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Zijin Mining's FY Mine-Produced Copper Output Expected at 130,000 Tonnes

iconAug 25, 2013 13:53
Source:SMM
SMM expects Zijin Mining’s total mine-produced copper output to hit 130,000 tonnes this year, surpassing the plan set early this year. Its refined copper output is expected to be flat with the plan.

SHANGHAI, Aug. 24 (SMM) – Zijin Mining Group Co. revealed in its interim report that it produced 61,700 tonnes of mine-produced copper in H1 this year, up 35.33% YoY, while its refined copper output jumped 148.12% from a year ago to 97,100 tonnes.  

SMM expects Zijin Mining’s total mine-produced copper output to hit 130,000 tonnes this year, surpassing the plan set early this year. Its refined copper output is expected to be flat with the plan.  
 
Zijin Mining set the 2013 fullyear targets for mine-produced copper and refined copper at 115,000 tonnes and 200,000 tonnes, respectively, in its 2012 financial report. The company produced 104,600 tonnes of mine-produced copper and 112,000 tonnes of refined copper in 2012. 
 
SMM believes the smooth transition from old mines to new ones will help stabilize the company’s copper concentrate output in the next three or four years. Although the weakening copper prices globally may cause it to reduce production, the Duobaoshan copper mining newly coming online will unlikely see production cut in the near term. 
 
As shown in the table below, mine-produced copper output from Qinghai Derni Copper Mine and Huichun Zijin fell, and production at Asele Copper held steady. Zijinshan and Duobaoshan copper mines ramped up production.

Major Mines of Zijin Mining

Mine Produced Copper H1 2013 (Mt)

YoY (%)

Derni Copper Mine

13,400

-5.7

Huichun Zijin

3,700

-20.73

Asele Copper

16,200

1.26

Zijinshan Copper Mine

14,100

119.98

Duobaoshan Copper Mine

11,400

1176.65

Source: Zijin Mining 2013 Midyear Report

Zijin Mining saw declining profit in H1, with net profit distributable to shareholders of the listed company down 53.95% YoY to RMB 1.098 billion. This was mainly caused by falling prices for commodities and elevated costs. SMM data showed that SMM #1 copper price fell from January’s RMB 57,525/mt to RMB 48,970/mt in late June, a decline of 14.87%, while the drop in copper concentrate prices also dragged down refined copper prices. 
 
As production costs of the Duobaoshan Copper Mine, the project newly starting production in Heilongjiang, are high, and Derni Copper Mine stepped up sideslope consolidation and treatment of low-grade ore, selling cost for Zijin Mining has risen to RMB 18,246/mt in H1, up from the RMB 12,984/mt over the same period last year.  
 
Overall, Zijin Mining’s margin from mine-produced copper slipped from 69.12% to 55.78% due to the higher costs and lower product prices. This was also reported by other listed companies in the nonferrous metals industry.
 
SMM will provide continuous coverage of other companies’ midyear reports.
Zijin Mining Group Co.

For queries, please contact Michael Jiang at michaeljiang@smm.cn

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