Zijin Mining Group's mining costs continue to rise

Beijing Apr 23 (Antaike) Zijin Mining Group Co., Ltd. achieved operating income of RMB 48.41 bln, up by 21.76% compared with that in 2011. But its net profit was only RMB 5.2 bln, down by 8.78% y-o-y. The company's gross profit rate decreased from 30.75% in 2011 to 24.87% in 2012. Meanwhile, the gold business achieved revenue of RMB 10.842 bln.

Zijin Mining Group produced 32.075t of mine gold in 2012, and gold from smelting as by products was 58.25t, and the total was 90.33t.

Zijin Mining Group’s production cost was RMB 78/g in 2011, 18% lower than the average industry cost level. But in 2012, the cost of production was RMB 109/g.

At the same time, the company’s inventory was in a sharp increase from 7.16 bln in 2011 to 11.6 bln by the end of last year, accounting for 17.23% of the total capital. As gold price continues to fall, there will be great pressure on Zijin Mining with current high inventory.

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