Chen Jinghe's third IPO, the ambition and anxiety of the "King of Gold" in China

In the past year, the fluctuations in gold prices have left "King of Gold" Chen Jinghe, who seems to have profited significantly, in an uneasy position. Having started from mergers and acquisitions, he is simultaneously seeking capital market support through both equity and debt issuance while continuing to pursue large-scale mergers and expansions.

On May 19, at the headquarters of Zijin Mining in Shanghang County, Fujian Province, Chairman Chen Jinghe was presiding over the 2024 annual shareholders' meeting. The most noteworthy aspect of this meeting was the approval of four special resolutions related to financing.

The special resolutions included authorizing the board to issue additional A-shares and/or H-shares, granting a general authorization for issuing debt financing instruments, and extending the validity period of the resolution for issuing convertible corporate bonds to unspecified objects.

During the voting session, these resolutions faced considerable "resistance," with over 40% and more than 70% of H-share shareholders opposing the debt financing authorization and the additional issuance authorization, respectively.

Last year, Zijin Mining made a profit of over 30 billion yuan, yet it insists on financing despite shareholder opposition. Is Zijin Mining "earning more but lacking more"?

In reality, behind the impressive performance, the growth in production of gold and copper, which are core businesses, is limited in 2024. Zijin Mining's profit growth mainly relies on the surge in gold and copper prices over the past year.

At the same time, Zijin Mining's performance growth has slowed, and frequent financing and acquisitions have also put pressure on its funds. Last year, Zijin Mining alleviated its financial pressure through 20 billion yuan in financing, and by the end of 2024, its funding gap had exceeded 10 billion yuan.

On May 17, Chen Jinghe completed another significant bet on the expansion of lithium mine resources.

On this day, Zijin Mining, through its subsidiary, completed the acquisition of 392 million shares of Zangge Mining for over 13.7 billion yuan, thereby gaining control of Zangge Mining. This move marks Zijin Mining's largest strategic acquisition since 2023.

In addition to internal troubles, the 68-year-old "King of Gold" also faces external challenges. Over the past year, global geopolitical tensions have intensified, and as a multinational metal mining listed company, Zijin Mining's situation is complex and unstable, forcing Chen Jinghe to take hedging measures.

Earlier, on the evening of April 30, Zijin Mining disclosed an announcement stating that the company plans to restructure its overseas gold mining assets under its wholly-owned subsidiary, Zijin Gold International, in Hong Kong, and apply for the spin-off of Zijin Gold International to be listed on the main board of the Hong Kong Stock Exchange.

If the listing is successful, this will be Chen Jinghe's third IPO. In 2003, Chen Jinghe led Zijin Mining to be listed on the Hong Kong Stock Exchange. In the same year, Zijin Mining's gold production ranked first in the country, and its market value exceeded 20 billion Hong Kong dollars. In 2008, Chen Jinghe again promoted Zijin Mining's A-share listing, issuing shares at a par value of 0.1 yuan and raising 9.8 billion yuan. That year, all natural persons among the company's top ten shareholders became billionaires. Chen Jinghe also became the "King of Gold" in China.

This "King of Gold," who rose from the mountainous areas of Fujian, has transformed a small county-level mining company into a giant with nearly 4,000 tons of gold resources and ranked among the top four in the global copper industry over 30 years. Amidst the unstable fluctuations in gold prices, the outside world is once again focusing on his significant bets and the journey of his third IPO

01 The Unstoppable "M&A War Machine"

Mergers and acquisitions have always been an important means for Chen Jinghe to expand his business territory. According to Choice data, from 2009 to 2021, Zijin Mining conducted several M&A transactions almost every year. In just 2024, Zijin Mining completed four large-scale acquisitions.

The acquired Zangge Mining has three major businesses: potassium, lithium, and copper. Through this equity acquisition, Chen Jinghe further expanded Zijin Mining's business territory in lithium and potassium resources.

Zijin Mining stated that by absorbing Zangge Mining's salt lake development experience and low-cost lithium extraction technology, it will promote the development of the company's "Two Lakes and Two Mines" lithium project.

The "Two Lakes and Two Mines" refer to Argentina's 3Q salt lake, the Manono lithium mine in the Democratic Republic of the Congo, the Lagocuo salt lake in Tibet, and the Xiangyuan hard rock lithium mine in Hunan. This is the lithium mining business that Zijin Mining is currently constructing. Zijin Mining first entered the lithium mining field in 2021, and according to its plan, once the "Two Lakes and Two Mines" lithium project is fully completed and put into production, it will become one of the world's most important lithium producers.

However, in the past two years, lithium prices have remained sluggish, and in 2024, Zijin Mining's lithium output is projected to be 0, but Chen Jinghe remains optimistic about the future of lithium mining.

According to its 2023 plan, the lithium carbonate production capacity for 2023 to 2025 is planned to be 0.29 million tons, 2.5 million tons, and 120,000 tons, respectively. In fact, the development progress of Zijin Mining's lithium business has been slow, and the lithium output guidance for 2025 has been lowered to 40,000 tons.

"Implementing mergers and acquisitions is the company's established strategy." At the 2024 performance briefing, Chen Jinghe emphasized Zijin Mining's adherence to the M&A strategy over the past 30 years. For mergers and acquisitions, Chen Jinghe has his own secret—counter-cyclical buying.

With this theory in mind, almost every market downturn has been a moment for Chen Jinghe to take the initiative, and counter-cyclical buying has allowed him to acquire many mineral resources at a lower cost.

In 2002, during the gold price trough, Chen Jinghe seized the opportunity to acquire the Guizhou Mercury Cave gold mine, the Aershele copper-zinc mine in Xinjiang, the Hunchun gold-copper mine in Jilin, and the Yulong copper mine in Tibet, propelling Zijin Mining into the top five domestic gold mining companies. In just a few years, Chen Jinghe acquired numerous mines in Canada, Russia, Mongolia, Peru, and South Africa. In 2007, he even invested in the UK-listed company Ridge Mining, becoming its largest shareholder. Subsequently, Chen Jinghe acquired Monterrey, setting a historical record for "China's acquisition of a UK-listed company."

Rewinding ten years to 2015, it was a year recorded in history for many mining companies, as it marked "the most terrifying bear market in mining history." Gold prices fell, and most mining companies were severely affected by the fluctuations, with Glencore losing nearly $5 billion, Barrick losing $3.1 billion, and Rio Tinto losing over $1.7 billion In that year, Chen Jinghe, however, went against the trend and made significant "counter-cyclical bottom-fishing" moves. Within a few months, Chen Jinghe successively acquired Australia’s Phoenix Gold Company, Barrick (Papua New Guinea) Company, and the Kamoa-Kakula Copper Mine in the Democratic Republic of the Congo. Among them, Kakula is the largest, high-grade, undeveloped copper mine in the world.

In 2024, Zijin Mining achieved an annual copper production of 1.07 million tons, ranking among the top four globally, and is one of the companies with the highest copper production growth among major global copper enterprises, with Kakula being one of its main contributing mines in the copper business.

In the past six months, Chen Jinghe also spent over 7 billion yuan in October 2024 to acquire a gold mine in Ghana and gained control of Zangge Mining.

As the "acquisition vehicle" relentlessly engaged in counter-cyclical bottom-fishing, the mineral output in Chen Jinghe's hands rapidly increased. Currently, Zijin Mining's copper and gold production ranks fourth globally and sixth nationally, respectively.

In 2024, Zijin Mining's operating income reached 303.64 billion yuan, a year-on-year increase of 3.49%; the net profit attributable to the parent company was 32.051 billion yuan, a year-on-year increase of 51.76%.

02 "China's Gold King" Internal and External Challenges

Looking back at the "gamble" of the "Gold King" over the past 30 years, it has been accompanied by both internal and external challenges, and each time there were reefs and storms, the keen Chen Jinghe led this large ship to avoid them in the past.

Since 2000, Zijin Mining has never recorded a loss, even during the industry turmoil in 2015, when most mining companies lost over 1 billion dollars, Zijin Mining still stood firmly at the forefront of the industry with a net profit of nearly 1.7 billion yuan.

This is greatly related to Chen Jinghe's risk awareness; even though Zijin Mining's net profit reached a new high in 2024, he still maintained a high level of vigilance.

"Not very good." This was Chen Jinghe's evaluation of Zijin Mining's market value management at the 2024 performance meeting. He stated that Zijin Mining has great growth potential, but its stock price is not impressive.

For investors, even though Zijin Mining's revenue and profit both increased, the slowdown in growth is an undeniable fact. In 2024, Zijin Mining's revenue growth rate was 3.49%, while in 2021, this figure was 31.25%. In just three years, the growth rate slowed down nearly tenfold. Not only investors, but Chen Jinghe's anxiety can be imagined.

At the same time, Zijin Mining also faces considerable debt pressure. By the end of 2024, its cash and cash equivalents amounted to 31.691 billion yuan, with short-term loans and liabilities due within one year reaching 48.748 billion yuan, resulting in a funding gap of over 10 billion yuan.

In August 2023, at the 30th anniversary celebration, Chen Jinghe comprehensively reviewed the history of his entrepreneurship. He lamented missing several significant opportunities in the past, especially in the lithium mine layout, while also candidly admitting the company's issues related to corruption, big enterprise disease, excessive cost input, and talent scarcity.

Previously, Chen Jinghe has repeatedly stated in public that if Zijin Mining only relies on its existing resources, these mines will eventually be depleted. Therefore, in addition to mining and acquiring mines, Chen Jinghe has been trying to increase the company's resource reserves through various means, including capital market methods In recent years, global geopolitical tensions and fluctuations have been constant. According to Zijin Mining's latest financial report, its overseas gold production accounts for as much as 64%, mostly distributed in high-risk areas such as South America and Africa.

To mitigate risks, in April 2025, Zijin Mining announced a significant capital restructuring plan, intending to reorganize its overseas gold mining assets under its wholly-owned subsidiary, Zijin Gold International, based in Hong Kong, and apply for a separate listing on the main board of the Hong Kong Stock Exchange.

"Gold is the 'ballast' of financial security." In the 2023 annual report, Chen Jinghe stated that in the face of global uncertainty and currency proliferation, the value-preserving properties of gold have become more prominent.

Regarding the spin-off listing of overseas gold mining assets, Chen Jinghe said that it is a self-protective measure from both external and internal perspectives.

Source: China Entrepreneur Magazine, Original title: "Chen Jinghe's Third IPO, the Ambition and Anxiety of the 'King of Gold' in China｜Weekly Figures"