In the first half of the year, the epidemic crisis superimposed the world economic recession. Under the background of the decline in the performance of most industrial enterprises, Zijin Mining flexibly responded to market changes, achieving a non-net profit of approximately 2.42 billion yuan, a year-on-year increase of 46%, and operating cash flow of approximately 6.46 billion Yuan, a year-on-year increase of 47%, showing strong resilience and vitality to deal with complex situations.
In the first half of this year, the average international gold price was US$1,645.42 per ounce, an increase of 25.94% over the same period last year; the average price of gold in the domestic market was 369.98 yuan/gram, an increase of 28.48% year-on-year.
Zijin Mining seized the market opportunity and realized 20.24 tons of mineral gold under the circumstance of the continuation of the Pogla gold mining rights, which was an increase of 5.93% year-on-year. The gross profit of the gold sector accounted for 38.60% of the company's gross profit. Among them, overseas projects realized 12.13 tons of mineral gold, an increase of 6.08% year-on-year, accounting for 59.95% of the company's total.
As copper is an important main business of Zijin Mining, copper prices experienced a "roller coaster" of falling in the first quarter and rebounding in the second quarter. Data show that Lun Copper opened at US$6,156/ton at the beginning of the year, the lowest dropped to US$4,618/ton, and closed at US$6039/ton at the end of the period.
But even in the first quarter, when the copper price fell below the cost price of many companies, Zijin Mining, through effective management innovation and technological innovation measures, offset the previous gross profit of 1.741 billion yuan in its copper business, demonstrating high-quality risk resistance.
Since the second quarter, copper prices have steadily rebounded. Zijin Mining has increased its sales and achieved good economic benefits. The copper sector maintained a high growth trend, achieving 230,700 tons of mineral copper, a year-on-year increase of 34.85%, and gross profit accounted for 37.35% of the company's gross profit. Among them, 100.9 million tons of overseas mineral copper, an increase of 52.93% year-on-year, accounted for 43.71% of the company's total.
At the same time, Zijin Mining regards this year as the "Project Construction Year" and comprehensively accelerates the transformation from resource advantages to economic benefits. A number of strategic growth points are still advancing steadily under the background of the epidemic, especially Kakula Copper Mine and Serbia Zijin Copper , Ruiji Tapeiji Copper and Gold Mine, Heilongjiang Tongshan Mine Mining Project, and Longnan Zijin Liba Gold Mine Reconstruction and Expansion Project have achieved more than expected progress, providing a strong guarantee for the company's three-year output target to advance steadily.
According to the resolution of the board of directors announced on the same day, the company has received new benefits in Colombia and Serbia. Among them, the company will start the technical renovation project of Colombia's Buritica gold mine in September this year, which is expected to be completed in the second half of 2021. After reaching production capacity, Buritikar's production capacity will increase from 3,000 tons/day to 4,000 tons/day, and the annual gold production will increase from 7.8 tons to 9.1 tons. Serbia Zijin Copper has newly discovered the ZB gold mine, with 18 tons of gold metal with an average grade of 1.68 g/ton, 51 tons of silver metal with a grade of 5.11 g/ton, and great potential for subsequent reserves increase. It is planned to be completed by the end of June 2022. It is put into production. After reaching full capacity, the annual output of gold concentrate contains 2.23 tons of gold and 3.8 tons of associated silver metal.
In addition, what is even more anticipated is the company’s two major contrarian mergers and acquisitions in June this year: the company achieved a shareholding in Tibet Julong Copper for 3.883 billion yuan, and led the development of the largest proven porphyry copper mine in China. The annual output of copper is 263,000 tons. Acquiring 100% equity of Guyana Jintian Company for 1.699 billion yuan, the average annual gold production will contribute more than 4 tons.
