Zijin Mining to acquire world’s largest primary molybdenum mine

Zijin Mining to acquire world’s largest primary molybdenum mine

Zijin Mining has entered into an agreement with Anhui Jinsha Molybdenum to acquire an 84% stake in the company for RMB5.91Bn (US$830M).

Blue View

The acquisition will result in Zijin Mining having control over the Shapinggou Molybdenum Mine project in Jinzhai County, Anhui. The project is planned to be commissioned around 2027 with a planned production of 27.2ktpy of molybdenum and a life of mine of 57 years.

Project Blue’s data shows that molybdenum supply is around 270kt in 2022, which would make the Shapinggou production plan account for around 10% of global supply. Production of molybdenum can be split into primary molybdenum-only (such as Shapinggou) and by-product production. Currently, there are only seven primary molybdenum mines with a production capacity of around 10ktpy of which two mines have the capacity to produce over 20ktpy. By-product supply is mainly linked to copper porphyry mines, which have grown to account for over 60% of molybdenum supply. However, recent dips in supply out of copper mines in Chile, the second-largest source of molybdenum after China, have dropped that market share back below 60% in 2021 and 2022.

The outlook for molybdenum supply is closely linked to the fortunes of copper mines. Over the medium term, by-product molybdenum is expected to account for most of the growth in supply, but greater uncertainty about the life of existing open pit mines materialises in the mid-2030s. Project Blue’s base case outlook sees modest growth for molybdenum demand, driven by applications in steel and upon commissioning the Shapinggou mine the market balance would require the displacement of some existing supply.

  • 16 Nov 2022
  • China
  • Zijin Mining
  • Molybdenum
  • Steel & Alloys

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