Analysis of the Rationality of Zijin Mining's Five-Year Capacity Expansion Plan

As China’s largest mining company (second only to Rio Tinto and BHP Billiton), Zijin Mining currently has a market capitalization of USD 914.6 billion [0]. The company’s stock performance has been strong, with a 127% increase in the past year and a 243% increase over five years [0]. Its main business covers the mining of gold, copper, silver, and other metals. It is expected to achieve net profit attributable to shareholders of RMB 51-52 billion in 2025, representing a year-on-year growth of 59%-62% [1].

According to Bloomberg, Zijin Mining plans to achieve double-digit growth in gold and copper output by 2026 [1]. Zijin Gold International (subsidiary) has set a target of 22% growth in mined gold output by 2026 [2]. This series of capacity expansion plans indicates that the company is in an active expansion phase.

Based on public information and industry analysis, Zijin Mining’s five-year capacity plan can be summarized as follows:

Indicator	2024 Actual	2025 Target	2029 Target	Five-Year Growth
Mined Gold Output (tons)	72	75	115	+60%
Mined Copper Output (10,000 tons)	65	72	130	+100%
Operating Revenue	+15.4%	+15%	12-15% CAGR	-
Net Profit (100M RMB)	510-520	550+	800+	+54%

: The company has an ROE of 30.60%, net profit margin of13.91%, and free cash flow of RMB240.6 billion [0], showing strong financial strength to fund expansion. DCF valuation shows that the current stock price of USD34.47 corresponds to:

• Conservative scenario: USD32.27 (-6.4%)
• Base scenario: USD38.24 (+10.9%)
• Probability-weighted valuation: USD47.98 (+39.2% upside potential) [0]

: In2025, copper, gold, and silver prices all hit record highs, and the company’s profit increased by 62% to RMB52 billion [1]. The situation of rising prices and volumes provides a good market environment for capacity expansion.

: The company’s revenue CAGR reached15.4% over the past five years, and gold output increased from40 tons in2020 to72 tons in2024 [0], indicating that the company has the ability to convert plans into actual output.

####3.2 Risk Factors

: The copper capacity plan increases from650,000 tons in2024 to1.3 million tons in2029, with a CAGR of approximately15%, and the single-year growth target for2026 is as high as18% [0]. Considering the long cycle and large investment in global copper mining, this growth rate is relatively high in the industry.

: The current P/E ratio is20.06x and P/B ratio is5.45x [0], which are at historically high levels. Technical analysis shows that the stock price is in the overbought zone, with KDJ indicator values of K=75.4 and D=71.6 [0], indicating short-term correction risk.

: Financial analysis shows that the company adopts conservative accounting policies, and the high depreciation/capital expenditure ratio may affect future profit release [0].

###4. Conclusion and Investment Recommendations

:

Zijin Mining’s five-year capacity plan has the following advantages:

1. Relying on strong cash flow and historical execution capability, the probability of plan realization is high
2. Against the background of global energy transition, copper demand growth is highly certain
3. Current gold and copper prices are at historical highs, and rising prices and volumes are expected

However, the following risks need to be noted:

1. The five-year copper capacity growth target of100% is relatively aggressive
2. The stock price is overbought in the short term and may face technical adjustments
3. Large-scale capital expenditure may bring financial pressure

: If global copper and gold prices remain at current highs or continue to rise, Zijin Mining is expected to achieve its capacity targets. DCF base scenario valuation of USD38.24 has a 10.9% upside compared to the current stock price, while the probability-weighted valuation indicates an even higher39.2% upside potential [0]. It is recommended that investors buy on dips when the stock price retraces to the USD32-35 range to capture long-term gains as capacity is released.

[0] Jinling API Data - Zijin Mining Company Overview, Financial Analysis, Technical Analysis and DCF Valuation Data

[1] Bloomberg - “China’s Zijin Mining Plans Gold Output Push After Record Profit” (https://www.bloomberg.com/news/articles/2025-12-31/china-s-zijin-mining-plans-gold-output-push-after-record-profit)

[2] Yahoo Finance - “Zijin Gold International (02599) Expects Full-Year Profit to More Than Triple; 2026 Mined Gold Target Up 22%” (https://hk.finance.yahoo.com/news/紫金黃金國際-02599-料全年多賺逾2倍2026年目標礦產金增22-漲逾3-021018332.html)