Dual Engines of Resource Security and Intelligent Transformation Drive Mining Sector into a Favorable Allocation Window

Period: 2026-01-19 — 2026-01-25 | Sources analyzed: 43 | Avg. relevance: 8.5/10

Bottom Line

This week's intelligence indicates that China's mining sector is undergoing a dual-pronged strengthening centered on "upstream resource integration" and "intelligent & green equipment upgrades." Investors should increase holdings in large state-owned enterprises that are acting swiftly to gain control over key mineral resources (copper, rare earths, iron ore) and focus on allocating to leading companies with clear technological advantages and firm market orders in the high-end, green mining equipment sector. Avoid small and medium-sized equipment suppliers with high dependence on upstream resources but no integration actions, as well as those with lagging technological roadmaps.

Key Developments

1. Giants Accelerate Upstream Resource M&A, Strengthening Supply Chain Autonomy and Control — Yunnan Copper, Baowu Steel, China Rare Earth Group, Jiangxi Copper, and Zijin Mining all announced major resource acquisitions or capacity expansion plans this week, involving strategic minerals such as copper, rare earths, and iron ore, with total investments exceeding hundreds of billions of yuan. Portfolio Impact: Clearly positive for resource integrators with strong financial strength and state-owned background. Increase holdings in Yunnan Copper (000878.SZ), Jiangxi Copper (600362.SH), and relevant platforms under China Rare Earth Group. The resource self-sufficiency rates and reserve expectations of these companies are expected to improve significantly, providing solid support for their long-term profitability and valuation. While Baowu Steel's (600019.SH) overseas resource layout is strategically significant, attention should be paid to geopolitical and project integration risks.
2. Surge in High-End and Green Mining Equipment Orders, Clear Policy Catalysis — XCMG (Xuzhou Construction Machinery Group) signed a procurement agreement worth 5 billion yuan for drilling rigs and excavators with China Coal Group; Sany Heavy Industry launched intelligent excavators and secured a 1 billion yuan order for electric drilling rigs from China Energy Investment Group. On the policy front, the Ministry of Natural Resources explicitly requires new mining equipment to obtain green certification. Portfolio Impact: Order visibility and market concentration for leading equipment manufacturers will further increase. Focus on allocating to XCMG (000425.SZ) and Sany Heavy Industry (600031.SH). As industry leaders, they will benefit most from the equipment replacement cycle and the green transformation wave. Monitor the pace of increase in the revenue contribution of their high-margin intelligent and electric products.
3. Accelerated Vertical Integration in Domestic Rare Earth Supply Chain, New Trading Platform Launched — China Rare Earth Group completed a major asset acquisition, and China Minmetals Rare Earth Group invested 5 billion yuan to build a high-purity separation plant. Meanwhile, the Inner Mongolia Rare Earth Exchange officially commenced operations, aiming to reshape the rare earth trading model in the north. Portfolio Impact: The "supply-side" control in the rare earth industry is extending further from mining to high value-added processing, enhancing pricing power and profit stability for industry leaders. Monitor core listed platforms such as China Northern Rare Earth (600111.SH) and China Rare Earth (000831.SZ); their progress in resource acquisition and processing technology upgrades are key catalysts. The liquidity and price discovery functions of the new exchange require ongoing observation.
4. Policy Combo: Raising Production Targets Alongside Mandatory Green Standards — The National Energy Administration raised the 2026 coal production target to 4.7 billion tons, while the National Development and Reform Commission and the Ministry of Natural Resources issued new capacity replacement policies and mandatory green certification for mining equipment, respectively. The Ministry of Industry and Information Technology set a target for a 95% localization rate for mining equipment by 2027. Portfolio Impact: The overall policy environment is positive but differentiated. Coal producers (e.g., China Shenhua, 601088.SH) will maintain high capital expenditures under clear production targets; monitor the actual cost-reduction effectiveness of their smart mine investments. Equipment manufacturers face dual benefits from (green certification-induced) rising technological barriers and (localization target-induced) market protection, favoring technologically advanced domestic manufacturers and negatively impacting small players lacking technological reserves and some foreign brand agents.

Sector Pulse

Risk Watch

• Policy Implementation Intensity and Pace Risk — If policies such as green certification and localization rates are implemented too rapidly or strictly, they may increase compliance costs for equipment manufacturers in the short term and cause delays in some mining projects due to untimely equipment updates. Furthermore, the specific implementation rules of capacity replacement policies may affect the survival space of some small and medium-sized mining enterprises.
  • Probability: Medium
  • Impact: Medium-High
• Commodity Price Volatility Transmission Risk — Despite companies' efforts to improve resource self-sufficiency, unexpected declines in the prices of globally priced commodities like copper and iron ore would still impact the profit expectations of related resource companies and the return on investment for M&A projects. Global macroeconomic demand is a key variable.
  • Probability: Medium
  • Impact: High (for resource stocks)

Outlook

Key Events and Indicators to Monitor Next Week:

1. Further Details on China Rare Earth Group's Asset Acquisition: Focus on the reserves, grade, and asset valuation details of the acquired assets to assess their actual contribution to the listed company's performance.
2. New Order Data from Leading Equipment Manufacturers: Closely monitor the value and structure (share of electric/intelligent equipment) of new mining equipment orders for January announced by companies like Sany and XCMG.
3. Coal and Industrial Metal Inventory Data: Monitor changes in social and port inventories to verify the actual demand strength under high production targets.

Positioning consideration: Currently, a "barbell strategy" should be adopted: overweight resource leaders actively integrating upstream (copper, rare earths) on one end, and overweight leaders driving the technological revolution in intelligent green equipment on the other end. Moderately avoid ordinary manufacturers and traders in the midstream of the industrial chain that lack pricing power and technological moats.