As we thoroughly study and implement the guiding principles of the 19th CPC National Congress, here comes the New Year's Day of 2018. This would be the first year of a new era. On behalf of Zijin Mining Group Co., Ltd., I hereby extend my most sincere greetings to Zijin’s more than 20,000 hardworking employees worldwide, and my heartfelt appreciation to all the investors, comrades at all levels, community, collaborators and employees’ families, those who have given care, support and help to Zijin Mining.
In 2017, the new leadership of the Company convened a Strategic Implementation Conference at the site of the Gutian Congress and formulated the "13th Five-Year Plan and the 2030 Long-term Plan (Outline)", establishing that innovation is the key to Zijin Mining's core competitiveness and enhancing the company’s self-confidence in strategy, ability and culture concerning internationalization. Under a favorable market environment, Zijin has achieved significant results in its production and operation.
In Zijin ,gold sector continues to lead the domestic industry, meanwhile copper and zinc has created a new growth pole for the company.According to 2016 auditied figure,the total copper resources attributable to the company have exceeded 30 million tonnes, ranking first in China and forefront around the world. Production of mined copper and mined zinc takes the leading position in domestic market, while production of mined copper has increased by over 30% compared to 2016. Zijin completed an A-share non-public placement and raised a total of RMB4.635 billion, where the employee stock ownership plan contributes around RMB400 million, optimizing corporate asset structure.
In 2017, the internationalization of Zijin has entered a phase of harvest, with overseas gold output contribution exceeding 50% and profitability reaching over 30%. The Kolwezi copper mine located in DR Congo has begun operation one year ahead of schedule with a substantial saving on construction investment and it is expected to become an important profit growth point for Zijin. Significant breakthroughs have been made in the continuous exploration in the Kamoa-Kakula copper mine in DR Congo where large and thick ore belts with high mineral grades are newly discovered. The average grade is 2.72%, of which, more than 7 million tones bearing a grade of more than 6%.This high grade mine has become high-profile in the industry as it is the largest copper mine in Africa and the fifth largest copper mine in the world. The first-phase mining system of the mine has started construction and it will be of great importance to the development of Zijin Mining, as well asthe global copper industry.
In the year of 2017, Zijin held the fifth Science and Technology Conference, formulating the Outline of Science and Technology Work Plan, commending both achievements and personnel in science since the 4thconference, and inspiring the innovative enthusiasm of scientists. China's first set of heat pressure pre-oxidized equipment developed by Zijin had put into commercial production. It's an International leading level technology, which fills the gaps in effective recovery of refractory gold ores in Chinese gold industry. Last year, Zijin Mining Group, Guizhou Zijin and Shanxi Zijin are awarded as High and New Technology Enterprises, representing Zijin's scientific and technological level achieved further progress. Zijin pays great attention on environmental protection and staff’s safety, and released plans as Green Mines Developing Project, and Staff's Health & Safety Work Plan, holding on-site safety production meeting in Ashele. Zijin has made obvious improvement in safety and environmental protection, scientific management and standardized operation.
We have full confidence and expectation in gold and non-ferrous industry in the coming year. With years of adjustments in mining market, starting from the second half of 2016, due to the better-than-expected economic growth in China and other countries, the global economy recovers continuously. In addition, with China's supply-side reform, environmental inspection, the banning policy of mining exploitation within the nature reserves, demand growth, as well as the temporary shortage of market supply, the mining market rebounded so as the metal prices rose in general. Mining companies ushered in a rare opportunity, corporate profits generally increased substantially or turned a profit.
The Central Economic Work Conference took ‘seeking improvement in stability’ as the basic principle of country’s governance. The supply-side structural reform continued to generate power, the environmental governance strengthened continuously, large numbers of the polluting enterprises and enterprises with insufficient licenses were shut down.
Years of sluggish mining market caused insufficient production, and lower grade of old mines and the increased difficulty of exploitation, the new mines’ cost increased.
The above factors bring the upward shift in mineral products' cost, which have intensified the contradiction between supply and demand. Most of the prices of mineral products will still fluctuate at the current higher prices and some may continue to rise. Despite the potential in growth, only limited space for growth in China's infrastructure construction, and the existence of downside risks in the real estate industry, all of which are closely related to the demand of basic metals and that brings greater uncertainty to the price of metals.
As the significant change of China's national conditions, the traditional industries of mining changes. To achieve the unity of mining and ecological protection is the basic requirement for the development of mining industry in this new era. Zijin must realize this new situation and strive to be the benchmark for green development. It will make environmental protection a brand of Zijin and contribute its due obligations and responsibilities for building green mines and beautiful China.
The year 2018 is the 40th anniversary of China's reform and opening up, which is also a crucial year for Zijin Mining to deepen its reform. Zijin will insist the reform and innovation as the driving force for the development of the enterprise and make every effort to promote the reform and innovation of corporate governance and management system.
Zijin should carry forward the "craftsmanship", create and form a system and cultural atmosphere for innovation, and foster numbers of innovative entrepreneurs and expert teams.
Zijin should strengthen the management of overseas projects and step up large overseas M&A projects that bring significant value-added effect to the company in line with the company's development strategy. Meanwhile, to create a highly qualified overseas talent team with Zijin’s characteristics.
Zijin should learn new technologies and new equipment, transform our old fashion concept and managerial style with new ideas and new technologies, and form a company-owned information technology R & D team to improve data collection standardization and information integration processing skill, and shorten the physical distance between Zijin's headquarters and each business unit, and improve management efficiency and reduce management costs.
It would be 15 years since Zijin listed on H-shares in Hong Kong and A-shares in Shanghai. As a public company, creating value for the community and shareholders is Zijin’s responsibility and obligation. Well organization, full devotion, and excellent operational performance are the reflection of the company’s efforts.
Zijin must insist to the mine-led principle, strengthen the core status of mines, with a main portfolio of gold and copper (zinc), also pay attention to other important minerals. Zijin should attach importance to the synergies of the smelting processing industry, and the coordinated development among mining, finance, construction, trade and logistics. Zijin must earnestly listen to the voice from the market, foster the ability of sustainable development, and strive to present a good corporate image, and ensure every corporate information disclosure is timely, objective and transparent.
In this new era, we shall seize new opportunities, dare to implement new initiatives, and achieve a new leap forward. Let us work together to build Zijin into a high-tech, efficient and large international mining Group, and to strive to achieve the Zijin dream and China Mining Dream.