"Profit Cow" Achieves Dual Growth in Volume and Price, Zangge Mining Distributes 3.9 Billion in Cash Dividends Surpassing Net Income

21st Century Business Herald Reporter Dong Peng

All institutions are highly confident in the profit growth of Zangge Mining.

Last weekend, most institutions projected net profit expectations for 2026 exceeding 7 billion yuan, with some even setting a target price of 119 yuan, roughly a 50% increase over the current price.

It’s worth noting that in 2025, when Zijin Mining took control, Zangge Mining had already achieved a remarkable 210% increase. Why are selling-side institutions still willing to give buy or hold ratings?

This may be related to Zangge Mining’s current profit structure and the production pace of the “profit cow,” the giant copper company.

According to the annual report, in 2025, the company’s total revenue was 3.58 billion yuan, but its net profit attributable to the parent and cash dividends reached 3.85 billion yuan and 3.92 billion yuan respectively, both exceeding the company’s revenue scale.

Looking at profit sources, the giant copper company achieved a net profit of 9.141 billion yuan in 2025, contributing 2.782 billion yuan in investment income to Zangge Mining, accounting for over 70% of the listed company’s net profit.

“The value of the equity stake in the giant copper company continues to be released. This is China’s largest super copper mine, which not only contributed substantial profits during the reporting period but also reached a major milestone with the commissioning of its second phase on January 23, 2026,” said Wu Jianhui, Chairman of Zangge Mining.

This means that the copper production of the giant copper company will increase from 190,000 tons in 2025 to 300,000–310,000 tons this year, with an increase of over 100,000 tons becoming the main driver of the company’s short-term profit growth.

In addition, considering other known projects and strategic plans for the next three years, 2026 may even become the year with the largest profit increase for Zangge Mining.

The performance variables for Zangge Mining mainly come from the potassium, lithium, and copper sectors.

However, due to the different cyclical positions of these industries, their impact on the company’s profits varies. As of 2025, the company’s consolidated potassium chloride profits significantly outperformed lithium carbonate.

Driven by rising prices in large import contracts for potash fertilizers and market supply and demand factors, domestic potassium chloride prices increased overall in 2025.

Meanwhile, the average tax-included selling price of potassium chloride for the full year rose to 2,964.28 yuan/ton, up 28.57% year-on-year. Coupled with declining production costs, the company’s gross profit margin for potassium chloride increased by 19.81 percentage points to 64.64%.

This boosted the gross profit of the company’s potassium chloride products from 990 million yuan in the previous year to 1.91 billion yuan in 2025, making it a “ballast stone” for Zangge Mining’s performance.

In contrast, lithium carbonate business was affected by falling lithium prices and temporary shutdowns in July 2025. Although still profitable, its contribution to the company’s performance was significantly reduced.

During this period, the net profit of Zangge Lithium, the lithium salt subsidiary, was only about 1.23 billion yuan.

Overall, the potassium and lithium businesses contributed about 1 billion yuan in operating profit, while nearly all other profits came from investment income from the giant copper company.

The giant copper company is the largest in-scale copper mine in China, with an initial project capacity of 150,000–160,000 tons per year, commissioned at the end of 2021.

However, in recent years, its actual output has far exceeded this. After reaching 166,000 tons of concentrate in 2024, its output further increased to 194,000 tons in 2025.

Combined with the rise in international copper prices in 2025, the company reported revenue of 16.66 billion yuan and net profit of 9.04 billion yuan.

Zangge Mining, holding a 30.78% stake in it, recognized an investment income of 2.782 billion yuan, becoming the main force behind the company’s profit growth.

The performance-driving logic from the giant copper company is expected to continue and even strengthen further.

On December 29, 2025, the second phase of the giant copper company’s capacity was started for trial operation; on January 23, 2026, it was officially announced to be completed and put into operation.

This will comprehensively enhance the production capacity of the giant copper company, increasing its annual copper production from 190,000 tons to about 300,000–350,000 tons, molybdenum from 8,000 tons to about 13,000 tons, and silver from 109 tons to approximately 230 tons.

“After the second phase of the giant copper mine reaches full capacity, it will significantly increase the company’s investment income and lay a solid foundation for sustained profitability,” said Zangge Mining.

Zangge Mining’s disclosed production plan for 2026 estimates that the giant copper company will produce 300,000–310,000 tons of copper concentrate, with the company’s attributable output around 92,300–95,400 tons. If we roughly estimate based on the upper limit of 310,000 tons, the investment income contributed by the giant copper company in 2026 could rise to 4.5 billion yuan.

Plus, with the planned addition of 1.5 million tons of industrial salt and 5,400 tons of lithium carbonate rights from Mami Cuo Mine, Zangge Mining’s profit performance in 2026 is likely to continue and further improve.

It’s also important to note that these are potential increases in production volume, not including price-driven factors.

As of March 16, the prices of potassium, lithium, and copper products are all significantly higher than in 2025. For example, the spot settlement price of LME copper averaged $13,001 per ton this year, compared to $9,340 in Q1 2025 and $11,092 in Q4 2025.

It’s not hard to understand why sellers are optimistic about the company’s 2026 profit forecast exceeding 7 billion yuan, and this may not even be the company’s limit.

If Zangge Mining’s first-quarter earnings are solid or if copper and lithium prices rise unexpectedly, the full-year profit forecast is likely to be further revised upward.

“2025 marked a substantive upgrade in corporate governance. Zijin Mining became the controlling shareholder, injecting world-class mining management standards and international operational experience,” Wu Jianhui, Chairman of Zangge Mining, wrote in a letter to shareholders. He added that after the new management team took office, they fully aligned with Zijin’s system, reshaping a “simple, standardized, efficient” management model.

Wu Jianhui is currently an executive director, vice president, and chief engineer of Zijin Mining, chairman of the giant copper company, and took on the role of chairman of Zangge Mining in May 2025.

Details also show that Zangge Mining is aligning itself with its controlling shareholder.

According to historical announcements, Zijin Mining has released its production plans and development goals in three-year cycles since 2019, continuously ensuring strategic targets through internal project optimization and external resource acquisitions.

Alongside the annual report, Zangge Mining also disclosed a three-year (2026–2028) development strategy plan, clearly positioning the company’s current development as “focused on quality improvement, increased production, cost control, and efficiency enhancement to achieve significant improvements in operational metrics and effectiveness.”

Specific production targets include increasing potassium chloride from 1.03 million tons in 2025 to 1.15–1.25 million tons, lithium carbonate from 8,800 tons to 60,000–80,000 tons, and copper (via the giant copper company) from 59,700 tons to 120,000–130,000 tons.

Implementation measures include ensuring the commissioning and full production of the first phase of the Mami Cuo lithium project (500,000 tons/year), and promptly initiating the second phase, as well as focusing on early construction of a 2 million tons/year potassium chloride project, aiming for early commissioning.

Since joining Zijin’s system, Zangge Mining has achieved notable results in resource development, project construction, and operation.

For example, the Mami Cuo salt lake, which supports the lithium segment’s growth, has obtained a mining license and is now in equipment installation. The Laos potash project has received technical support from Zijin Mining.

“Appointing Zijin Mining’s deputy chief engineer as the technical team leader, gathering internal and external technical experts to advance filling technology and conduct brine solidification tests,” Zangge Mining stated at its performance briefing.

These strategic plans and measures focusing on potassium and lithium align with Zijin Mining’s positioning of Zangge Mining.

Before acquiring control, Zijin Mining had already clarified that to resolve intra-industry competition in lithium, it would prudently promote resource integration within 60 months of taking control, and when new competitive opportunities arise, Zangge Mining would be prioritized for related potassium and lithium business opportunities.

Cost and benefit are balanced, effort and reward are proportional. While Zijin Mining supports Zangge Mining with this billion-level investment, the company has also gained significantly.

First, by acquiring control of Zangge Mining, Zijin Mining’s direct and indirect holdings of the giant copper company increased by 8 percentage points to about 58%, allowing it to share short-term dividends from the second phase and plan long-term for the third phase.

Second, controlling Zangge Mining has expanded Zijin’s lithium resource reserves and added new resource layouts such as potassium, magnesium, and boron, as well as an additional A-share listed platform, increasing flexibility for subsequent asset integration.

Finally, the returns from this investment are already impressive. In 2025, Zijin Mining paid 3.5 yuan per share, totaling 13.729 billion yuan to acquire 24.98% of Zangge Mining.

As of March 16, Zangge Mining’s latest share price reached 80.64 yuan, with Zijin’s stake appreciating by 130.4%.