SHANGHAI, Apr. 9 (SMM) – Western Mining reported a loss of RMB 127 million last year due to the depressed nonferrous metals market suffering from the global economic slowdown. The company reported only RMB 1.98 billion in operating revenue last year, down 7%, equating to a 111% decline in profits, leaving net profit distributable to its parent company down 95% to RMB 43 million.
Western Mining produced 52,833 mt (lead content) of lead concentrate in 2012, 100.27% of its planned output, and 99.91% of its targeted 102,607 kg output in its silver by-product. Crude and refined lead output was 55,638 mt and 45,700 mt, respectively, 74.54% and 66.49% of planned output. Financing problems at its Xiyu subsidiary in Qinghai created sourcing difficulties and led to a shortfall in crude lead output, directly contributing to the shortfall in achieving the company’s refined lead production goal.
Western Mining also called attention to the continual decline in prices of and consequently also the output of its major products in 2012, as well as to the lower TC it commanded on its smelting products. The dramatic decline in profits from minerals was a direct consequence of falling metals prices. Statistics show that the average price of lead concentrate fell 7% last year, while that of lead ingot and crude lead also slipped 7% and 8%. Meanwhile, rising raw material prices drove up production costs, squeezing margins into loss territory.