SHANGHAI, Apr. 12 (SMM) - Tongling Nonferrous Metals Group returned to profitability in 2016 after cutting cost and increasing efficiency, according to its annual report. Copper products remained major contributor of its income.
The company plans to increase its copper concentrate output in 2017 to improve self-sufficiency ratio, but will slash cathode copper output.
Its business revenue was 86.674 billion yuan in 2016, down 0.26% on a yearly basis. Profit belonging to parent company’s shareholders was 180 million yuan, compared to 666 million yuan losses in 2015. Its income from copper totaled 75.93 billion yuan, which accounted for 87.60% of business revenue.
Copper Product Output & Sales
Some indicators fell on a yearly basis because of lower ore grade, cut in copper cathode production and weakening market, according to the company’s annual report. Its copper concentrate output was 47,800 tonnes, down 1.26% on a yearly basis. Copper cathode production fell 1.31% year-on-year to 1.30 million tonnes. Copper semis output was 315,000 tonnes, up 1.72% year-on-year.
Total sales of copper cathode were 1.30 million tonnes, and inventories declined 31.13% year-on-year because sales were higher than production.
Chinese companies have expanded investment in overseas copper mines over recent years due to domestic copper resources tightness. Tongling Nonferrous Metals Group said it looks to increasing self-sufficiency ratio of copper resources, so as to enhance competitiveness.
The company plans to increase copper concentrate output to 49,250 tonnes in 2017, while slashing copper cathode output to 1.21 million tonnes. Silver output in copper concentrate will be 20,686 kg, with 381,300 tonnes of copper semis.
Tongling Nonferrous Metals Group will accelerate copper smelting technology upgrade and furnace transformation in 2017, and push copper anode mud recycling and nonferrous metals recycling projects. Meanwhile, the first phase of the 20,000-tpy precise energy storage ultra thin electronics copper foil project will be completed and come online this year. The Shaxi copper mine is expected to reach operation July 1, 2017.
Potential Risks
The company may face risks which are related to the market, safety and environmental protection, and product price volatility. It will thus enhance inventory management, put emphasis on safety and environmental protection and hedge operation of copper which will help reduce risk from price volatility.
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