Zijin Mining and Jinduicheng Molybdenum (JDC) have signed a cooperation and equity transfer agreement to jointly develop the Shapinggou molybdenum project in Jinzhai County, Anhui Province, China.

The agreement formalises the cooperation outlined in a letter of intent signed in August 2025 and covers integrated mine development and downstream processing.

Under the deal, JDC will invest in and operate a smelter near the mine, holding 51%, while Zijin holds 49%. In return, Zijin will transfer a 24% stake in Jinsha Molybdenum, the company that owns and develops Shapinggou, to JDC for RMB 1.73Bn (US$248M). The transfer is conditional on JDC constructing and operating the smelter.

After completion, ownership of Jinsha Molybdenum will be 60% Zijin, 34% JDC, and 6% local government, with Zijin managing mine construction and operations.

Shapinggou has a planned capacity of approximately 27ktpy Mo, with operations potentially starting around 2030. Unlike most new molybdenum supply expected over the next decade, largely by-product from copper mining in South America, Shapinggou is a primary molybdenum mine.

Its economics are therefore more exposed to molybdenum price cycles. Chinese molybdenum concentrate prices were volatile in 2025 amid tight availability, and successful commissioning of the project could help stabilise domestic pricing.

The project is strategically significant for China, which remains reliant on imports despite producing about 46% of global mined molybdenum in 2025. Over last year, China imported around 62kt (gross) of molybdenum concentrates (~40kt Mo), accounting for 30% of global traded concentrates, mainly from Peru and Chile.

At full capacity, Shapinggou could offset around 68% of China’s concentrate imports and account for roughly 10% of global supply, improving feedstock security and supporting value-chain integration. Molybdenum is critical for steel, aerospace, automotive, energy, defence, and high-strength alloys, underscoring the strategic importance of domestic supply.

Developing a mine and smelter concurrently typically adds complexity, as is any greenfield project, though it is possible that Zijin’s mining and JDC’s smelting experience mitigates construction and ramp up risk. The project has received its mining license and EIA approval, but remains subject to additional permitting and approvals.