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Zijin continues steep growth curve including Cukaru Peki full ops license; Qulong ramp up and Neo Lithium buy

On October 15, China’s Zijin Mining released its Q3 2021 report, which detailed a net profit of CNY11.3 billion for the first nine months of the year, the first time it has broken through the CNY10 billion mark. This equates to some $1.76 billion, meaning it is rapidly positioning itself among the global Tier 1 miners. The increase reflects major increases in both the volume of and price for its major mineral products, plus in addition it has a number of new world-class mining projects being put into operation.

Revenue stood at CNY169 billion for the first three quarters of the year, a year-on-year increase of 30%, and close to the level for the whole year of 2020; total profit was CNY18.4 billion, a year-on-year increase of 149%; net profit was CNY11.3 billion, a year-on-year increase of 147%; operating cash flow was CNY17.8 billion, a year-on-year increase of 80%. In the third quarter alone, the company realised revenue of CNY59.1 billion, total profit of CNY7 billion and net profit of CNY4.7 billion.

Main product outputs for the first three quarters were 34.5 t of gold (over 1.2 Moz), copper 408,000 t and zinc 285,000 t, all additionally boosted by high metal prices. High iron ore prices also benefited at Mengku iron mine in Fuyun County, Xinjiang. The share of overseas mines contribution versus Chinese mines is also increasing – in July 2021 as an example, overseas mines accounted for 68% of gold output accounted for 68%, and for copper output overseas mines accounted for 64%, overseas mines accounted for 57% net production and operating profit accounted for 57% for the month, the first time non-Chinese mines overtook Chinese mines for these figures.

In copper the company formally put into production in the first half of 2021 the Kakula copper mine in DRC (Ivanhoe Mines 39.6%, Zijin Mining Group 39.6%) and recently put into operation the Cukaru Peki copper and gold underground mine in Serbia. These mines are already making a contribution to its results and as capacity continues to increase, the world-class projects will be an important factor in the company’s full-year growth. “After the the first phase of Kakula copper mine was put into operation in May this year, the production capacity climbed rapidly. With the optimisation of mineral processing, capacity is expected to be further released, and the 2021 guidance target for producing copper in concentrate has been raised to 85-95,000 t.”

In June 2021 in Serbia, Cukaru Peki entered the trial production stage and on October 12, all the facilities of the mine received the final operating license, to achieve formal commissioning. The first part of the project involves mining an ultra-high grade orebody. It is expected to produce 50,000 t of copper and 3 t of gold in 2021. At the Serbia Zijin open pit copper mines, the MS mine was operating at 40,000 t/d ore throughput after a new concentrator completed commissioning phase with material. After the completion of the project, the annual processing capacity of MS mine will add 22,000 t of copper and 0.8 t of gold. The construction of a 40,000 t/d concentrator over at VK copper mine is also progressing smoothly and is scheduled to be completed and put into operation in the first quarter of 2022.

In China at the end of September, the construction of the first phase of mining and processing at the Qulong copper and polymetallic mine in Tibet, China’s largest porphyry copper mine, and the world’s highest major mine, is progressing smoothly. The infrastructure project including the thyssenkrupp conveyor with Siemens gearless drive and the main concentrator workshop are nearly completed, and are expected to be put into operation by the year end.

Lastly, on October 10, Zijin Mining announced that it will acquire all of the outstanding shares of Canada-based Neo Lithium Corp for C$960 million. Situated in the “Lithium Triangle” in northwestern Argentina, the Tres Quebradas Salar lithium project, also known as the 3Q project, is the primary asset of Neo Lithium. In terms of resources, the project has 7.565 Mt of contained lithium carbonate, with an average lithium concentration of 621 mg/L. This includes 1.68 Mt of high-grade resources with an average concentration of 926 mg/L.

 

Source: International Mining