Power rationing affected the production of the Mirador copper mine. The net profit of China Railway Construction Tongguan, a subsidiary of Tongling Nonferrous Metals, decreased by 16.9% YoY in 2024.

The performance report for 2024 released by Tongling Nonferrous Metals Group on March 29 for its subsidiary China Railway Construction Tongguan shows that the subsidiary's total operating revenue for 2024 was 8.027 billion yuan, up 0.14% YoY; operating profit was 2.432 billion yuan, down 15.15% YoY; total profit was 2.435 billion yuan, down 15.06% YoY; and net profit was 1.487 billion yuan, down 16.9% YoY.

(Note: The main reason for the decline in operating profit, total profit, and net profit of China Railway Construction Tongguan in 2024 was the power rationing policy in Ecuador in Q4 2024, which restricted the normal production and operation of the Mirador copper mine.)

The announcement from Tongling Nonferrous Metals Group shows that China Railway Construction Tongguan Investment Co., Ltd. is mainly engaged in the mining, beneficiation, and sales of copper metal, with copper concentrates as its main product. Currently, Tongling Nonferrous Metals Group Co., Ltd. holds 70% of the shares of China Railway Construction Tongguan, and China Railway Construction International Investment Co., Ltd. holds 30% of the shares. China Railway Construction Tongguan is an important subsidiary of the company and also an associate enterprise of China Railway Construction Corporation Limited. The company plans to disclose its 2024 annual report and the audited performance of China Railway Construction Tongguan for 2024 on April 23, 2025. China Railway Construction Corporation Limited plans to disclose its 2024 annual report on March 29, 2025, and disclose its indirect share of 30% of the net profit and loss and other comprehensive income realized by China Railway Construction Tongguan in 2024 (Note: This data is unaudited).

According to a previous announcement from Tongling Nonferrous Metals Group, in 2023, China Railway Construction Tongguan produced 126,500 mt of copper in copper concentrates. As of December 31, 2023, the total assets of China Railway Construction Tongguan were 185.877443 billion yuan, and the net assets were 93.115247 billion yuan; in 2023, the operating revenue was 80.164924 billion yuan, and the net profit was 17.896421 billion yuan (the above financial data has been audited). From January to October 2024, China Railway Construction Tongguan actually produced 101,900 mt of copper in copper concentrates.

Tongling Nonferrous Metals Group announced on the evening of March 5 that as of February 28, 2025, the company had repurchased 23,578,900 shares through a special securities account for share repurchase by centralized bidding, accounting for 0.18% of the company's total shares.

Huayuan Securities previously mentioned the Mirador copper mine in its research report on Tongling Nonferrous Metals Group, stating that the injection of Mirador and the steady progress of the second phase will release performance. The company owns six mines in China, with a total copper reserve of 1.78 million mt, gold reserve of 95 mt, and silver reserve of 1,090 mt, with a total mining scale of 9.47 million mt. The average copper production from 2014 to 2017 was 47,500 mt, and with the full production of the Shaxi copper mine in 2018, copper production increased to over 50,000 mt, with an average production of 54,000 mt from 2018 to 2022, and stable production of domestic ore. In August 2023, the company completed the acquisition of 70% of the shares of China Railway Construction Tongguan, whose core asset is the Mirador copper mine. The Mirador project has a copper resource of 7.08 million mt, gold resource of 181 mt, and silver resource of 1,108 mt. The first phase of the project reached full production in 2021, with an annual production of about 90,000 mt of copper. In 2022, the actual production and sales of copper concentrates exceeded 120,000 mt, exceeding the design value by more than 30%. The estimated average production cost from 2020 to 2022 was 26,400 yuan/mt, the full cost was 43,000 yuan/mt, and the net profit per ton was 14,000 yuan/mt. The second phase of the project is expected to be completed and put into production in June 2025, and after reaching full production, it is expected to produce about 200,000 mt of copper annually (combined with the first phase). Based on the current net profit of 14,000 yuan/mt, it is estimated that Mirador is expected to achieve a net profit of 2.8 billion yuan after reaching full production. Risk warning. Litigation risk of the net equity gold of the subsidiary of China Railway Construction Tongguan; risk of metal prices falling more than expected; safety production risk; geopolitical risk.