Zijin Mining Group Co., a leading Chinese producer of copper and gold, has agreed to acquire a 24.8% stake in lithium and potash producer Zangge Mining Co. for 13.7 billion yuan ($1.9 billion). This move marks Zijin’s largest investment to date and signifies its strategic push into the lithium market, driven by the growing demand for electric vehicle (EV) batteries. The deal also gives Zijin “controlling power” over Zangge, although the company has not disclosed further details about the agreement.
Zijin’s shares rose by as much as 1.6% in Hong Kong following the announcement. The acquisition follows the company’s aggressive international expansion over the past decade, positioning it among the world’s largest copper producers. While the company has a long history in gold mining, its recent focus on expanding into key commodities, including lithium, signals its growing ambition in the energy transition space.
Zijin’s interest in lithium comes amid a dramatic decline in lithium prices since late 2022, with prices slumping by nearly 90%. Despite the market downturn, the deal highlights continued deal-making in the sector, as mining giants, such as Rio Tinto, pursue acquisitions. For instance, Rio Tinto agreed to acquire Arcadium Lithium Plc last year for $6.7 billion.
Zangge Mining, based in the resource-rich Qinghai province, is primarily known for its potash production, which is used in fertilizers. However, the company derives about a third of its revenue from lithium extracted from salt lakes. The company had a market value of 46.6 billion yuan ($6.4 billion) on the Shenzhen Stock Exchange prior to the announcement. Zangge also holds investments in three undeveloped lithium brine deposits, which analysts believe is a key driver behind Zijin’s interest in the company.
The two companies have an established partnership, with Zangge previously investing in the Julong copper mine in Tibet alongside Zijin. Phase two of the Julong copper mine is expected to begin production at the end of 2025, with the Zangge-projected output expected to range between 92,000 and 108,000 tons. In phase three, production could rise to 180,000 tons, further boosting Zijin’s lithium portfolio.
Zijin’s acquisition will strengthen its position in copper, lithium, and potash, enhancing its resource base while improving operational efficiency at Julong. Additionally, the transaction will give Zijin a greater influence in Zangge’s management. The new board of Zangge will consist of nine members, with Zijin holding the right to recommend four non-independent directors and one independent director.
This move is expected to accelerate Zijin’s growth and enhance its strategic focus on key commodities essential for the global energy transition.
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