Zijin Mining in Talks to Acquire Zangge Mining Lithium Stake

Zijin Mining seeks a controlling stake in Zangge Mining, bolstering its lithium ventures. This acquisition could significantly influence Zijin Mining's market position and its broader expansion strategy.

Date: 11-01-2025

AI Rating: 7

Impact of Acquisition on Zijin Mining

Zijin Mining Group is reportedly negotiating to acquire a controlling interest in Zangge Mining, a move that could vastly improve its position in the lithium market. With Zangge Mining's lithium operations focusing on extraction from salt lake brines, this strategic acquisition aligns with Zijin's aggressive expansion that aims to bolster its footprint in resource extraction.

Zangge Mining, which derives around one-third of its revenue from lithium, produced 9,278 metric tons of lithium carbonate in the first nine months of 2024. By acquiring a stake in Zangge, Zijin will undoubtedly benefit from the latter's established production capabilities, accelerating Zijin's goal of reaching an annual lithium production capacity of 300,000 metric tons by 2028.

Overall Market Environment

The lithium market has been marked by significant volatility since late 2022, with prices seeing a drastic decrease of nearly 90%. Despite the downturn, there are opportunities for mergers and acquisitions as players in the industry seek consolidation to optimize operations. Zijin's acquisition endeavors may position them favorably to capitalize on future price recoveries and increased demand for lithium, especially in the context of the clean energy transition.

Furthermore, the ongoing collaboration between Zijin Mining and Zangge Mining on the Julong copper project in Tibet complements the potential acquisition, enhancing operational synergies across both companies.

Stocks: ZIJMF 000408