Zijin Mining not optimistic on gold and copper prices

Zijin Mining, the mainland’s largest gold processor, will counter falling gold and base metal prices by boosting output, improving downstream operations’ efficiency and seeking opportunistic acquisitions.

The president of the Fujian-based miner, Wang Jianhua, said  yesterday he was not optimistic that non-ferrous metal prices would see any significant rise in the second half of the year, given relatively weak global demand.  “We will focus our effort in the second half on technological and internal management improvement, as well as developing new large-scale projects,” he said.

The company’s Zijinshan mine, which accounted for 32 per cent of output from its own mines, saw output fall 4.2 per cent year on year in the first half. Compared with output in the first-half of 2012, it was down 38 per cent because the metal content of the mine is fast declining as easy-to-mine resources are depleting, although a layer of copper ore lies beneath the gold belt.

“In the next few years, Zijinshan will undergo a transitory period towards copper mining, but the profitability of copper does not necessarily have to be less than that of gold,” Wang said. “The key is a good understanding of the resources.”

On Sunday night Zijin posted a 1 per cent year-on-year rise in first-half net profit to 1.1 billion yuan (HK$1.38 billion).

Excluding investment income, assets impairments and gains and losses on the value of its assets, underlying pre-tax profit dropped 22.9 per cent year on year to 1.79 billion yuan.