2025-09-08 06:23Summary of Zijin Mining (2899.HK) Conference Call Company Overview - Company: Zijin Mining (2899.HK) - Event: Asia Leaders Conference 2025 - Date: September 4, 2025 - Location: Hong Kong Key Industry Insights Copper Expansion - Zijin Mining is experiencing a strong volume growth outlook for its copper projects in Tibet, which is faster than previously expected - Key projects include: - Julong Phase II, expected to complete construction by the end of 2025 - Zhunuo, set to complete construction in the second half of 2026 - Xietongmen, anticipated to start operations in 2027 - Projected copper output from Tibet is expected to increase to 440-500kt when all three projects are fully ramped up, compared to 170kt in 2025, contributing to a total copper output of 1.4mnt by 2028E - Combined with growth in Serbia, Zijin is on track to meet its copper volume target of 1.5-1.6mnt by 2028E, even without growth from Kamoa [5][5][5] Competitive Strengths - Zijin's unique strength lies in its mining operations, developed from its inception by focusing on low-grade mines - The company has built technical expertise in low-grade mine development, difficult ore beneficiation, and large open-pit mine operations - An in-house team comprising mining, beneficiation, exploration, smelting, R&D, construction, trading, and logistics enhances its competitive edge - The core management team consists of professional mining engineers, further strengthening operational capabilities [5][5][5] Cost Trends - Unit production costs for gold and copper increased by 15% and 8% year-over-year in the first half of 2025, respectively - Cost increases attributed to: - Decline in ore grades in Timok-upper, Columbia, and Rosebel gold projects - Changes in strip ratios and transportation distances - Impact from newly acquired projects, including La Arena and Akyem, which face high depreciation and amortization before open-pit mining life extension - Zijin aims to improve operations and reduce costs in the second half of 2025, targeting a full-year unit COGS increase of 5-8% year-over-year for mined copper and gold [6][6][6] Project Updates - Shapinggou Moly Project: Zijin has completed 84% of the stake acquisition, with total moly resources of 2.34mnt and an average ore grade of 0.143%. Expected annual moly production is 20kt when fully ramped up, increasing total output to 30-40kt. Construction is projected to take 3-4 years [5][5][5] - Lithium Projects: The Laguocuo brine project has resumed production, while the Hunan lepidolite mine and 3Q brine project in Argentina are ready to launch operations in the second half of 2025, contingent on stable lithium prices. However, Zijin has downplayed its 2025E lithium volume target of 40kt LCE due to weak pricing [5][5][5] Financial Projections - 12-Month Price Target: - HK$30.00 for Zijin Mining (H) - Rmb31.00 for Zijin Mining (A) - Current prices: HK$26.68 and Rmb23.87, indicating potential upsides of 12.4% and 29.9%, respectively [9][9][9] - Market Cap: HK$709.1 billion / $90.9 billion - Revenue Projections: Expected to grow from 303,640 million Rmb in 2025E to 334,123 million Rmb in 2026E [9][9][9] Risks - Earnings sensitivity to commodity prices: - 3.1% change in earnings for every US$100/oz change in gold price - 2.2% change for every US$0.10/lb change in copper price - Risks associated with project execution and slow progress, which are critical for sustaining growth - Currency and country risks related to overseas assets [8][8][8]