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We believe Zijin Mining’s lithium business is set to enter an accelerated growth phase from 2026 to 2028, propelling the company into the ranks of the world’s most important lithium producers. As a traditional leader in mining, Zijin stands to benefit from a value reshaping process driven by the incremental contribution of its lithium segment.

Reasoning

A traditional mining leader moves into lithium, demonstrating its efficiency in business expansion. We see the company’s entry into the lithium sector as a natural extension of its industrial capabilities and core strengths accumulated in global mining development. First, regarding the mining development system, Zijin’s “five in one ore flow” engineering system and its international management expertise allow it to achieve rapid business expansion.

Second, on asset synergy, lithium operations share industrial experience and resources with other mining assets. The acquisition of Zangge Mining further unlocks the potential of its existing salt lake resources.

Third, on counter cyclical resilience, backed by strong cash flows from its gold and copper businesses, Zijin enjoys a far greater ability to navigate downturns than its pure play lithium peers.

The “two lakes and two mines” structure has taken shape, paving the way for the firm to become a globally leading lithium producer. Zijin’s lithium asset portfolio—comprising two salt lakes, two mines, plus Zangge Mining—now holds total lithium resources of 18.83mn tonnes of lithium carbonate equivalent (LCE). The company produced 25,000 tonnes of LCE in 2025.

Its plans include ramping up Phase 1 and advancing Phase 2 construction at the 3Q salt lake in Argentina, the Laguocuo salt lake in Xizang, and the Xiangyuan lithium mine in Hunan, while also bringing the Manono lithium mine in the Democratic Republic of the Congo into operation. The company targets 120,000 tonnes of LCE in 2026 and 270,000–320,000 tonnes by 2028, positioning it as one of the world’s most important lithium producers.

The lithium industry remains strong, with geo-economic risks and a demand-oriented premium on new energy underpinning valuations. On the demand side, global power demand continues to grow steadily, supported by improving economic viability for energy storage in China and strategic storage requirements overseas.

On the supply side, with resource nationalism on the rise and lithium supply disruptions becoming more frequent, we see further upside potential for lithium carbonate prices. The global lithium supply demand balance is undergoing mediumto long term structural shifts. Both geo-economic uncertainties and the new energy demand premium are likely to support high lithium prices and corporate valuations.

Financials and valuation

We leave our 2026 earnings forecast unchanged, but raise our 2027 forecast by 6.3% to Rmb100.4bn to reflect the incremental contribution from the lithium business. This translates into current A share P/E ratios of 9.8x and 7.7x, and H share multiples of 8.9x and 6.8x, for 2026 and 2027.

We maintain our OUTPERFORM rating. Under our P/E based valuation framework, we maintain our A-shares market price of RMB42.00 and H shares market price of HK$44.00, implying 2026e P/E multiples of 14.2x and 12.8x, and offering 45% and 44% upside.

Risks

Lithium prices fall more than expected; project execution falls short of schedule; copper and gold prices decline more than expected.