Mine acquisitions lift Hunan Nonferrous

Earnings climb 18pc on greater output and higher prices for metals

Hunan Nonferrous Metals Corp, China's largest integrated producer of nonferrous metals excluding aluminium, posted an 18 per cent gain in net profit as it acquired more mines to boost production coupled with the rise of metal prices.

Net profit surged to 300.1 million yuan in the first six months of this year from 254.4 million yuan in the same period last year ago. Sales leapt to 8.09 billion yuan from 3.68 billion yuan.

Hunan Nonferrous has benefited from rising global prices of metals. Average zinc prices on the London Metal Exchange more than doubled in the first half from a year ago as supply fell short of demand.

'We anticipate continued high pricing for non-ferrous metals due to surging local and global demand while strict regulations limit new mine development,' a Deutsche Bank research report said. 'We expect [Hunan Nonferrous] to steadily improve its profit margins by acquiring more mineral resources.'

The company has made six acquisitions in China and overseas since its Hong Kong's initial public offering in March from which it raised HK$2 billion.