In today’s briefing:
- Zijin Mining Group: Undervalued, Diversified, and Scaling Fast
- Digging Deeper: The Vote Failed, But the Value in Rio Tinto’s Dual Listing Remains Untapped
- Copper Tracker 12th May 2025: Bullish On China’s Whopping Copper Imports
- Iron Ore Tracker (12-May-2025): Looking for Green Shoots In Iron Ore
Zijin Mining Group: Undervalued, Diversified, and Scaling Fast
- 5-Year Growth: EBITDA doubled to RMB 72.6 bn; production scaled across copper, gold, and lithium through global M&A and low-cost execution.
- Capex Plans: USD 10.4 bn over 5 years across copper, lithium, and gold; includes Zijin Gold International spin-off by late 2025.
- Zijin is projected to deliver 19–27% CAGR in EBITDA and net profit through 2026, yet trades at just 6.3x 2025E EV/EBITDA — a notable discount to peers trading at 7–8x
Digging Deeper: The Vote Failed, But the Value in Rio Tinto’s Dual Listing Remains Untapped
- The shareholder vote failed, but momentum builds: Despite only 19.35% support, institutional backing signals growing pressure on Rio Tinto’s board to revisit the dual-listed company structure in future.
- Valuation gap widens, thesis strengthens: With RIO Ltd trading at a 23.2% premium over RIO plc, the economic case for unification — and the relative value trade — becomes increasingly compelling.
- Not statistical arbitrage, but event-driven optionality: The long plc / short Ltd setup lacks persistent mean reversion but offers asymmetric upside if governance shifts, tax changes, or structural catalysts force convergence.
Copper Tracker 12th May 2025: Bullish On China’s Whopping Copper Imports
- China’s copper and concentrate imports surged 24.4% YoY to 2.92 million tons, while the Yangshan Premium exceeded $100/ton, reaching a one-year high, indicating robust demand and tight supply conditions.
- The easing of US-China trade tensions, with the US expected to reduce tariffs, could potentially support a more bullish market outlook in the near term.
- We provide updates on Lundin Mining (LUN CN )’s latest Q1 results and updates from their call on Vicuna Minerals.
Iron Ore Tracker (12-May-2025): Looking for Green Shoots In Iron Ore
- Iron ore prices remain around $97/ton, down 0.5% WoW, staying within a long-term range of $95-$130/ton over the past four years, indicating sustained price stability at the lower end.
- With weather conditions improving in Australia, we expect iron ore shipments to start increasing and China to import more than 100 million tons/month.
- We like Fenix Resources (FEX AU). The company recently presented at the RIU Resources Round-up Conference in Sydney on 7 May 2025.
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