Zijin Mining buys Asia’s largest molybdenum mine for 5.9 billion yuan

Image source: Figureworm Creative

Reporter | Xu Ning

Zijin Mining (601899.SH) bought a new mine again.

On the evening of October 21, Zijin Mining announced that it had obtained 84% of the equity of Jinsha Molybdenum for 5.91 billion yuan through public delisting.

Jinsha Molybdenum holds the exploration right of the Shapinggou molybdenum polymetallic deposit in Jinzhai County, Anhui Province, and is currently going through the procedures for exploration and mining. The mine is a world-class super-large porphyry molybdenum polymetallic deposit to be developed, with a molybdenum resource of 2,337,800 tons in the exploration right.

According to the development plan, the molybdenum mine is designed to produce 10 million tons of ore per year, with a total investment of 7.2 billion yuan and an average annual output of 27,200 tons of molybdenum concentrate after completion.

Zijin Mining said that after the acquisition, the company will own the largest molybdenum mine in Asia, with an additional molybdenum resource of 1.96 million tons, ranking among the top molybdenum producers in the world.

Molybdenum and its alloys have good thermal conductivity, electrical conductivity, high temperature resistance and other properties, and are widely used in metallurgy, chemical industry, energy, aerospace, machinery manufacturing and other fields.

China is the country with the most abundant molybdenum resources in the world and a major consumer of molybdenum. According to data from Antaike, the global supply of molybdenum was about 264,000 tons last year, and the demand was about 266,100 tons.

Gold Molybdenum Co., Ltd. is currently the No. 1 molybdenum resource enterprise in China. Last year, it produced 21,200 tons of molybdenum concentrate, accounting for nearly 16% of the national market share and nearly 7% of the global market share.

Soochow Securities Research Report stated that at the beginning of October this year, the price of molybdenum concentrate was as high as 3,010 yuan / ton, a record high in ten years. In the medium and long term, the demand for downstream stainless steel, military industry, and special steel alloys will strengthen; the global production capacity cycle on the supply side is in short supply, the grade of overseas mines has declined, and the high molybdenum price is expected to remain high for a long time.

Zijin Mining is China’s largest gold producer and the second largest copper producer. The financial report shows that as of the end of last year, the company held 2,373 tons of gold mine resources, accounting for more than 40% of the country’s total gold mine reserves.

Affected by the fall in gold and copper prices , in the third quarter of this year , Zijin Mining’s revenue was 71.734 billion yuan , a year-on- year increase of 21.35 %; its net profit was 6.307 billion yuan , a year- on – year decrease of 9.53 % .

Although performance has declined , Zijin Mining has been acquiring mines this year . In July this year, Zijin Mining invested nearly 500 million yuan to acquire a 100% stake in the Sava Yardon Gold Mine in Wuqia County, Xinjiang.

In October of this year , Zijin Mining announced that it planned to invest 3.98 billion yuan to acquire a 30% stake in UBS Mining , in order to enjoy part of the rights and interests of the Haihai Gold Mine. The sea area gold mine is the largest gold mine discovered in China in recent years . A week later , the company announced that it would invest 2.5 billion yuan to acquire the largest gold mine in South America .