This year's fall in the prices of copper and gold is expected to cut into profits at Jiangxi Copper, spurring the company to boost production and tighten costs. Chairman and managing director He Changming said the Bank of China's decision in February to lower the gold price by 7,500 yuan (about HK$6,978) a kilogram would knock off 30 million yuan from the bottom line this year. But he said gold sales accounted for only 17 per cent of turnover and the H share had set aside 15 million yuan from internal sources to cover the shortfall. 'We'll make profits this year - it's guaranteed,' he said. Mr He said the spot price for copper fell to 85 US cents a pound in the first quarter compared with US$1.05 in the same period last year. The price of copper dropped further this month, he said, and demand had shrunk dramatically in Southeast Asia, South Korea and the mainland - the company's main markets. The company aimed to produce 150,000 tonnes of copper this year, against 137,000 tonnes last year. The firm had cut costs, including sacking 1,000 to 2,000 workers, or 3.5 to 7 per cent of its workforce, this year. Management costs were reduced 47 per cent in the first quarter, and Mr He said he hoped to cut operating costs by 3 to 5 per cent this year. He said the company would spend 300 million yuan to upgrade a refinery in Guixi to boost production capacity to 150,000 tonnes of copper a year. Mr He said former executive director Fang Dacheng, who is under investigation for alleged embezzlement, had not been involved in board decisions nor had he handled any of the firm's money. Fang, also president of the China National Non-Ferrous Metals Import and Export Corp, has resigned from all his posts and is under house arrest. Mr He said Fang was representing the CNNC group as a shareholder on the board.