Fitch downgrades Zijin Mining

Fitch Ratings said it downgraded Zijin Mining Group Co., Ltd.'s long-term issuer default and senior unsecured ratings to BB+ from BBB-.

“The downgrade reflects Zijin's aggressive acquisition growth appetite, which will result in volatility in its leverage profile and is no longer commensurate with a BBB category rating. We expect Zijin's leverage to be sustained above 2.2x between 2022 and 2024, the level above which we would consider negative rating action,” the agency said in a press release.

Fitch noted Zijin announced three major acquisitions in October. The announcement followed the completion of three lithium assets in the first nine months of 2022. Zijin is also buying a 20% stake in Hong Kong-listed Zhaojin Mining Industry Co. Ltd. The acquisitions and investment year to date are expected to cost CNY 33 billion. The sum, the agency said, is more than double its earlier estimate.

The outlook is stable.

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