could significantly expand its lithium resources and strengthen its position in the global lithium market. The acquisition, if successful, would align with Zijin's long-term growth strategy and its focus on copper and lithium.

Zijin Mining, with a market capitalization of over $67 billion, has been actively expanding its operations globally, acquiring copper and gold mines from Africa to Europe and Canada. The company has also been investing in lithium, recognizing its importance in the electric vehicle (EV) industry. As of December 31, 2021, Zijin had 50 million tons of KCl of potassium resources in Qarhan Salt Lake and had further expanded its lithium resource reserves through the acquisition of Tibet Ali Mamico Mining Co. Ltd., which is equivalent to about 2,180,000 tons of lithium carbonate.

The acquisition of Zangge Mining, which has significant lithium resources, would fit well with Zijin's strategy to become a major player in the global lithium market. The acquisition would also diversify Zijin's mineral portfolio, helping it mitigate risks associated with relying on a single commodity. Furthermore, the acquisition would facilitate geographic expansion, as Zijin gains access to new lithium resources and expands its presence in the lithium market.

However, Zijin may face potential challenges in completing this acquisition, given geopolitical tensions and regulatory hurdles. The company's president, Zou Laicang, has stated that the number and scale of deals completed by the company is fewer than previous years, although it's still "actively looking for merger and acquisition opportunities generally." The slowdown is due to fierce competition and a "fine tuning" of its M&A strategy, with projects attracting very high premiums and Zijin becoming more cautious, particularly as metals prices are relatively high. Considering the geopolitical and economic environment, Zijin will lift investments within China and neighboring countries, focusing on big projects that could have a significant influence on the company's performance, with a focus on gold, copper, and zinc, as well as new energy minerals.



In conclusion, the acquisition of Zangge Mining by Zijin Mining would align with the company's long-term growth strategy and its focus on copper and lithium. The acquisition would expand Zijin's lithium resources, diversify its mineral portfolio, and facilitate geographic expansion. However, Zijin may face potential challenges in completing the acquisition, given geopolitical tensions and regulatory hurdles. Investors should closely monitor the progress of this acquisition and its potential impact on Zijin's performance in the global lithium market.