CompanyGraph
Chifeng Jilong Gold Mining Co., Ltd.
600988 · SSE · China
Mines gold in Inner Mongolia and turns it into finished bars sold directly on China's main gold exchange.
Chifeng Jilong Gold Mining mines gold deposits in Inner Mongolia's Chifeng region and converts the ore on-site — through crushing, flotation, and cyanide leaching — into doré bars that go straight onto the Shanghai Gold Exchange without any external refining step. That direct mine-to-Exchange pathway works because the company holds Chinese mining licences and cyanide-discharge environmental permits in the same Inner Mongolia jurisdiction, and those two permits together set the annual volume of doré that can legally leave the site — so adding more leaching equipment or drilling more of the ore body cannot push output higher if the quota stays fixed. Most competitors and all imported gold must complete a separate refining step before their bars meet Exchange delivery standards, and requalifying a new supplier's bars takes months, which means Shanghai Gold Exchange buyers cannot quickly replace Chifeng's supply even if they wanted to. If Beijing tightens cyanide discharge limits or cuts Inner Mongolia's mining quotas under its push to reduce heavy industry in the region, the leaching circuit stops, the doré stops, and the Exchange relationship breaks — because the permits are the business, not the ore in the ground.
How does this company make money?
The company sells doré bars by the ounce into the Shanghai Gold Exchange spot market, with the price set each day by the Shanghai gold fix. It also sells directly to Chinese jewelry manufacturers. Every ounce of gold that leaves the mine as a finished bar generates revenue at that day's market price.
What makes this company hard to replace?
The Shanghai Gold Exchange requires doré bars to meet specific delivery standards, and qualifying bars from a new supplier takes months of testing and reaccreditation. Chinese buyers also prefer domestically sourced gold because imported gold carries import duties and requires currency conversion, making it more expensive. Both factors make it slow and costly to replace this company's supply with another source.
What limits this company?
The Chinese government sets an annual extraction quota through its mining licences and environmental discharge permits for the Inner Mongolia jurisdiction. That quota is the real ceiling on how many doré bars the company can produce each year — it doesn't matter how much gold is still in the ground or how much leaching equipment is installed. Because those permits are handed out per jurisdiction by regulators in Beijing, spending more money cannot buy a higher limit.
What does this company depend on?
The company cannot operate without Chinese mining licences for its Inner Mongolia deposits, Chinese environmental permits covering tailings disposal and cyanide discharge, a steady supply of sodium cyanide for the heap leaching process, heavy mining equipment from Caterpillar or Komatsu, and reliable electrical grid capacity from the regional power network to run the processing facilities.
Who depends on this company?
Shanghai Gold Exchange market makers rely on this company as a domestic gold source; if it stopped delivering, they would face supply shortfalls in Chinese gold trading. Jewelry manufacturers in Guangdong province would lose a domestic gold supplier and need to find alternatives. The Chinese central bank would become more dependent on imported gold to build its reserves.
How does this company scale?
Processing equipment and cyanide leaching systems can be added across multiple pit locations within the Chifeng concession area, so the physical operation can grow relatively cheaply by replicating what already works. The hard limit that does not bend with investment is the Chinese government's per-jurisdiction mining quotas and environmental permits — those stay fixed no matter how much equipment is added.
What external forces can significantly affect this company?
Chinese environmental regulators can raise cyanide discharge standards or require more expensive tailings pond clean-up at any time, which would raise costs or force the operation to slow down. Beijing's industrial policy is already pushing to reduce heavy industry in Inner Mongolia, which puts the mining quotas under long-term pressure. Yuan-dollar exchange rates also matter because they affect how competitive domestically produced gold is against imported gold priced in dollars.
Where is this company structurally vulnerable?
If Beijing tightened cyanide discharge limits or cut Inner Mongolia's mining quotas as part of its push to reduce heavy industry in the region, the on-site leaching circuit would have to stop. Without leaching, the company cannot produce doré bars. Without doré bars, the direct mine-to-Exchange delivery relationship breaks — and finding another supplier who already meets Exchange specifications would take months.