China Galaxy Securities has initiated coverage on China Nonferrous Mining Corporation Ltd (CHINFMINING) with a "Recommend" rating. The firm forecasts the company's revenue for 2026-2028 to reach $3.72 billion, $3.79 billion, and $3.85 billion, respectively. Net profit attributable to shareholders is projected at $680 million, $750 million, and $820 million for the same period. Using an exchange rate of 1 USD = 6.8 CNY, this translates to net profits of 4.62 billion yuan, 5.14 billion yuan, and 5.62 billion yuan, corresponding to earnings per share (EPS) of 1.2 yuan, 1.3 yuan, and 1.4 yuan. The current share price implies price-to-earnings (P/E) ratios of 10.5x, 9.5x, and 8.7x for those years. The report highlights the company's simultaneous efforts to increase copper reserves and production while pursuing external acquisitions, with incremental project capacities expected to be gradually released. This positions the company to potentially benefit significantly from profit elasticity driven by rising copper prices. Additionally, the company's dividend payout ratio and dividend yield are noted to be at leading levels within the industry.
Global Resource Footprint Anchored in African Copper
The company is recognized as one of the earliest Chinese enterprises to enter Africa for copper resource development and has grown into a globally leading vertically integrated copper producer. In 2025, it extended its resource footprint to Central Asia by acquiring the Benkara copper mine in Kazakhstan, forming a global resource portfolio. Its controlling shareholder is China Nonferrous Mining Group, ensuring a stable equity structure. Regarding resources, the company possesses excellent resource endowments. As of the end of 2025, it held 10 copper mines globally with total copper resources of 7.1826 million tonnes and cobalt resources of 198,000 tonnes. The average grade of its core mine resources ranges from 1.8% to 2.6%, significantly higher than the global average of 0.53%. In terms of production, the company achieved a total copper output of 549,600 tonnes in 2025, with 143,100 tonnes coming from its own mines, representing a raw material self-sufficiency rate of approximately 26%.
Dual-Pronged Growth Strategy: Organic and Inorganic
The company is pursuing both organic growth and external expansion, with the goal of potentially doubling its own copper mine capacity by 2030. 1) Organic Growth: The company is planning a series of capacity expansion projects. The new mine at CNMC Luanshya is designed to produce approximately 55,000 tonnes of copper-in-concentrate annually, to be developed in two phases with the first phase commencing in 2027 and the second in 2029. The Samba heap leach mine, once completed, will stably supply 20,000 tonnes of raw materials for SX-EW copper smelting and is expected to start in 2029. The Msesa ore body at Konkola North plans to add 15,000 tonnes per year of copper-in-concentrate capacity, with production targeted for late 2027, while the restart project for the West ore body is in the preliminary resource verification stage. The second phase of the Southeast ore body at Chambishi plans to add 46,000 tonnes per year of copper-in-concentrate, currently undergoing preliminary feasibility studies. Upon full completion, these projects are expected to collectively increase the company's own copper capacity by approximately 140,000 to 150,000 tonnes per year, potentially raising its annual own-mine copper capacity to around 300,000 tonnes by 2030. 2) External Expansion: In December 2025, the company acquired a controlling stake in Kazakhstan's SM Minerals, gaining the Benkara copper project. The northern area of Benkara holds copper metal resources of 1.58 million tonnes and is designed to produce about 45,000 tonnes of copper-in-concentrate annually, with production expected to start in 2029. 3) Smelting Business: In recent years, the self-sufficiency rate of copper from its own mines has remained relatively stable at 25%-30%. This rate is expected to improve further as new copper mine projects come online. Concurrently, profitability from the sulfuric acid by-product business associated with pyrometallurgical smelting has been increasing. In 2025, the company produced 1.068 million tonnes of sulfuric acid with a gross margin of 73.5%, contributing approximately 15% to gross profit and becoming a significant supplementary profit stream.
Copper Market Fundamentals Support Higher Price Floor
The global copper mining sector faces frequent disruptions from safety incidents, natural disasters, and power shortages, leading to a consistently slower-than-expected pace of production resumptions and increases. Factors such as resource depletion, insufficient capital expenditure, and extended development cycles for new projects constrain long-term supply elasticity. On the demand side, the electrification and industrialization processes provide strong support for copper demand, with emerging sectors like new energy, grid upgrades, energy storage, and AI data centers experiencing sustained rapid growth, maintaining resilience in consumption. The current tightness in mine supply persists. Coupled with potential supply chain shifts due to expectations of US tariffs and anticipated macroeconomic improvements, these factors are expected to drive copper prices higher. From a medium- to long-term perspective, strong constraints on mine supply, the transition between old and new demand drivers, and the heightened strategic importance of copper in a changing global landscape suggest the price floor is likely to rise steadily.
Key Risk Factors
The report identifies several key risks: potential monetary policy tightening by the US Federal Reserve; the risk of a significant decline in copper prices; the risk that the company's production releases may fall short of expectations; the risk of rising costs for the company; and risks associated with geopolitical changes.
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