CompanyGraph
Shanjin International Gold Inc.
000975 · SZSE · China
Extracts gold in restricted Chinese watersheds using a government permit no competitor can legally obtain today.
Shanjin International Gold extracts gold in Chinese watersheds by running cyanide heap leaching circuits — blasting ore, dissolving the gold into sodium cyanide solution, neutralising that solution, and shipping the resulting doré bars by contracted rail to LBMA-certified refineries in Shanghai and Shenzhen, where the output is refined to the 99.99% bullion standard required for Shanghai Gold Exchange delivery. Every step in that chain depends on a single water discharge permit, issued before provincial authorities closed the application window, that allows the neutralised process water to be legally released — without it, the leaching circuit has no lawful way to run regardless of how much ore sits in the ground. No competitor can obtain an equivalent permit in the same watersheds today, because the regulatory window that once issued them is now shut, so the permit functions less like an operating licence and more like a physical asset that cannot be built or bought. The one thing that could unwind the whole structure is the same provincial authority that issued the permit deciding, under tightening groundwater protection rules, not to renew it — at which point there is no alternative processing route and no other site that current regulations would allow.
How does this company make money?
The main revenue comes from selling refined gold bullion to Shanghai Gold Exchange market makers at the daily London PM fix price, plus a local premium on top. The company also sells doré bars — the partially refined 85–95% gold output — directly to regional refineries, receiving 96–98% of the gold's market value. A smaller stream comes from charging third-party mining operators a tolling fee to process their ore through the company's existing heap leaching facilities.
What makes this company hard to replace?
The Shanghai Gold Exchange requires an 18-month qualification process — including facility audits and product testing — before approving any new bullion supplier, so buyers cannot simply swap sources overnight. Electronics manufacturers in Guangdong Province have already certified this company's gold wire specifications inside their semiconductor assembly processes; switching to a different supplier would mean paying for costly requalification testing before a single part could move down the line. The company also holds priority freight slots with China Railways under established contracts, which a new supplier would not have.
What limits this company?
The detoxification circuit — the equipment that neutralises cyanide-laced water before it can legally be discharged — sets a hard daily ceiling on how much ore can be processed. Even if the company poured money into bigger leaching pads, it could not move more ore than that circuit can clear. Expanding the circuit requires a multi-year environmental impact assessment for any extra water discharge volume, so spending more money does not make the bottleneck go away any faster.
What does this company depend on?
The company cannot run without sodium cyanide from chemical manufacturers in Shandong Province, blast permits from local mining bureaus for open-pit extraction, water discharge permits from provincial environmental authorities, Shanghai Gold Exchange membership to sell refined bullion, and rail freight capacity on the Beijing-Shanghai line to move doré bars to the refineries.
Who depends on this company?
Shanghai Gold Exchange market makers rely on a steady flow of doré from this company to keep standard gold contracts liquid — if supply stopped, trading in those contracts would thin out. Electronics manufacturers in Guangdong Province have built their production schedules around a consistent supply of gold wire for semiconductor bonding; a disruption would stall their assembly lines. Jewelry fabricators in Shenzhen depend on predictable bullion deliveries to manage their manufacturing inventory.
How does this company scale?
Heap leaching pads and carbon adsorption circuits can be added in modular blocks as ore volumes grow, so the physical mining side can expand in a relatively straightforward way. The bottleneck that does not move with money is the water discharge permit: any increase in cyanide processing capacity requires a multi-year environmental impact assessment before a single extra litre of process water can legally be discharged.
What external forces can significantly affect this company?
When the Chinese renminbi rises against the US dollar, the company earns less in local currency from gold sales that are priced in international markets. Tightening groundwater protection regulations across northern China directly threaten the cyanide use permits the whole operation depends on. US-China trade tensions create a separate risk by limiting access to specialised mining equipment and replacement parts sourced from Western suppliers.
Where is this company structurally vulnerable?
If provincial environmental authorities revoke or refuse to renew the grandfathered water discharge permits — a decision entirely within their power, and one made more likely by tightening groundwater protection rules across northern China — the leaching circuit has no legal basis to operate. There is no alternative site the company could move to, because the same regulations that could cancel these permits also prevent new ones from being issued anywhere in the same zones.