◎ Li Ping, Li Xi
Mining giant Zijin Mining's performance in the first quarter of 2024 soared again!
Image source: Wind
On April 22, Zijin Mining released its first quarter report, showing that the company's mineral copper and mineral gold output were 263,000 tons and 16.8 tons, respectively, and the net profit attributable to the parent company increased by 15% year-on-year to 6.26 billion yuan, refreshing the highest level of net profit attributable to the parent company in a single quarter since the third quarter of 2022!
Under the continuous management improvement, the company's rising cost has been effectively curbed, the overall operating costs, especially the operating costs of overseas projects, have decreased significantly month-on-month, and the unit sales costs of mineral gold concentrate and copper concentrate have decreased by 14% and 13% quarter-on-quarter respectively, providing strong endogenous support for performance growth.
Since the first quarter, the company's share price has repeatedly broken through record highs, and the total market value has exceeded 500 billion yuan at the peak.
A multi-pronged approach has effectively curbed the rising trend of costs
The reporter learned that in recent years, with the overall acceleration of the internationalization of Zijin Mining, the increase in the scope of management, and the sharp increase in pressure, especially in the special period of the epidemic, the pursuit of efficiency first, so that a considerable part of the profits have been eaten up by costs.
"Low-cost competitive advantage is the company's 'heirloom' and a must for us to build Zijin's global competitiveness, and we must resolutely curb the rising trend of costs. Chen Jinghe, chairman of Zijin Mining, said.
To this end, Zijin Mining has set up an international business committee to form an "integrated" whole-process cost control system for overseas construction, logistics, procurement, manpower and engineering technology, and improve the level of international operation and management.
Scientific and technological innovation is the core element of cost control. In order to accelerate the creation of this global competitive comparative advantage, Zijin Mining has recently established the "Central Research Institute" to coordinate and direct the company's R&D resources, while focusing on solving key and major technical problems related to sustainable development, and solving a number of practical problems restricting production for the front line, which has played an immediate role in reducing costs and increasing efficiency. For example, the Rosbell Gold Mine strengthened the refined process control, and the beneficiation recovery rate reached 97% in the first quarter, which was 15% more than planned, and the delivery has become the core strength of the company's overseas gold sector for more than a year.
Image source: Zijin Mining
The construction investment field is also the focus of cost control, the company has played a set of cost reduction combination punches by strengthening the optimization and pre-settlement of engineering plans, organizing the renegotiation of project and material unit prices, and implementing some project self-operation. Taking pre-settlement as an example, in the first quarter of this year, Zijin Mining coordinated a number of overseas ownership enterprises to negotiate the price of mining contracts, which is expected to reduce costs by 63.4 million yuan.
The person in charge of finance of Zijin Mining told reporters that in the first quarter, the company's rising costs, especially overseas costs, have been effectively curbed, and the unit prices of inventory, projects and materials have decreased significantly.
Take advantage of the momentum and continue to increase the volume of the "rising channel"
In 2023, under the difficult growth of the global mining industry, Zijin Mining's performance grew against the trend and earned 21.1 billion yuan. The company's output of gold, copper and other main mineral products continued to grow rapidly, with the annual output of mineral copper reaching 1.01 million tons, a year-on-year increase of 11%, becoming the only enterprise in China with a mineral copper output of more than one million, and achieving a mineral gold output of 67.7 tons, a year-on-year increase of 20%, equivalent to nearly a quarter of the domestic mineral gold output in 2023.
Entering 2024, the continued positive impact of copper and gold will bring blessings to Zijin Mining.
Since the first quarter, Zijin Mining's long-term main business of copper and gold has continued to usher in a positive superposition. In terms of copper, the price continued to rise, and the main Shanghai copper contract recently stood at a high of 80,170 yuan/ton, a new high since 2006. In terms of gold, there is great uncertainty in global geopolitics, with record gold purchases by emerging market central banks and increased demand for safe-haven assets, and gold prices continue to hit new highs.
"Under the favorable conditions of the hot market, we must take advantage of the momentum, do everything possible to increase the volume, and accurately grasp the time and situation is also an important aspect to test our global operation capabilities. Chen Jinghe said.
According to public information, under the background of the downward revision of the 2024 output plan of many leading mining companies in the world, Zijin Mining plans to increase the output of its main mineral products by a significant amount, of which mineral copper and mineral gold are planned to increase by 10% and 8% year-on-year respectively.
The increase in production of the company's core copper mines, Kamoa Copper Mine in the Democratic Republic of the Congo, Julong Copper Mine in Tibet, and Paigi Copper-Gold Mine in Serbia, will provide strong support for the annual output target. For example, Julong Copper Mine produced 42,000 tons of copper in the first quarter of the year, and is actively promoting the second phase of the expansion and reconstruction project. (To learn about some copper mine related information, you can click "Help resource security! Inventory of important copper mine projects, who do you pick?")
In terms of gold, South America has become the region with the largest and fastest growth in Zijin Mining's gold production. In the first quarter of this year, Rosbel Gold mined 2 tons of gold, and the project will achieve an annual output of 10 tons of gold after the technical transformation is put into production, and Buritika Gold will produce 2.2 tons of gold, and this year plans to mine 8.6 tons of gold.
Living Area of Rosbel Gold Mine, Suriname Image Credit: Zijin Mining
Chen Jinghe, chairman of Zijin Mining, said that in the new stage of development and a favorable market environment, the company will pay more attention to endogenous growth, focus on overseas, take information digitization as a tool, and take cost control as the starting point to cultivate new quality productivity with Zijin characteristics, so as to maximize economic and social benefits, and strive to transform existing abundant resources into economic benefits;