New Year's Day in 2020 is the day when Zijin Mining's new senior management team performs. At this moment of a fresh start, I would like to represent Zijin Mining Group Co., Ltd. and express high respect and sincere greetings to over 30,000 employees, collaborators and community members! My sincere thanks and good wishes to governments, investors, and friends from all walks of life who have long cared and supported the development of Zijin Mining.
In the past three years, in the context of the relatively sluggish global economic and mining situation, the company has closely focused on the main line of "grasp reform, stabilize growth, and promote development". The reform work has been further advanced, and corporate governance and operational management have continued to improve; the company’s total asset, operating income and market value exceed 100 billion Yuan with strong profit and cash flow and major economic indicators entered the edge of the first echelon of the global metal mining industry; the output of mineral gold has steadily increased, the output of mineral copper and zinc have both increased significantly, and the capacity of smelting and processing operations has significantly improved; major breakthroughs in resource mergers and acquisitions and geological surveys; rapid growth in gold and copper resource reserves; copper resource reserves have entered the ranks of world-class mining companies; two rounds of additional issuance of A shares were successfully completed, brought direct financing of 12.6 billion Yuan, and the financial structure was significantly improved. The total market value increased from 65.6 billion Yuan at the end of 2016 to 110.1 billion Yuan, an increase of 67.8%. The value of the company was recognized by the market, and investors received good returns. The company's informatization construction has been fully accelerated, and the level of safety, environmental protection and ecological construction has continued to strengthen.
In the past three years, the company's international development has entered an accelerated period, overseas project capacity has continued to be released, and overseas gold and copper resource reserves and output have surpassed or will soon surpass those in China. The Kolwezi copper-cobalt mine in Democratic Republic of the Congo (DRC) was quickly completed and put into production, and became a benchmark for successful construction and operation of African mines. The takeover of Bor copper mine in Serbia went smoothly and quickly turned losses into profits, and the project's technological improvement and construction progressed steadily. Kamoa-Kakura copper mine in DRC and other major projects have made important progress; the newly acquired Timok copper-gold mine in Serbia and the pending completion of the Continental Gold Corporation of Colombia and other key projects have large resource reserves and high grades, which are important to strengthen the Group ’s resources reserves, mineral output and profit levels. The company has accumulated the basic conditions to compete with the international advanced mining companies on the same stage, and the new round of development characterized by internationalization has shown a good trend.
At present, the world is experiencing great changes not seen in a century, geopolitical hotspots are emerging one after another, unilateralism, protectionism, and resource nationalism are intensifying, and the slowdown in the growth rate of the world economy is a general trend. The huge ship named China is undergoing the baptism of wind and waves from the world. The country has entered an important period of transforming the development mode, optimizing the economic structure, and transforming the growth engine. Economic growth has shifted from high-speed growth to high-quality growth, however, the growth rate has slowed down. New technologies and new economies represented by mobile Internet information technology, digitization, intelligence and new energy are leading the new industrial revolution. Although the market demand for mineral resources has quietly changed, mining as a basic industry will remain relatively stable. As the main "grain" of energy and industrial and agricultural means of production, there has been no fundamental change and gold will enter into a mid-to-long-term bull market under economic uncertainty, copper supply and demand enters an era of tight balance, prices are returning to an upward trend, and the possibility of a zinc price downward correction is increasing. Scarce mineral raw materials related to new energy may become the favorite of the market.
In November last year, the company announced the three-year (2020-2022) major mineral production plan, which caused strong repercussions in the capital market. The company has many overseas projects with huge reserves of resources and the conditions to develop into world-class gold and copper mines. We hope that through the efforts of the next three years, while maintaining the steady growth of gold, we can achieve the goal of doubling the output of mineral copper, and bring explosive growth to the company
On the New Year’s eve, the board of directors, the board of supervisors, the management and the party committee of the company completed their general elections, and added fresh blood on the premise of overall stability. The members of the new management team are young and strong. Most of them have front-line work experience and overseas work experience. They have accumulated rich and successful experience in project construction and operation management. The new team is loyal, dedicated and willing to take responsibility for the company, and will become the strong leadership management team for the next three years. The company's management clearly proposed that the new three-year period should be based on the "deepening reform, leapfrog growth, and sustainable development" as the general work line, and take the three-year planning goals of 2020-2022 as the basic requirements. Work in several areas will be emphasized:
Make every effort to deepen reform and build the Group’s international management system. Persist in market-oriented and internationalized reforms, with a view to further achieving simplicity, standardization, and efficiency, and rationally divide responsibilities and power boundaries at all levels. Strengthen the management function with the business unit as the main body, and give play to the important role of the business unit in the daily operation and management of the Group Company. Under the unified deployment of the Group Company (shareholders), respect for the legal person status of the ownership enterprises and safeguard the role of the governing body of the board of directors, the board of supervisors and the management of the ownership enterprises. Strengthen the service awareness of the headquarter and avoid the inefficient management system such as layer-by-layer approval. Strive to basically achieve the transition from a domestic management system to the management system of a large multinational mining company within 2-3 years, and build a new management system that is compatible with international development.
Make every effort to achieve leapfrog growth, transform resource advantages into economic and social benefits, and significantly increase corporate value. All conditions must be created, all difficulties must be overcome, and major projects must be put into production, achieve production target and standards as soon as possible. At present, a large number of major project constructions have entered a critical stage, and 2020 will be determined as the “project construction year”. The achievement of these major construction projects will play a key role in achieving the company's goals in the next three years. Efforts will be made to ensure that the Timok copper (gold) mine in Serbia, Camoa-Kakura Copper Mine in DRC will start production in 2021 and reach production target in 2023; Complete the transaction of the Continental Gold Company as soon as possible to achieve the Colombia Buriticá Gold Mine's commissioning in April 2020; accelerate the development of the three open-air mines in the Bor Copper Mine in Serbia, an underground mine and the smelter's technological improvement and expansion; achieved the production standards of the Bisha zinc polymetallic mine in Eritrea, the Kolwezi copper mine in DRC, and the Duobaoshan copper mine in Heilongjiang Province. We must attach great importance to the production and operation of newly put into operation projects and mergers and acquisitions of new projects, strive to tap potential and increase efficiency, take effective measures to resolutely curb the rising trend of unit costs, and strive to achieve leapfrog growth of mine output and corporate benefits.
Make every effort to strengthen the sustainable development capabilities of enterprises and significantly increase the autonomy of productivity factors. First, adhere to the strategy of prioritizing mineral resources. Through increasing the degree of control and technological research and development, the total amount of valuable mineral resources and the proportion of available reserves will be further increased to drive the company's sustainable development with a strong resource reserve. The second is to adhere to laws and regulations, create a new business card for safety, environmental protection, and ecological construction, and strive to achieve the goal of "zero occupational deaths, zero occupational diseases, and zero environmental accidents." Third, adhere to the criteria of value creation and market, create a talent team that matches the development of the enterprise, strengthen the cultivation of high-quality industrial workers, and improve the platform for talent growth and development and the mechanism for selecting and training talent. The fourth is to adhere to the principles of equality, mutual trust, and win-win cooperation, achieve effective collaboration with related parties, build long-term "friendly and clear" collaborative relationships, and maintain the company's brand premium and long-term benefits. Fifth, comprehensively strengthen the supervision work, adhere to the high-pressure situation of punishing corruption, strengthen the effectiveness of supervision, increase the intensity of inspections, improve the accountability of supervision, innovate the supervision mechanism, and achieve precise supervision.
Make every effort to strengthen technology research and development and information system construction, and build a modern management and operation platform. Create an atmosphere of innovation, enhance the motivation for innovation, realize value creation through technological innovation, engineering management innovation, and share innovation results with value creators. The “Ore Flow Five Rings Reunification” project management innovation model formed during the development of the Zijinshan Gold and Copper Mine, guided by economic mining and system engineering, and oriented by ore flows, is used for geological prospecting, mining, beneficiation, smelting and environmental protection. The five main links coordinate research and innovation, and each link is interdependent, mutually promoting, and synergistic, which is attributed to the overall goal of maximizing economic and social benefits. It has played an important role in the company's domestic and foreign development process, and in the new development period it is necessary to further strengthen the promotion and application of innovation-driven and engineering management models. In accordance with the five-year development plan of the Group's informatization, it is necessary to increase the informatization work process and cultivate informatization research and work teams with independent capabilities; promote the in-depth integration of informatization and production operation management, realize digitalization and automated management of mines, and promote enterprises transformation and management upgrade, using information to drive the standardization and modularization of enterprise management, production operations, construction and technical systems.
Make every effort to promote efficient coordination of the governance system and strengthen the construction of corporate culture. It is necessary to establish and improve the company's party committee, board of directors, board of supervisors and management under the guidance of a unified goal, each with its own responsibility, a highly coordinated working mechanism to form a clear-oriented, scientific decision-making, effective implementation, effective supervision system. Strengthen the construction of corporate culture in an all-round way, further inherit and carry forward the Zijin spirit of "hard work, pioneering and innovative", inspire the passion and vitality of a new round of entrepreneurship, and form an excellent team of Zijin with ideals and convictions and a strong fighting force.
Zijin Mining has formed an internationalized "big family" with over 40% of its overseas employees. It can be expected that after 2-3 years, Zijin Mining's overseas resource reserves, mineral output and profits will fully surpass China and become an important participant in international mining. We should carry out our work in accordance with global thinking and international standards. While transferring Zijin's corporate culture and innovative ideas to domestic and foreign projects, we should carry out "localization" transformation according to the local realities of the project to further enrich and develop Zijin culture.
Mineral resources are an important material foundation of human society. "Developing mining and benefiting society" is our original intention and mission. Common development is our core value concept. We are committed to "helping China and the world's economic growth with high-quality mineral materials." Facing the future, despite many challenges and difficulties, as long as we are united in our efforts and march forward towards the set goals, we will certainly be able to realize the global mining dream of Zijin Mining!
January 1st, 2020