On August 25, Zijin Mining announced that in the first half of the year, the main mineral production capacity steadily increased and reached a new high, achieving 490,000 tons of mineral copper, 32 tons of mineral gold, and 240,000 tons of mineral zinc (lead), an increase of 14.2%, 19.6%, and 5% respectively. Achieved revenue of 150.3 billion yuan, an increase of 13.5%, affected by the overall setback in metal prices and the rise in costs accumulated during the new coronavirus outbreak, to achieve a net profit of 10.3 billion yuan, a year-on-year decline, but an increase of 39%.
Steady progress was made in the strategy of continuous increase in output
As a capital-intensive and politically intensive industry, in recent years, the global copper production growth has been difficult due to multiple factors such as geopolitics, community conflicts, declining grades, and the lack of newly discovered large-scale mines in the world, and Zijin Mining has become a prominent contributor to the increase in global copper production in recent years.
In the first half of the year, the company continued to lead the growth rate of mineral copper production, three world-class copper mines in the Congo (DRC) Kamoa I and II joint expansion completed ahead of schedule and put into operation effective, Serbia Pegi copper gold deposit lower belt development progress steadily, Xizang Zhulong Copper Mine phase II reconstruction and expansion progress in an orderly way. The company's annual mineral copper production will more than double in 2020, exceeding the 950,000 tons production plan formulated at the beginning of the year, and is expected to become the first domestic enterprise with a output of 1 million tons, and the global ranking will be further advanced.
In terms of gold sector, the Surinam Rosbel gold mine delivered this year achieved 3.5 tons of gold in half a year, becoming another major gold producer of the company. In addition, Tajikistan's Taro gold mine was completed by pressure oxidation test, Australia's NORTON Gold Field Binduli mining and mining line was opened and put into operation, Shanxi Zijin Hewan porphyry gold mine and a number of technological transformation or new projects are accelerating. The gold sector is gradually releasing new vitality.
In terms of lithium plate, the decision to layout the new energy and new materials industry has been only two years, and the "two lakes and one mine" acquired by Zijin Mining has produced 1293 tons of equivalent lithium carbonate in the first half of the year. At present, Hunan Xiangyuan hard rock lithium mine phase I 300,000 tons of mining and beneficiation system resumed production, phase II 5 million tons of mining and beneficiation and smelting system orderly carried out, Argentina 3Q lithium salt Lake phase I output crude lithium carbonate and rush to put into production at the end of the year, Tibet Lago Co lithium salt Lake rapid progress. The rapid production of lithium will add a key profit segment to the company.
Growth momentum shift to improve quality control
In the first half of this year, global geopolitical risks intensified, economic recovery was less than expected, copper, zinc and other metal prices as a whole suffered setbacks, and global non-ferrous metal mining companies generally faced cost control and growth pressure.
However, Chen Jinghe, chairman of Zijin Mining, has long warned that the company's high growth in recent years mainly relies on a number of major investment projects to put into operation and market prices to rise, and the extensive growth model has not fundamentally changed, and the substantial increase in efficiency has covered up the problems of extensive management and substantial increase in costs of a considerable number of enterprises.
To this end, this year, Zijin Mining has clarified the main line of "improving quality, controlling costs and increasing benefits", focusing on the shift of growth momentum, seizing the main aspects of the contradiction of "overseas project control and efficiency", and strengthening the construction of the overseas sector operation management system. In the first half of this year, the Belgrade International operation headquarters has been initially built. From the manpower allocation, construction investment, production system optimization, project unit price, logistics procurement and other aspects of the "combination", vigorously optimize and compress, comprehensively improve production and operation efficiency, enhance global competitiveness.
From the sequential point of view, in the first half of this year, Zijin Mining increased its net profit to the mother by 2.9 billion yuan compared with the second half of last year, showing that the company's capital control efficiency is beginning to show, and the high costs accumulated during the special period of the new coronavirus epidemic are gradually digested.
In addition, scientific and technological innovation is the key to capital control and efficiency, and in the first half of the year, Zijin Mining continued to make breakthroughs in a number of major key technologies. The large-scale and efficient mining of deep deposits has made important progress, and the green mining technology system of plateau mines has been preliminarily established. The four major caving mining projects have been steadily advanced, the lithium yield of "adsorption + membrane" in Laguoco Lithium Salt Lake has significantly increased, and the lithium extraction process of Daoxian lithium mica concentrate and the construction of Changsha new energy and new materials research and development base have been actively promoted.
The mining industry is optimistic about the long-term layout of the new cycle
In the second half of the year, with the release of the main metal production capacity, the company's production costs will further decline, coupled with the upward momentum of metal prices, is expected to bring profit improvement.
In terms of copper, despite the lack of demand in China and the slowdown in growth, copper prices have remained at a relatively high level, indicating that in the context of global energy transition, the application demand for copper in the field of new energy has gradually opened, and the price is still supported in the medium and long term. In terms of gold, the world situation is unstable, the global inflation is high, the currency is flooding, the gold allocation value is highlighted again, and the gold price is expected to be high and volatile; In terms of lithium, the global penetration rate of new energy vehicles has increased, energy storage and intelligent devices have developed rapidly, and the price is likely to rise further.
From the perspective of the industry, the mining industry is entering a new period of opportunity: mineral resource security has risen as a national strategy, relevant policies to encourage the exploration and development of mineral resources have been gradually introduced, and the energy revolution has brought new growth space for strategic metal minerals.
Mining enterprises have also ushered in more development opportunities, which has boosted the stable and good business performance of enterprises. In August, the company entered the Tibet Juno copper mine, adding 1.72 million tons of equity copper resources, which will become the company's sixth copper mine with an annual production capacity of 100,000 tons in the future. The company's rapid rise in Tibet plate and strategic layout of increasing investment in domestic and surrounding countries are bearing fruit.
