Contents 目錄 | | Page | | --- | --- | | | 頁 | | Corporate Information | 2 | | 公司資料 | | | Mining Operational Review | 4 | | 採礦業務回顧 | | | Management Discussion and Analysis | 13 | | 管理層討論及分析 | | | Other Information | 28 | | 其他資料 | | | Unaudited Interim Financial Statements | | | 未經審核中期財務報表 | | | Condensed Consolidated Statement of Profit or Loss and | | | Other Comprehensive Income | 37 | | 簡明綜合損益及其他全面收益表 | | | Condensed Consolidated Statement of Financial Position | 39 | | 簡明綜合財務狀況表 | | | Condensed Consolidat ...

Production and Projects - In 2021, Ruashi Mine produced 33,063 tonnes of copper and 3,379 tonnes of cobalt[7]. - Kinsenda Mine produced 28,197 tonnes of copper content in concentrates in 2021, with an average reserves grade of 5.6%[8]. - Musonoi Project has a total mine life of 19 years and is currently under construction with all necessary approvals obtained[9]. - Lubembe Project is located 30km south of Kinsenda Mine, with updated pre-feasibility studies and ongoing metallurgical testwork[10]. - Chibuluma South Mine is leased out under a finance lease agreement, with rental fees based on copper extracted and sold[11]. - The company produced 61,260 tonnes of copper and 3,379 tonnes of cobalt concentrates in 2021[17]. - The Musonoi Project's construction is progressing smoothly, with the feasibility study for intensive processing completed[17]. - The Group commenced the construction of Ruashi Mine's magnetic flotation plant in December 2021 to treat low-grade oxide and sulphide material, potentially extending the mine's life[27]. - The Musonoi copper-cobalt project has total reserves of 606kt of copper and 174kt of cobalt, with an average cobalt grade of 0.9%, positioning it among the highest-grade cobalt mines globally[30]. - The Lubembe Project's mineral resources increased by 6.1% to 1.91 million tonnes of contained copper, with measured and indicated resources rising by 46% from 1.04 million tonnes to 1.51 million tonnes[31]. - The Musonoi power project (65MVA load) was completed and commissioned, with operational 120kV main step-down substation and transmission lines[55]. - The construction of a comprehensive maintenance workshop has commenced, with steel components arriving on site[57]. Financial Performance - The revenue for the year was US$831.9 million, representing a year-on-year increase of 25%[17]. - The company's profits amounted to US$162.4 million, reflecting a year-on-year increase of 282%[17]. - The financial highlights section of the annual report provides a comprehensive overview of the company's performance metrics[13]. - The Group recorded a royalty income of approximately US$2.4 million under the finance lease agreement for mining assets at Chibuluma in 2021[26]. - Revenue for 2021 was US$361.741 million, a 16% increase from US$310.789 million in 2020, with copper revenue rising by 27% and cobalt revenue decreasing by 3%[41]. - The Group's total sales volume of copper decreased to 57,001 tonnes in 2021 from 67,843 tonnes in 2020, and cobalt sales volume dropped to 2,617 tonnes from 5,468 tonnes[111]. - Total revenue for the Group in 2021 was US$831.9 million, representing a 25% increase from US$664.6 million in 2020[108]. - The trading division recorded a turnover of US$211.3 million in 2021, up from US$166.9 million in 2020[106]. - The Group recorded a consolidated profit of US$162.4 million for the year ended 31 December 2021, compared to US$42.5 million for the year ended 31 December 2020[132]. - Profit attributable to shareholders increased to US$120.5 million for the year ended 31 December 2021, up from US$29.9 million in 2020[132]. - The Group's EBITDA for the year ended 31 December 2021 was US$311.5 million, compared to US$140.4 million in 2020, indicating an increase of 121%[143]. Market Conditions and Commodity Prices - The international prices of non-ferrous metals, including copper and cobalt, rose significantly in 2021, driven by demand in new energy vehicles[15]. - Average market copper price in 2021 was US$9,315 per tonne, 51% above the average in 2020 of US$6,169 per tonne, leading to a significant increase in the Group's mining segment revenue[24]. - Copper price reached an all-time high of US$10,720 per tonne in May 2021, representing a 39% increase compared to the end of 2020[23]. - Cobalt price increased by 119% from US$15.3 per pound at the beginning of 2021 to US$33.5 per pound by the end of 2021, with global cobalt production reaching 170,000 tonnes, a 20% increase from 2020[28]. - The average LME copper price for 2021 was US$9,315 per tonne, a 51% increase from US$6,169 per tonne in 2020, while the average MB cobalt price rose 55% to US$52,714 per tonne from US$33,954 per tonne[112]. - Analysts expect the global copper market to return to deficit from 2025 onwards, with a significant deficit of around ten million tonnes anticipated by 2030[160]. - The demand for copper is expected to increase due to its critical role in construction, infrastructure, and the transition to carbon neutrality[159]. Cost Management and Efficiency - The company aims to optimize processing circuits and improve copper recoveries in its projects[10]. - There is a focus on reducing costs and increasing efficiency while accelerating the development of the Musonoi Project[18]. - The average recovery rate for cobalt hydroxide concentrate at Ruashi is 67%[89]. - The average LME copper price increased by 51% from US$6,169 per tonne in 2020 to US$9,315 per tonne in 2021[103]. - Mining costs increased by 11% in 2021, attributed to increased activities at Ruashi Mine to address lower ore feed grade and recovery rates[117]. - The Group's processing costs were 11% higher in 2021 due to increased reagent consumption related to ore characteristics[117]. Strategic Initiatives and Future Outlook - The company aims to expand its product scope and introduce strategic investors to optimize shareholder structure[18]. - The company plans to explore M&A opportunities to expand its asset scale and replicate past successes overseas[18]. - The Group is actively pursuing merger and acquisition opportunities in southern Africa to seek synergies with existing operations[32]. - The company is focused on risk management and financial oversight to ensure sustainable growth and operational efficiency[175]. - The company is actively seeking new business development opportunities in Southern Africa to leverage synergies with existing operations[168]. Leadership and Governance - Mr. Gao Tianpeng has been the CEO since August 2017, overseeing various aspects including cost management and financial operations for 29 years[172]. - The company has a strong board with members holding various qualifications, including CPA and CFA certifications[183]. - The management team has significant experience in listed company governance and corporate finance, enhancing the company's strategic direction[182]. - The company is focused on expanding its market presence and improving governance through experienced directors[183]. Sustainability and Corporate Responsibility - The company is committed to sustainable development and has included a sustainability report in its annual documentation[2]. - The Group's environmental policies and performance are discussed in the "Sustainability Report" on pages 108 to 138[194]. - The Group's relationship with shareholders and investors is outlined on pages 102 to 107[194].

Production and Mining Operations - Ruashi Mine's copper production decreased by 7% from 16,823 tonnes in 2020 1H to 15,637 tonnes in 2021 1H, while cobalt production fell by 45% from 2,635 tonnes to 1,447 tonnes due to lower feed grades[6]. - A total of 849,145 tonnes of ore was mined in 2021 1H, representing a 5% decrease compared to 895,376 tonnes in 2020 1H[6]. - The Group operates two mines (Ruashi and Kinsenda), one leased mine (Chibuluma South), one development project (Musonoi), and one exploration project (Lubembe)[6]. - Ruashi Mine has a life of mine (LoM) of 8 years with resources of 637kt Cu and 85kt Co, and reserves of 243kt Cu and 27kt Co as of December 31, 2020[6]. - The Group maximized throughput rates and plant utilization at Ruashi Mine to compensate for the lack of suitable foreign ore supply[6]. - The Group's mining operations are located in the Democratic Republic of the Congo (DRC), specifically in Haut Katanga Province[6]. - The processing method at Ruashi Mine includes leach SX-EW processing, producing copper cathode and cobalt hydroxide[6]. - The Group's operational review indicates a continued focus on higher stripping rates of waste and ore at Ruashi Mine[7]. - Ruashi produced 15,637 tonnes of copper in 2021 1H, a 7% decrease from 2020 1H's 16,823 tonnes[9]. - Cobalt production decreased by 45% to 1,447 tonnes in 2021 1H compared to 2,635 tonnes in 2020 1H[10]. - Kinsenda produced 12,866 tonnes of copper in 2021 1H, a 10% decrease from 14,219 tonnes in 2020 1H due to lower average feed grade[18]. - Kinsenda's average feed grade was 4.32% in 2021 1H, down from 4.85% in 2020 1H, while overall plant recovery rate improved slightly to 98.08%[18]. - Kinsenda Mine produced 12,866 tonnes of copper concentrate in 2021 1H, a 10% decrease from 14,219 tonnes in 2020 1H, primarily due to lower average grade[19]. Financial Performance - The Group's financial statements are unaudited and include condensed consolidated statements of profit or loss and other comprehensive income[2]. - The interim report is for the six months ended June 30, 2021, and includes management discussion and analysis[2]. - Average realised copper price increased by 71% to US$9,021 per tonne in 2021 1H from US$5,287 per tonne in 2020 1H[10]. - Average realised cobalt price rose by 120% to US$42,930 per tonne in 2021 1H from US$19,472 per tonne in 2020 1H[12]. - Overall revenue for 2021 1H was 30% higher than in 2020 1H, driven by a 57% increase in copper revenue despite lower sales volumes[12]. - Capital expenditure for Ruashi Mine in 2021 1H was US$14.4 million, including US$11.7 million for pit 3 waste stripping[13]. - Kinsenda's revenue for 2021 1H was US$133.8 million, with an average realised copper price of US$9,567 per tonne[17]. - Copper revenue for 2021 1H was US$133.8 million, a 212% increase compared to 2020 1H, driven by higher copper prices and sales volume[19]. - The Group's revenue for 2021 1H was US$360.4 million, a 4% increase from US$347.5 million in 2020 1H[39]. - Total revenue from mining operations, including provisional pricing adjustments, was US$323.7 million in 2021 1H, up from US$206.8 million in 2020 1H[42]. - Gross profit surged by 814% from US$14.6 million in 2020 1H to US$133.7 million in 2021 1H, with a gross profit ratio improving to 37% from 7%[51]. - The Group recorded a consolidated profit of US$78.7 million for the six months ended June 30, 2021, compared to a loss of US$24.8 million for the same period in 2020[62]. - Profit attributable to shareholders amounted to US$61.1 million in 2021 1H, a turnaround from a loss of US$28.3 million in 2020 1H[62]. - EBITDA for the six months ended 30 June 2021 was US$163.4 million, significantly up from US$41.3 million in 2020, representing an increase of 295%[70]. - The company reported revenue of $360,444,000 for the six months ended June 30, 2021, compared to $214,481,000 for the same period in 2020, representing an increase of approximately 68%[139]. - Gross profit for the period was $133,687,000, significantly up from $14,634,000 in the previous year, indicating a substantial improvement in profitability[139]. Capital Expenditures and Investments - Ruashi commenced construction of a 600kt per annum flotation and magnetic separation plant, expected to be operational by the end of 2021[13]. - Capital expenditure at Kinsenda Mine for 2021 1H was US$4.3 million, mainly for underground development and dewatering[20]. - The Musonoi power project is currently 20% complete, with the core shed and integrated warehouse 90% completed[28]. - The Northern Road for the Musonoi project is 80% completed, with 30% of the bridge section piling completed[28]. - Capital expenditures for property, plant, and equipment amounted to US$48.8 million for the six months ended 30 June 2021, compared to US$20.0 million in the same period of 2020[73]. Market Conditions and Commodity Prices - The average LME copper price increased by 66% from US$5,490 per tonne in 2020 1H to US$9,095 per tonne in 2021 1H[34]. - LME copper price reached an all-time high of US$10,720 per tonne in May 2021 and closed at US$9,385 per tonne at the end of June 2021[34]. - The average LME copper prices for the quarters from March 2020 to June 2021 showed a gradual upward trend, with prices rising from US$5,638 to US$9,711 per tonne[82]. - Copper market is expected to remain tight in the short term due to disruptions in South America and low LME inventories, the lowest since 2008[86]. - Global commodities trader Trafigura predicts a significant copper deficit of approximately 10 million tonnes by 2030, requiring the construction of eight projects the size of Escondida to close the gap[86]. - The electric vehicle industry is projected to require 250% more copper for charging stations by 2030 compared to 2019, with each EV consuming four times more copper than conventional vehicles[86]. - Cobalt prices have stabilized between $19.8 and $25.3 per pound in 2021 after a significant drop from $43.7 per pound in 2018[86]. Corporate Governance and Compliance - The Company has established an audit committee in compliance with the Listing Rules and CG Code provisions[121]. - The board is committed to maintaining high standards of corporate governance, complying with all applicable code provisions during the reporting period[127]. - The Company has established a remuneration and nomination committee to oversee the remuneration and nomination functions for all directors and senior management[125]. - The Group's financial statements have been prepared in accordance with IAS 34 and applicable disclosure requirements, ensuring compliance with international accounting standards[162]. Shareholder Information - Jinchuan Group Co., Ltd. holds a long position of 7,593,009,857 shares, representing 65.69% of the total shares in issue[93]. - Jinchuan (BVI) 1 Limited holds 1,888,449,377 shares, accounting for 14.98% of the total shares in issue[93]. - Gansu Province Xinye Asset Management Co. Ltd. holds 1,110,000,000 shares, representing 8.80% of the total shares in issue[93]. - The total number of shares available for issue under the 2019 Share Option Scheme is 1,260,987,305 shares, which represents 10% of the Company's issued shares as of June 19, 2019[3]. - The Company may refresh the Mandate Limit for share issuance upon approval from shareholders, with an overriding limit of 30% of the Company's issued shares for outstanding options[3]. Operational Challenges and Future Outlook - The Group's overseas business is susceptible to local government policies and international relations, which may adversely affect financial conditions and operating results[88]. - The Group aims to continuously reduce production costs with a strategy focused on "Improvement on Cobalt and Maintaining Growth on Copper" to enhance production and sales[27]. - The Group is actively pursuing new business development opportunities in Southern Africa to seek synergies with existing mines[27]. - The Group remains confident in overcoming market disadvantages and creating value for stakeholders under unfavorable market conditions[27].

Mining Operations - Kinsenda Mine produced 30,557 tonnes of copper content in concentrates in 2020, with an average reserves grade of 5.8%[7] - Ruashi Mine produced 33,897 tonnes of copper and 4,158 tonnes of cobalt in 2020[8] - Chibuluma produced 8,023 tonnes of copper in 2020 and entered a lease agreement for mining assets in December 2020[9] - Musonoi Project is under construction with a total mine life of 19 years, having acquired all necessary approvals[10] - Lubembe Project's pre-feasibility study was updated in 2020, with further metallurgical testwork planned for 2021[11] - The company aims to optimize processing circuits and copper recoveries in the Lubembe Project[11] - The company has a diversified portfolio with operations in the Democratic Republic of Congo and Zambia[5] - The average grade of copper deposits in Kinsenda is among the highest globally, indicating strong resource quality[7] - The company is focused on expanding its mining operations and enhancing production capabilities[10] - The strategic lease agreement for Chibuluma is expected to generate additional revenue through royalties[9] Financial Performance - Revenue from continuing operations reached US$531.5 million, representing a year-on-year increase of 14.2%[16] - Profit after tax from continuing operations amounted to US$41.9 million, reflecting a significant year-on-year increase of 276.5%[16] - The company produced 72,477 tonnes of copper and 4,158 tonnes of cobalt concentrates in 2020[16] - The Group's revenue for the year ended 31 December 2020 was US$664.6 million, a decrease of 46.7% compared to US$1,246.9 million in 2019[83] - Consolidated profit for the year ended 31 December 2020 was US$42.5 million, a significant increase from US$13.1 million in 2019[112] - Profit attributable to shareholders increased by 242% to US$29.9 million in 2020 from US$8.7 million in 2019, driven by rising copper and cobalt prices, strict cost control, and reversal of impairment loss[113] - The Group's EBITDA for 2020 was US$140.4 million, compared to US$116.2 million in 2019, reflecting an increase of 20.8%[121] Commodity Prices - The price of copper rebounded throughout the year after a dramatic drop at the beginning due to the COVID-19 pandemic[16] - Copper price reached a four-year low of US$4,617.5 per tonne on March 23, 2020, due to COVID-19, leading to a loss attributable to shareholders of US$28.3 million in the first half of 2020[24] - In the second half of 2020, copper price increased to a high of US$7,964 per tonne, representing a 72% increase from the lowest point in the year, with an average market price of US$6,847 per tonne, 24.7% higher than the first half[24] - As of the date of the annual report, copper and cobalt prices increased to US$8,929 per tonne and US$22.5 per pound, respectively, representing increases of 15% and 47% compared to the end of 2020[25] - The average price realized per tonne of copper increased by 11.5% to US$5,721 in 2020, while the average price for cobalt decreased by 4.2% to US$20,031[88] Projects and Developments - The Musonoi Project secured financing and successfully commenced construction during the reporting period[16] - The Musonoi copper-cobalt project contains total reserves of 594kt of copper and 174kt of cobalt, with an average grade of 0.9% cobalt, ranking it among the highest grade cobalt mines globally[29] - The Group secured a US$350 million, 10-year loan facility for the Musonoi Project in December 2020, enhancing its financing capabilities[30] - The construction of Ruashi's magnetic flotation plant has commenced to treat low-grade oxide and sulphide material, potentially extending the life of the mine[27] - The Group is actively pursuing merger and acquisition opportunities in southern Africa to seek synergies with existing mines[30] Operational Efficiency - C1 cash cost per tonne of copper was reported at $3,200 in 2020, reflecting operational efficiency[33] - The Group's cash flow from Ruashi and Kinsenda is being used to gradually repay outstanding bank and shareholder loans[30] - The average stripping rates of waste and ore at Ruashi Mine were increased in 2020 to optimize production[37] - The Group's total mining activities expenses, excluding ore processing, were US$117.124 million[65] - Mining operations' cost of sales decreased to US$374.8 million in 2020, a 1.2% reduction from US$379.3 million in 2019[95] Market Outlook - The global economy is expected to recover in 2021, with mineral product prices anticipated to rise due to limited supply[19] - The copper market is expected to remain tight in the short term due to disruptions in South American copper production and low LME inventories[149] - The demand for copper is anticipated to increase further with the global shift towards carbon neutrality, particularly in renewable energy sectors[148] - Long-term demand for cobalt is projected to grow from 143,000 tonnes in 2020 to 230,000 tonnes in 2025, with the EV battery sector's share increasing from 14.6% to 27%[155] Corporate Governance - The Group's compliance with applicable laws and regulations was confirmed, with no material breaches reported[186] - The Group emphasizes compliance with regional regulations to instill confidence in investors and shareholders[158] - The Board remains confident that the Group's performance will overcome market disadvantages and create value for stakeholders[158] Management and Personnel - Liu Jian has extensive experience in financial reporting and management, having worked in various positions within Jinchuan Group and its subsidiaries since 1994[165] - Wang Qiangzhong has held multiple leadership roles, including general manager and chairman, and has significant experience in financial management and operation management[166] - Mr. Wong Hok Bun Mario, the Chief Financial Officer, has over 18 years of experience in auditing, accounting, and financial management, and has been with the company since August 2018[171] Environmental and Social Responsibility - The Group's environmental policies and performance are outlined in the "Sustainability Report," prepared in accordance with the Environmental, Social and Governance Reporting Guide[185] - The Group is committed to monitoring local government policies and international relations to mitigate risks to its overseas business operations[158]

Production and Operations - The Ruashi Mine's copper and cobalt production volumes for the first half of 2020 were slightly higher compared to the same period in 2019, attributed to increased mining activities and higher throughput rates[11]. - Ruashi Mine focused on maximizing throughput and plant utilization to compensate for a shortage of foreign ore purchases starting in April 2020, as a cash preservation measure during COVID-19[11]. - The mine continued to increase stripping rates of waste and ore in the first half of 2020 to substitute foreign ore and prepare for the rainy season[11]. - The company operates two mines (Ruashi and Kinsenda), one mine in care and maintenance (Chibuluma South), one project at development stage (Musonoi), and one exploration project (Lubembe)[6]. - The company aims to enhance operational efficiency and maintain production levels despite external challenges[11]. - The management is focused on strategic initiatives to expand market presence and optimize resource utilization[11]. - The company is actively monitoring market conditions to adjust its operational strategies accordingly[11]. - Future outlook includes potential exploration and development of additional resources to support long-term growth[11]. Financial Performance - Revenue for Ruashi Mine increased by 34% to US$146.2 million in 2020 1H, compared to US$109.1 million in 2019 1H, driven by higher cobalt prices and volumes sold[16]. - The Group's revenue for the six months ended June 30, 2020, was US$347.5 million, a decrease of 51% compared to US$705.4 million for the same period in 2019[42]. - The company reported a loss for the period of $24.832 million, compared to a profit of $7.691 million in the previous year, marking a significant shift in performance[156]. - Total comprehensive expense for the period was $25.352 million, compared to a comprehensive income of $7.659 million in 2019, reflecting a change of approximately 431.5%[156]. - Basic loss per share was $0.22, compared to earnings of $0.03 per share in the same period of 2019[156]. - The Group recorded a consolidated loss of US$24.8 million for 2020 1H, compared to a profit of US$7.7 million in 2019 1H[67]. - Loss attributable to shareholders was US$28.3 million in 2020 1H, a turnaround from a profit of US$4.2 million in 2019 1H, driven by falling copper prices and impairment losses[67]. Production Metrics - Copper production for the six months ended June 30, 2020, was reported at 16,823 tons, a 1% increase from 16,587 tons in 2019[15]. - Cobalt production for the same period was 2,635 tons, slightly higher than 2,611 tons in 2019, with a recovery rate improvement from 63.88% to 69.31%[15][16]. - Kinsenda Mine produced 14,219 tons of copper content in concentrate, a 12% decrease from 16,210 tons in 2019 1H, primarily due to lower ore grade[18][20]. - Copper production increased by 6% in 2020 1H, totaling 39,006 tons compared to 36,897 tons in 2019 1H[2]. - The selling of 4,453 tons of crown pillar material positively impacted Chibuluma's production, which reached 7,964 tons in 2020 1H, compared to 4,100 tons in 2019 1H[3]. Market Conditions - The average copper market price during 2020 1H was US$5,490 per ton, which is 11% lower than the previous year due to COVID-19 impacts[15][16]. - The average cobalt market price for 2020 1H was US$34,605 per ton, down 5% from 2019 1H, reflecting a decline in aerospace demand[16]. - Copper prices rebounded to US$6,300/ton after the US-China Phase 1 trade deal in January 2020, but fell to a low of US$4,618/ton in March 2020 due to COVID-19 disruptions[97]. - By the end of June 2020, LME copper price recovered to US$6,038/ton, marking the highest point since January 2020, and reached a two-year high of US$6,667/ton on August 19, 2020[97][99]. - The cobalt market is expected to remain challenging in the second half of 2020, with the Group monitoring market fluctuations closely[102]. Cost Management - The average realized copper price for Ruashi in 2020 1H was US$5,287 per ton, down 8.3% from US$5,764 per ton in 2019 1H[16]. - C1 cash costs (including by-product credit) per tonne of copper decreased to US$2,614 in 2020 from US$3,105 in 2019, indicating improved cost efficiency[74]. - Cost of mining operations increased by 14% to US$175.9 million in 2020 1H, driven by higher mining activities[50]. - Processing costs increased by 6% in 2020 1H, aligned with increased throughput to compensate for lower grades at Ruashi and Kinsenda Mines[50]. - Selling and distribution costs decreased by 37% from US$18.9 million in 2019 1H to US$11.9 million in 2020 1H, primarily due to reduced clearing and transportation costs[59]. Capital Expenditure - Capital expenditure for Ruashi Mine in 2020 1H was US$3.4 million, including US$1.8 million for waste stripping[16]. - Kinsenda's capital expenditure for the same period was US$6.3 million, mainly for underground development[19][22]. - Significant capital expenditures during the first half of 2020 amounted to US$20.0 million for property, plant, and equipment, compared to US$19.0 million in the same period of 2019[88]. Strategic Initiatives - The Group aims to become a world-class mineral corporation by seeking investment opportunities while complying with regional regulations[106]. - The strategy focuses on "Improvement on Cobalt and Maintaining Growth on Copper" to enhance production efficiency and reduce costs, aiming for better profitability[110]. - The company is committed to continuously improving quality, efficiency, and production levels while reducing production costs[110]. Employee and Governance - The company has 1,757 permanent employees and 3,057 contractor employees as of June 30, 2020, showing a slight decrease in permanent staff from 1,761 at the end of 2019, while contractor employees increased from 2,778[108][111]. - The Board has resolved not to declare any interim dividend for the six months ended June 30, 2020, consistent with the previous year[109][112]. - The Audit Committee is composed of one non-executive director and three independent non-executive directors, ensuring relevant expertise in accounting and financial management[143]. - The company has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2020[147].

Production and Operations - The Kinsenda Mine produced 31,000 tons of copper content in concentrates in 2019, with an average copper reserve grade of 5.7%[9] - The Ruashi Mine's copper cathode and cobalt output reached 33,800 tons and 5,070 tons, respectively, in 2019[10] - The Chibuluma South Mine and Chifupu Deposit produced 8,000 tons of copper content in concentrates in 2019[11] - The company produced a total of 73,057 tonnes of copper and 5,070 tonnes of cobalt in 2019, both record highs for JCI[24] - Kinsenda's annual copper production exceeded 30,000 tonnes for the first time, with a total of 31,059 tonnes of copper content in concentrates produced, marking a 13% increase compared to 2018[24] - Ruashi Mine's copper production for the year ended December 31, 2019, was 33,824 tons, a 40% increase from 24,108 tons in 2018[47] - Cobalt production increased by 7% to 5,070 tons in 2019, compared to 4,752 tons in 2018, due to a 6% increase in cobalt input[47] - The Group's copper production for the year ended December 31, 2019, was 73,057 tonnes, while cobalt production was 4,638 tonnes[36] - The Kinsenda mine has reached full production, with a focus on developing the Musonoi copper-cobalt mine and the sulfide deposits at Ruashi[145] Financial Performance - Total revenue for 2019 was US$1,246.9 million, representing a year-on-year decrease of 11%[18] - Net profit for the year amounted to US$13.1 million, reflecting a significant year-on-year drop of 86%[18] - The average benchmark LME copper price decreased by 8% and the MB cobalt price decreased by 56% compared to 2018[27] - The average realized copper and cobalt prices for the year decreased by 11% and 77% respectively, leading to a drop in the mining segment's result from US$156.1 million in 2018 to US$7.0 million in 2019[28] - Revenue for Ruashi Mine decreased by 26% to US$273.6 million in 2019, down from US$371.8 million in 2018, primarily due to lower average realized prices for copper and cobalt[47] - Average realized copper price in 2019 was US$5,612 per ton, down 8% from US$6,102 per ton in 2018; average cobalt price was US$16,116 per ton, down 77% from US$69,961 per ton in 2018[47] - Gross profit decreased by 55.2% from $198.8 million in 2018 to $89.1 million in 2019, with a gross profit margin of 7.1%[94] - Consolidated profit for the year ended 31 December 2019 was US$13.1 million, a significant decrease from US$94.6 million in 2018[106] - Profit attributable to shareholders decreased by 87% from US$66.9 million in 2018 to US$8.7 million in 2019, primarily due to lower copper and cobalt prices[107] Market Conditions - The global trade war and economic slowdown have led to significant fluctuations in copper prices throughout 2019[16] - Cobalt prices fell sharply in the first half of 2019 but began to recover in the second half of the year[16] - The annual report highlights the increasing risks associated with mineral product supply due to the ongoing resources war[16] - The company remains cautiously optimistic about 2020, anticipating that economic stimulus measures will boost demand for upstream mineral products[20] - As of the date of the Annual Report, copper prices have dropped to US$4,789.5 per tonne, and cobalt prices have decreased to US$16.15 per pound, reflecting a significant decline due to the coronavirus pandemic[30] - The implementation of new mining legislation in the DRC raised cobalt royalties from 2% to 10%, significantly impacting the Group's sales strategy and cash flow[139] - The global refined copper market is projected to face a deficit of approximately 250,000 tonnes in 2020[142] - The electric vehicle industry is expected to require 250% more copper by 2030, benefiting from the growth of the sector[142] Strategic Initiatives - The company is focused on expanding its mining operations and exploring new projects in the DRC and Zambia[12][11] - The company aims to enhance its market position through strategic investments and potential acquisitions in the mining sector[16] - The company plans to accelerate the construction and development of the Musonoi Project and focus on high-quality projects for mergers and acquisitions[19] - The Group is actively pursuing merger and acquisition opportunities, particularly in Southern Africa, to seek synergies with existing operations[34] - The Group's focus is on the construction of the Musonoi copper-cobalt mine and the development of Ruashi's sulphide deposit, with construction starting in late 2018[144] Cost Management - The company aims to improve production efficiency and reduce overall cash costs, which decreased from US$5,275/t in 2018 to US$4,098/t in 2019[26] - The Group's C1 cash cost per tonne of copper was US$3,068 in 2019, reflecting the cost structure of copper production[37] - C1 cash costs (including by-product credit) for 2019 were US$231.7 million, compared to US$102.4 million in 2018, reflecting a significant increase[113] - C1 cash cost per tonne of copper (excluding by-product credit) was US$4,098 in 2019, compared to US$5,275 in 2018, showing improved cost efficiency[113] - The Group's direct and indirect mining costs for 2019 were US$322.9 million, compared to US$371.8 million in 2018, indicating a reduction in mining costs[113] Mineral Resources and Reserves - The Musonoi Project has total reserves of 595kt of copper and 183kt of cobalt, with an average cobalt grade of 0.9%, positioning it among the highest-grade cobalt mines globally[33] - The total copper-cobalt resources amounted to 79.2 million tons with an average grade of 2.2% Cu and 0.6% Co, containing 1,763 kt Cu and 455 kt Co[75] - The total copper-only resources reached 118.3 million tons with an average grade of 2.5% Cu, containing 2,942 kt Cu as of December 31, 2019[76] - The total contained metals for the copper-cobalt resources increased from 1,646 kt Cu and 374 kt Co in 2018 to 1,763 kt Cu and 455 kt Co in 2019[75] - Proved and probable copper-only reserves at Kinsenda Mine are 5.7 million tons with a grade of 5.7% Cu, containing 326 kt Cu[81] Governance and Compliance - The Group's compliance with the SAMREC Code ensures the reliability of the reported mineral resources and reserves[72] - The Group has complied with applicable laws and regulations without any material breaches impacting business operations[170] - The Group's environmental policies and performance are outlined in the Sustainability Report on pages 95 to 117[170] Management and Personnel - The management team includes experienced professionals with extensive backgrounds in financial and operational management, ensuring effective leadership[150][155] - Mr. Zhang Youda has been serving as a non-executive director since August 2017, with extensive experience in financial management and operations[156] - Mr. Liu Jian, aged 47, has been with JCG since 1994, currently serving as the deputy general manager of the Finance Department, showcasing significant expertise in financial reporting[157] - Mr. Wang Qiangzhong, aged 54, has held various leadership roles, including general manager and chairman at Gansu Lantuo Group, and has a strong background in financial management[158] - Mr. Wu Chi Keung, aged 63, has over 40 years of experience in financial audit and has served as an independent non-executive director since January 2011[160] - Mr. Yen Yuen Ho, Tony, aged 72, has been an independent non-executive director since August 2010, with a legal background and extensive experience in public administration[162]

Mining Operations - Ruashi Mine increased ore mining activities by 96% in the six months ended June 30, 2019, compared to the same period in 2018[6]. - Copper production at Ruashi Mine reached 16,587 tons, up from 11,293 tons in 2018, while cobalt production was 2,611 tons, slightly up from 2,579 tons[7]. - The mining plan at Ruashi Mine has accelerated stripping rates to expedite access to identified areas of high-grade ore[6]. - The total resources at Ruashi Mine are estimated at 623,000 tons of copper and 92,000 tons of cobalt, with reserves of 190,000 tons of copper and 26,000 tons of cobalt[9]. - The Group operates three mines: Ruashi, Chibuluma South (including Chifupu Deposit), and Kinsenda, with one project at the development stage (Musonoi Project) and one exploration project (Lubembe Project)[5]. - Kinsenda Mine's copper production for the six months ended June 30, 2019, increased by 21% to 16,210t from 13,438t in the same period of 2018[15]. - Chibuluma South Mine's copper production decreased by approximately 29% to 4,100t from 5,791t in the same period of 2018[21]. - The Chibuluma South Mine, including the Chifupu deposit, has a mine life of 3.5 years with resources of 83,000 tons of copper and reserves of 12,000 tons of copper[23][24]. - The Musonoi Project has resources of 1,023,000 tons of copper and 282,000 tons of cobalt, with reserves of 590,000 tons of copper and 165,000 tons of cobalt[26]. - The Lubembe Project, an undeveloped greenfield copper exploration project, has resources of 1,718,000 tons of copper and a mining license extended until 2032[28][29]. Financial Performance - Revenue from Ruashi Mine for the six months ended June 30, 2019, was US$109.1 million, a decrease from US$260.2 million in 2018[7]. - Total revenue for Ruashi Mine decreased by 58% to US$16.5 million for the six months ended June 30, 2019, compared to the same period in 2018[12]. - Revenue for the six months ended June 30, 2019, was US$705.4 million, representing an 11.9% decrease from US$800.7 million in the same period of 2018[39]. - Cobalt revenue plummeted by 95% from US$190.5 million in 2018 to US$8.7 million in 2019, primarily due to significantly lower pricing and reduced sales volume[42]. - Gross profit decreased by 66.2% to US$60.1 million, with gross profit margin dropping from 22.2% in 2018 to 8.5% in 2019 due to lower copper and cobalt prices[50]. - The Group recorded a consolidated profit of US$7.7 million for the six months ended June 30, 2019, compared to US$84.9 million for the same period in 2018[62]. - Profit attributable to shareholders decreased by 93% from US$61.0 million in the first half of 2018 to US$4.2 million in the first half of 2019[62]. - The average benchmark LME copper price fell by approximately 11% and MB cobalt prices dropped by about 59% from 2018 to 2019[62]. - The company reported a profit for the period of US$4,185,000 for the six months ended June 30, 2019, contributing to a total comprehensive income of US$7,691,000[131]. Production Costs - C1 cash costs (excluding by-product credit) for the six months ended June 30, 2019, were $126,996, a decrease from $189,733 in 2018, representing a reduction of approximately 33%[66]. - C1 cash cost per tonne of copper (excluding by-product credit) for the six months ended June 30, 2019, was $3,334, compared to $5,738 in 2018, showing a decrease of around 42%[66]. - The company reported direct and indirect mining costs of $153,867 for the six months ended June 30, 2019, compared to $185,973 in 2018, indicating a reduction of about 17%[66]. - The depreciation of mineral rights increased to $8,567 for the six months ended June 30, 2019, from $2,547 in 2018, representing an increase of approximately 237%[69]. Market Conditions - The Group's mining operations faced negative impacts from falling copper and cobalt prices during the first half of 2019, prompting an increase in production volume to mitigate these effects[35]. - The cobalt market is expected to remain challenging in the second half of 2019, with analysts predicting long-term demand growth from 125,000 tonnes in 2018 to 185,000 tonnes in 2023, driven by the electric vehicle battery sector increasing its share from 20% to 35%[88]. - China's copper concentrate imports reached an all-time high of 19.72 million tonnes in 2018, representing a 13.7% increase compared to 2017, with projected deficits of approximately 190,000 tonnes in 2019 and 250,000 tonnes in 2020 for refined copper[88]. Corporate Governance and Compliance - The Board is committed to high standards of corporate governance and has complied with all applicable code provisions during the reporting period[119]. - The Audit Committee has reviewed the Group's unaudited interim financial statements for the six months ended June 30, 2019[111]. - The Remuneration and Nomination Committee is responsible for reviewing remuneration and nomination functions for all Directors and senior management[112]. Shareholder Information - As of June 30, 2019, Jinchuan Group Co., Ltd. held a total of 7,567,325,857 shares, representing 65.48% of the total issued shares[99]. - The total number of issued shares of the company was 12,609,873,051 as of June 30, 2019[99]. - The percentage calculations for substantial shareholders were based on the total number of issued shares as of June 30, 2019[101]. Future Outlook - The Group aims to significantly reduce production costs while increasing production and sales through its strategy of "Improvement on Cobalt and Maintaining Growth on Copper"[89]. - The Group will continue to explore new business development opportunities, particularly in southern Africa, to seek synergies with existing operations[89]. - The Group anticipates a gradual recovery in cobalt prices as manufacturers and traders deplete their stock, ending the year-long downward trend[88].

Production and Operations - The Kinsenda Mine produced 27kt of copper concentrates in 2018, with an average copper grade of 4.8% and an annual capacity of 24kt[6]. - The Ruashi Mine output reached 24kt of copper cathode and 4.8kt of cobalt hydroxide in 2018[7]. - The Chibuluma South Mine produced 10kt of copper concentrates in 2018[7]. - The Musonoi Project, located in the DRC, has a high-grade cobalt deposit (0.8%) and is in the preparation phase for construction[8]. - The Lubembe Project's pre-feasibility study was completed in 2018[9]. - The Kinsenda Mine successfully launched commercial production, producing 27,492 tonnes of copper concentrate in 2018[20]. - The Group's cobalt production for 2018 was 3,391 tonnes, while copper production was 42,587 tonnes, reflecting a strategic focus on cobalt in the first half of the year[37]. - Copper production for the year ended 31 December 2018 was 24,108 tonnes, a reduction of 24% from 31,546 tonnes in 2017[47]. - Cobalt production increased by 2% to 4,752 tonnes in 2018, compared to 4,638 tonnes in 2017, due to higher feed grade and recovery improvements[48]. - The Kinsenda Mine produced 27,492 tonnes of copper and sold 30,913 tonnes in 2018, generating revenue of US$170.6 million[63][64][65]. Financial Performance - The Group achieved revenue of US$1,400.0 million in 2018, representing a year-on-year growth of 155%[16]. - The profit for the year reached US$94.6 million, an increase of 77% compared to US$53.4 million in 2017[20]. - Revenue for Ruashi Mine decreased by 1.9% to US$371.8 million in 2018 from US$378.9 million in 2017[49]. - The Group's revenue for the year ended December 31, 2018, was US$1,400.0 million, representing an increase of 154.9% compared to US$549.2 million for the year ended December 31, 2017[97]. - Gross profit rose by 71.1% from US$116.2 million in 2017 to US$198.8 million in 2018, driven by higher cobalt prices and increased copper production volume[108]. - The Group recorded a consolidated profit of US$94.6 million for the year ended 31 December 2018, compared to US$53.4 million for the year ended 31 December 2017, representing an increase of 77%[123]. - Profit attributable to shareholders for the year ended 31 December 2018 was US$66.9 million, a 60.8% increase from US$41.6 million in 2017[123]. Market Conditions and Pricing - The overall business condition in 2018 was impacted by significant fluctuations in copper and cobalt prices due to economic and geopolitical factors[13]. - Cobalt prices fluctuated significantly in 2018, starting at $35 per pound and peaking at $43.7 per pound before dropping to $15.35 per pound by February 2019 due to increased supply and reduced demand from battery manufacturers[30]. - The average cobalt price realized by the Group was US$33.7 per pound in the first half of 2018[28]. - The average realized copper price for 2018 was US$6,102 per tonne, slightly down from US$6,119 per tonne in 2017[49]. - Average realized cobalt price for 2018 was US$69,961 per tonne, significantly up from US$39,817 per tonne in 2017[49]. Costs and Expenses - Royalty expenses comprised 7.6% of the Group's mining cost in 2018, up from 5.2% in 2017[29]. - The total cost of sales for the year ended 31 December 2018 was US$1.2 billion, significantly higher than US$433.0 million in 2017[104]. - Administrative expenses increased by 136.8% from US$20.6 million in 2017 to US$48.7 million in 2018, mainly due to higher royalty expenses and staff costs[116]. - Mining royalties payable increased by 85.2% from US$18.3 million in 2017 to US$33.9 million in 2018, influenced by the new DRC Mining Code that raised royalty rates[116]. - Net financing costs surged by 187.1% from US$7.6 million in 2017 to US$22.1 million in 2018, due to the cessation of capitalization of finance costs related to Kinsenda Mine and rising bank loan interest rates[110]. Strategic Initiatives and Future Plans - The Group plans to explore opportunities for mergers and acquisitions to achieve leapfrog development[18]. - The Musonoi Project's construction will commence shortly, with financing arrangements underway[23]. - The Group is actively pursuing new business development opportunities, particularly in Southern Africa, to seek synergies with existing operations[33]. - The strategy of "Improvement on Cobalt and Maintaining Growth on Copper" aims to significantly reduce production costs based on 2018 figures while increasing production and sales[33]. - The Group plans to continue monitoring cobalt price performance to adjust marketing strategies accordingly[30]. Mineral Resources and Reserves - Copper and cobalt reserves increased significantly to 1,162kt and 191kt respectively, representing increases of 140% and 635% compared to 2017[23]. - As of December 31, 2018, the total Copper-Cobalt Resources amounted to 67.2 million tons with an average grade of 2.5% Cu and 0.6% Co, containing 1,646 kt Cu and 374 kt Co[85]. - The total copper-cobalt reserves as of December 31, 2018 were 27.2 million tons with an average grade of 2.9% Cu, containing 780 kt Cu and 191 kt Co[89]. - The company has shown a consistent increase in total resources from 2017 to 2018, reflecting a growth in both copper and cobalt reserves[89]. - The increase in mineral reserves is attributed to the addition of the Musonoi Project and the optimized mining strategy for Kinsenda, which now includes the Kinsenda East Mine in its production schedule[93]. Leadership and Governance - Mr. Gao Tianpeng has been the CEO and Executive Director since August 2017, with 26 years of experience in cost management, financial management, and risk management at Jinchuan Group[151]. - The company has a strong leadership team with diverse expertise in finance, engineering, and mining operations, enhancing its strategic decision-making capabilities[155]. - The independent directors bring a wealth of experience from various industries, which can aid in strategic planning and market expansion[161]. - The company emphasizes the importance of independent oversight in its operations and decision-making processes[164]. Shareholder and Financial Structure - The company issued 7,776,120,000 ordinary shares during the year, representing approximately 61.66% of the enlarged issued share capital, following the conversion of PSCS valued at $996,938,461[135]. - The issued share capital increased to 12,609,873,051 shares after the allotment and issue of new ordinary shares[136]. - The company aims to leverage additional funding from share subscriptions to strengthen its financial position and enhance liquidity for internal operations[137]. - The Group's gearing ratio decreased to 34.9% as of December 31, 2018, from 47.8% in 2017, attributed to reduced bank borrowings and increased net assets[141].