Metals News
Chihong Zn & Ge Company Annual Report: Resource Integration Raises Core Competitiveness
industry news
Mar 14,2011

SHANGHAI, Mar. 14 (SMM)--According to Chihong Zn & Ge Company’s annual report, the company has put heavy emphasis on resource integration in order to increase core competitiveness.

Availability of resources is becoming a key factor for enterprises since ease of supply is necessary for normal production, cost controls, profit generation, expansion and sustainable development, as well as long-term competitiveness.

Chihong Zn & Ge Company will mainly expand enterprise scale by expanding its core zinc production. The government regulation that requires lead and zinc enterprises applying to expand to demonstrate a self-sufficiency rate for raw materials of 30% is currently hampering capacity expansion at zinc smelters. Raw material self-sufficiency has become a new standard by which to judge a zinc smelters’ competiveness.

According to SMM statistics, Chihong Zn & Ge Company possesses a total zinc capacity of 180 kt/yr and a lead capacity of 100 kt/yr. Three new expansion projects are in progress, including a comprehensive utilization project for 60 kt/yr crude lead and 100 kt/yr zinc in Huize County, Yunnan province. Raw material supply for this new project will be provided internally from the Huize and Zhaotong lead and zinc mines, which also supply raw materials to the Qujing zinc smelter. Resource integration is still under way at the Zhaotong lead and zinc mine, as well as nearby areas, which will increase lead and zinc reserves and supplies for the company.

The new 140 kt/yr of zinc smelting project and 60 kt/yr of lead smelting project in Hulun Buir City, Inner Mongolia, will eventually source over 70% of raw materials from two mines in Inner Mongolia already owned by Chihong Zn & Ge.

Chihong Zn & Ge Company will also expand capacity at its 100 kt/yr of zinc smelting project in Zhaotong City, Yunnan province following the integration of the Zhaotong lead and zinc mine, which will significantly increase lead and zinc reserves.

In addition, Chihong Zn & Ge Company is involved in mergers and acquisitions with oversea companies, which should become an additional source of raw material supplies in the future. The company has set a target of 1 million mt in lead and zinc capacities, and to possess resource reserves of 10 million mt by the end of the 12th Five-Year Plan. Integrations of both internal and overseas resources will support core products expansion and reduce risks from resource shortages, helping keep the enterprise competitive in the long run.

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