Chinese Mining Company Zijin Sees Growing Threats to M&A Ambitions

(Bloomberg) — China’s top copper and gold producer Zijin Mining Group Co. said a slowing global economy, geopolitical tensions and commodity nationalism could curb its ambitions to do deals overseas.

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Net income rose 46% to 15 billion yuan ($2.1 billion) in the first half of the year, boosted by higher commodity prices and cost controls, Zinjin said in a stock exchange filing on Friday. Still, the company flagged negative factors going forward that could affect the company’s “revenue, profits, mergers and acquisitions of new overseas projects.”

China’s dominant role in mining supply chains—especially for critical minerals essential to industries from electric vehicles to military equipment—has prompted the U.S., EU and their allies to try to boost their own production. That poses a risk to the growth of Chinese companies, led by Zijin, which has bought copper and gold mines from Canada to Africa and expanded into lithium to become a key player in battery materials.

The company — one of China’s most acquisitive metals groups and its largest listed miner — has made similar comments before. Chief Executive Chen Jinghe said in March that he “will certainly be a target” of U.S. moves to address Beijing’s dominance in some minerals, given its leading role in the industry. Zijin has already slowed acquisitions amid higher project valuations and geopolitical tensions.

Zijin is determined to “expand its global presence while strengthening its resources in China and friendly neighboring countries,” the statement said.

The copper market will be in deficit in the medium to long term due to the metal’s use in the global green transformation, artificial intelligence and growing demand from emerging economies, it said. Gold will hover at high levels and geopolitical uncertainty will boost demand for safe-haven assets, while the decline in lithium prices could continue as supply and demand are balanced, it added.