China Mining Weekly: Lithium Mine Restart and Iron Ore Transport Restrictions Reshape Supply Landscape, Gold and Copper Sectors Maintain Strong Momentum

Bottom Line

This week's core events are CATL's full restart of its Jiangxi Jianxiawo lithium mine, which will significantly increase domestic lithium supply and potentially pressure lithium prices; meanwhile, China's restrictions on port withdrawals of Fortescue iron ore products have intensified the Sino-Australian resource game. It is recommended that investors reduce lithium-related exposure, increase holdings in gold and copper mining stocks (benefiting from strong earnings and capital inflows), and focus on mining technology targets with independent controllability.

Key Developments

1. CATL's Jiangxi Jianxiawo Lithium Mine Fully Resumes Production — The mine obtained its safety production permit on June 29, ending approximately 11 months of suspension, and has entered the equipment commissioning and personnel training phase. Portfolio implication: The marginal increase in lithium supply is clear, creating short-term headwinds for lithium prices; investors holding lithium mining stocks (such as CATL-related targets) should consider reducing positions and wait for downstream demand verification before re-entering.

2. China Restricts Port Withdrawals of Fortescue Iron Ore Products — China Mineral Resources Group has verbally informed steel companies to stop withdrawing Super Special Fines and Fortescue Fines iron ore products starting July 15. Portfolio implication: Expectations of tighter iron ore supply are rising, benefiting domestic mines and non-Australian iron ore suppliers; monitor changes in Chinese port inventories and alternative supply dynamics, go long on iron ore futures or increase holdings in domestic iron ore stocks (such as Gansu Energy).

3. Strong Profit Growth in the Mining Sector — From January to May, total profits of China's large-scale mining enterprises reached 479.52 billion yuan (approximately $50.7 billion), a year-on-year increase of 33.5%, of which coal washing and processing profits were 168.91 billion yuan, up 33.5% year-on-year. Portfolio implication: High profit growth supports valuations; continue to overweight coal and non-ferrous metal leaders; but be aware of base effects and demand slowdown risks in the second half of the year.

4. Gold and Copper Sectors Surge, with Sustained Capital Inflows — On July 3, China Nonferrous Mining rose 11.25%, Zijin Mining rose 9.37%, and gold ETFs surged after the non-farm payroll data; from Q2 to July 1, seven gold, silver, and jewelry stocks received net margin buying, with Zijin Mining seeing net buying of 742 million yuan. Portfolio implication: Macro easing expectations and safe-haven demand are resonating; maintain an overweight position in gold and copper mining stocks; focus on leaders like Zijin Mining, China Nonferrous Mining, and non-ferrous metal ETFs (such as Taikang 159163).

5. Accelerated Implementation of Intelligent and Unmanned Mining — Huangtaolegai Coal Company saw coal mining efficiency increase by 20% and single-shift personnel reduced by 16%; Yikong Zhijia, Yutong Mining Trucks, Shuguang Cloud, and Beijing Huayu are collaborating to deploy AI large models, etc. Portfolio implication: Smart mining technology is entering the large-scale application phase, benefiting mining technology service providers (such as Yikong Zhijia, which is about to go public); it is recommended to allocate to related targets on the Hong Kong Stock Exchange/STAR Market.

Sector Pulse

Risk Watch

• Risk of Oversupply Exceeding Expectations in Lithium — CATL's Jianxiawo mine restart, combined with the return of capacity from earlier production cuts and maintenance, could accelerate the decline in lithium prices if downstream new energy vehicle demand falls short of expectations. Probability: High. Impact: High.

• Escalation of Sino-Australian Trade Friction — After restricting Fortescue iron ore withdrawals, if China further expands import restrictions on other Australian mines, it could trigger Australian countermeasures, affecting the global iron ore trade landscape. Probability: Medium. Impact: High.

• Tightening Safety and Environmental Policies — The tightening of mining safety permit approvals (e.g., the Jianxiawo mine was suspended for 10 months) may subsequently affect more small and medium-sized mines, causing short-term supply disruptions. Probability: Medium. Impact: Medium.

Outlook

Key Events to Watch Next Week:

• Reaction of lithium spot prices (especially battery-grade lithium carbonate) to the Jianxiawo restart, monitoring whether key support levels are breached.
• Changes in Chinese iron ore port inventories and steel companies' procurement dynamics for alternative ore sources.
• Market reaction after the formal implementation of the Fortescue iron ore withdrawal restrictions on July 15.
• First-half performance forecasts for the mining industry (based on January-May profit growth), verifying the sustainability of profitability.

Position Recommendations: Maintain a moderate overweight in gold and copper, underweight in lithium; remain flexible on the iron ore sector, gradually increasing positions in domestic iron ore targets based on the extent of supply gaps after policy implementation; moderately increase positions in intelligent mining technology companies (such as Yikong Zhijia, Yutong Heavy Industries).