Group 1 - The European Commission President Ursula von der Leyen's strong rhetoric towards China regarding rare earth supplies has garnered international attention, using rare earths as leverage against China [1] - China holds an unassailable dominant position in the global rare earth industry, controlling approximately 70% of the market share and possessing advanced technology in rare earth processing [3][5] - The European attempt to establish a "rare earth alliance" to bypass China has not made substantial progress and appears ineffective against China's established rare earth traceability management [7] Group 2 - Von der Leyen's shift in attitude after meeting with the U.S. government highlights deep-seated rifts between Europe and the U.S., as the Inflation Reduction Act attracts significant investments to North America [9] - The reality of "resource dependence" exposes the EU's lack of strategic autonomy and its inability to effectively counter U.S. economic pressures while being unable to challenge China's core resource advantages [9][11] - China's resource advantages and strong market appeal create a solid defensive barrier, revealing the fragility of the so-called "alliance" between the U.S. and Europe when faced with individual interests [11]

Core Viewpoint - Zijin Mining, led by Chen Jinghe, is facing challenges due to recent seismic events at its Kamoa-Kakula copper mine in Africa, while simultaneously planning to spin off its gold subsidiary to capitalize on rising gold prices and enhance its financial position [1][4][5]. Group 1: Copper Mining Challenges - The Kamoa-Kakula copper mine has experienced multiple seismic events, leading to temporary halts in mining operations, although no injuries have been reported [2][10]. - The mine's production guidance for 2025 has been revised down from 520,000-580,000 tons to 370,000-420,000 tons due to the flooding caused by the seismic events, which is expected to impact Zijin's copper output by approximately 44,000-93,000 tons this year [13]. - The Kamoa-Kakula mine contributed 1.72 billion yuan in profit last year, accounting for only 5% of the company's total profit, indicating that while the impact is significant, it is manageable [13]. Group 2: Gold Business Expansion - Zijin Mining is planning to spin off its subsidiary, Zijin Gold International, for a listing on the Hong Kong Stock Exchange, with net assets exceeding 20 billion yuan, aiming to strengthen its gold business [4][14]. - The gold market is thriving, with Zijin Gold reporting a net profit of 4.46 billion yuan last year, nearly doubling year-on-year [16]. - The planned spin-off will include eight large gold mines located in South America, Central Asia, Africa, and Oceania, with a total resource volume of 1,800 tons and an annual production of 46 tons [18][20]. Group 3: Financial Strategy and Future Outlook - The company aims to enhance its financial foundation by leveraging the rising gold prices through the spin-off, which could raise significant capital to support its operations [34]. - As of March 31, Zijin Mining had a debt-to-asset ratio of 54.89% and cash reserves of 40.22 billion yuan, indicating a solid financial position despite the challenges faced [34]. - The management is focused on improving efficiency and reducing costs, with a goal to recover lost profits from the copper segment while expanding its gold assets [34].

Investment Rating - The report rates the non-ferrous metals industry as "Positive" for 2024 [4] Core Insights - The non-ferrous metals industry is expected to see profit improvement in 2024, with the characteristic of "resource supremacy" becoming more pronounced. Supply from the mining sector remains rigid, while companies are cautious with capital expenditures amid increasing macroeconomic volatility and export policy restrictions from various countries, leading to enhanced supply constraints. The demand side shows a fragmented demand landscape under the backdrop of de-globalization, with re-industrialization in Europe and the US and economic growth in emerging markets being the main demand drivers. Revenue and net profit for the non-ferrous sector are projected to grow slightly, indicating a gradual improvement in industry prosperity. Resource-based companies, particularly in copper, gold, aluminum, tin, and tungsten, are expected to perform better, with a growing focus on resource scarcity and strategic importance [19][22][26]. Summary by Sections 1. Industry Overview - The non-ferrous metals sector is projected to achieve a revenue of CNY 3.47 trillion in 2024, representing a year-on-year growth of 5.86%, and a net profit of CNY 138.41 billion, reflecting a slight increase of 1.77% [22][26]. 2. Market Dynamics - The report highlights that industrial metals experienced significant price fluctuations due to US trade tariffs in early April, but prices have since rebounded as negotiations exceeded market expectations. Small metals continue to perform well, with tungsten prices reaching new highs amid strengthened domestic export controls [20][21]. 3. Policy Changes - Domestic measures to tighten resource export controls have been noted, alongside international collaborations for mineral investment and development. Key actions include China's crackdown on strategic mineral smuggling, Australia's commitment to establishing strategic reserves for critical minerals, and various agreements between countries to enhance mining cooperation [20][21]. 4. Company Performance - Chinese listed copper companies have shown a significant increase in resource and reserve volumes, with a 27% year-on-year increase in resource volume and a 25% increase in reserves. Notable companies like Zijin Mining and Minmetals Resources have made substantial acquisitions and exploration investments to secure resource safety [22][28][32].