Earnings at the mainland miner double as the metal price soars and production volumes increase
Zijin Mining Group, China's second-largest gold miner, said its first-half profit doubled as gold prices hovered at almost 26-year highs and production volume increased.
The Hong Kong-listed company said yesterday its net profit rose to 662 million yuan for the first six months this year from 331 million yuan last year. Turnover jumped to 3.95 billion yuan, from 1.07 billion yuan.
'Zijin's earnings growth will be driven by the soaring gold prices and the increase in production volume as production cost is relatively stable,' JP Morgan analyst Zhang Feng said.
Zijin has benefited from a 27 per cent rise in global gold prices this year as the softening US dollar fuelled demand for precious metals which were viewed by investors as an alternative to the greenback.
The US dollar has fallen 8.7 per cent against the euro so far this year and fell to a two-month low last week on speculation that the Federal Reserve will take a breather on interest-rate increases this year.
Combined net profit for Chinese gold producers jumped 53 per cent to 2.47 billion yuan in the first half after a 6.3 per cent increase in production to 106 tonnes, the Securities News said yesterday, citing the China Gold Association.