Zijin Mining Group
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Zijin Mining raises income 81.5pc

Carol Chan

Zijin Mining Group, a mainland gold miner, cut its gold and copper production target for this year after reporting an 81.5 per cent surge in first-half profit.

Net profit for the six months ended June rose to 1.2 billion yuan from 662 million yuan a year earlier. Sales increased 69 per cent to 6.67 billion yuan. Chairman Chen Jinghe said the earnings growth was mainly driven by rising gold and copper prices and increased output.

Analysts said profit was also helped by a 68.6 million yuan hedging gain, compared with a net loss of 89 million yuan a year ago.

Zijin's average gold selling price rose 8 per cent to 163.17 yuan per gram in the first half while its copper selling price surged 21.8 per cent to 46,236 yuan per tonne.

The company produced 5.3 per cent more gold to 22.27 tonnes in the first half and 14.14 per cent more copper to 21,482 tonnes.

Gold made up 50.2 per cent of its first-half net profit and copper 30.1 per cent.

Zijin cut its gold production target by 7.3 per cent to 51,000 tonnes this year after the four-month closure of the Guizhou Shuiyindong mine, Mr Chen said.

It also reduced its copper production target by 14.5 per cent to 47,000 tonnes as production was more difficult than expected at its Derli mine in Qinghai, located 4,300 metres above sea level, he said.

The company has set aside one billion yuan for capital spending in the second half excluding any possible acquisitions, taking the full-year total to at least four billion yuan.

Zijin in February led a consortium to take over London-listed Monterrico Metals, owner of the Rio Blanco copper and molybdenum mines in Peru in a deal worth #94.6 million (HK$1.47 billion).

It also bought Avocet Mining's 75 per cent stake in JV Zeravshan, which has gold operations in Tajikistan, for US$55.1 million in June.