Zijin Mining's Serbia Project Reaches Production Ahead of Schedule, Gold Increment Expected in H2
On July 28, 2026, Zijin Mining Group Co., Ltd. (hereinafter referred to as "Zijin Mining", stock codes: 601899.SH, 2899.HK) announced that the Phase II of its Timok copper-gold mine project in Serbia has achieved commercial production two months ahead of schedule. The project is designed to produce 6.5 tons of gold concentrate and 120,000 tons of copper concentrate annually. Zijin Mining stated that with Phase II reaching production, the company's annual gold output is expected to increase by 3.2 tons, further solidifying its position among the world's top ten gold producers.
Project Details: From Exploration to Production, China Speed Sets Record Again
The Timok copper-gold mine is one of Zijin Mining's key overseas assets, located in the copper belt of eastern Serbia. Construction began in 2022, with original production scheduled for end of September 2026. Thanks to the collaborative optimization of the China-Serbia team and improved commissioning efficiency of new equipment, actual production started about 60 days earlier than planned. Currently, the concentrator has operated continuously at full load for 72 hours, with recovery rate exceeding 95% of the design target. Zijin Mining Chairman Chen Jinghe stated in the announcement: "The early production of the Timok project fully demonstrates Zijin's large-scale mine construction capability in complex environments, and also provides strong support for the company's 'increase reserves and production' strategy in 2026."
The Serbian government welcomed this. Energy and Mining Minister Dubravka Đedović issued a statement today saying the Timok project will create 1,200 direct jobs locally and boost surrounding infrastructure and supporting industries. She emphasized that Serbia is committed to becoming an important mining and metal processing center in the Balkan region.
Performance Impact: Analysts Raise 2026 Profit Forecasts
Driven by this positive news, Zijin Mining's A-shares opened 3.5% higher in morning trading today and closed up 2.8% at 28.46 yuan per share; H-shares also strengthened, rising 3.2%. Several brokerages promptly updated their ratings. CITIC Securities issued a research report stating that the Phase II production of Timok will bring Zijin Mining's 2026 gold output to 65 tons, about 5% higher than previous forecasts; considering gold prices remain high (currently London spot gold at $4,055/oz), the project is expected to contribute net profit of about 1.8 billion yuan for the full year. Accordingly, CITIC raised its 2026 net profit attributable to parent company forecast by 6% to 31 billion yuan, maintaining a "Buy" rating with a target price of 32 yuan.
Guotai Junan analysts focused more on the cost side. The report stated that Timok's cash cost is expected to be below $800/oz, ranking in the top 25% of the global cost curve, significantly lower than Zijin Mining's overall average cost (about $1,150/oz). The early production of this project is likely to lower the company's overall gold production costs and improve gross margin.
However, some institutions also warn of overseas operational risks. Morgan Stanley reiterated a "Neutral" rating in a report released today, citing recent discussions in Serbia regarding labor rights for foreign companies, which may increase compliance costs. In addition, revisions to EU mining regulations may also affect future project expansions.
Overseas Expansion Accelerates: Chinese Miners Deploy Global Gold Resources
Zijin Mining's Serbia project is a microcosm of Chinese miners' "going global" strategy. In recent years, as domestic gold resource grades decline and environmental constraints tighten, leading companies such as Zijin Mining, Shandong Gold, and Zhaojin Mining have increased investment in high-quality overseas assets. According to the World Gold Council, as of the second quarter of 2026, Chinese companies held over 1,200 tons of gold resources overseas, a 40% increase from 2020.
Timok is located in Serbia, central Europe, close to the EU market and with good infrastructure. Zijin Mining also owns another large copper-gold mine in Serbia—Cukaru Peki—which is currently in the feasibility study stage. If progress goes smoothly, Zijin Mining's annual gold production capacity in Serbia could reach 10 tons by 2028, making it the company's second-largest overseas gold production region after Africa.
Meanwhile, other Chinese gold miners are also making moves. Shandong Gold's joint venture with Barrick Gold for the Veladero gold mine expansion in Argentina successfully started production on July 15; Zhaojin Mining announced last week that its plan to acquire Australia's Havilah Resources has been approved by the Australian Foreign Investment Review Board.
Industry Outlook: Gold Prices Remain High, Miners' Profit Margins Expand
Current international gold prices are oscillating in the $4,050–$4,100/oz range, supported by global inflation resilience, ongoing geopolitical conflicts, and central bank purchases. The World Gold Council's latest report estimates global gold demand in 2026 will reach 4,700 tons, with central bank net purchases of about 800 tons, the eighth consecutive year above 700 tons. On the supply side, large mine production growth is limited, making new projects like those of Zijin Mining the main sources of incremental supply.
For investors, the stock performance of miners like Zijin Mining is highly correlated with gold prices, also affected by production growth and cost control. Today's early production of Timok, combined with high gold prices, creates a double positive. However, concerns about a gold price pullback still exist. According to CME FedWatch data, the probability of a 25 basis point rate hike by the Fed in September has risen to 65%, and a strong dollar may cap gold's upside.
Investment Strategy: Focus on Production Ramp-Up Pace and Risk Management
For investors holding Zijin Mining shares, it is recommended to closely track the subsequent production ramp-up progress of the Timok project and the latest developments of other overseas projects (such as the Kamoa-Kakula copper mine in the DRC and the Buriticá gold mine in Colombia). Shenwan Hongyuan analysts noted that Zijin Mining has announced plans to issue up to 10 billion yuan in convertible bonds to supplement capital for overseas projects; if successfully issued, it may temporarily dilute equity but benefits long-term capacity expansion.
From an industry allocation perspective, if you are optimistic about the medium- to long-term gold trend, you may prioritize miners with "growth potential + low cost". Zijin Mining, Shandong Gold, and Zhaojin Mining all fall into this category. For risk-averse investors, gold ETFs (such as Huaan Gold ETF and Bosera Gold ETF) can be considered as alternatives.
In summary, the early production of Zijin Mining's Serbia project not only injects a strong catalyst for the company's own performance but also highlights Chinese mining companies' strength in global resource acquisition and operational management. Against the backdrop of a gold bull market, such targets with both volume and price increases deserve close attention.
