Zijin Mining reported a 30.6% jump in first-half profit as it increased output and cashed in on soaring prices, while weathering a mine closure in Papua New Guinea (PNG).
Zijin said it would “seize” on gold’s upward momentum by increasing output further in the second half of the year.
It lifted mined gold supply by 5.9% year-on-year in January-June to 20.24 tonnes, even after the company and partner Barrick Gold Corp halted production at the Porgera mine in PNG when the government refused to extend the lease in April.
Spot gold prices gained 17.4% in January-June and this month struck an all-time high above $2,000 an ounce as a weak dollar and falling returns on U.S. bonds drove investors to the safe-haven precious metal.
That help boost Fujian-based Zijin’s first-half net income to 2.42 billion yuan ($350 million), versus 1.85 billion yuan a year earlier, according to a filing to the Shanghai Stock Exchange on Friday. Revenue rose by 23.73% to 83.14 billion yuan.
Copper production rose by 34.9% year-on-year in the first half
Zijin and Barrick are still looking for a “legal and reasonable solution” to the Porgera impasse and communication with the PNG government is ongoing, Zijin said.
Zijin’s equity production at Porgera fell 32% from a year earlier but its acquisition of Continental Gold, completed in March, gave it extra output from the Buritica mine in Colombia, while the Norton Gold Fields project in Australia made a bigger contribution.
Separately, Zijin said next month it would start a $107 million revamp of Buritica, which would be completed in the second half of next year and increase annual gold output to 9.1 tonnes from the current 7.8 tonnes.
It also aims to put the Kamoa-Kakula copper mine in the Democratic Republic of Congo into operation in 2021.
Zijin’s mined copper production rose by 34.9% year-on-year in the first half to 230,710 tonnes.
($1 = 6.9177 Chinese yuan renminbi)
(By Tom Daly; Editing by Susan Fenton)
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