Low Degree of Self-sufficiency Restrains Top Copper Companies from Making a Prof

According to the Annual Report 2011 of China’s 3 major listed companies engaging in copper smelting, i.e., JXCC, TNMG and Yunan Copper Co., Ltd., in despite of the outstanding achievements of the 3 enterprises, China relies heavily on importing copper resources from foreign countries.

In 2011, JXCC realized net profit of RMB 6.549 billion attributable to shareholders of the parent company, up 33.47% y-o-y. TNMG realized net profit of RMB 1.432 billion attributable to shareholders of the listed company, up 58.11% y-o-y, and Yunan Copper Co., Ltd. realized net profit of RMB 0.622 billion attribut-able to shareholders of the listed company, up 31.68% y-o-y.

According to statistics of China Nonferrous Metals Industry Association, in 2011, China’s refined copper output stood at 5,196,900 tons;copper concentrate output stood at 1,267,200 tons (metal volume), and domestic mineral copper accounted for 24.38%. All of the above values are higher than the values disclosed in the annual reports of JXCC, Yunan Copper Co., Ltd. and TNMG.

In 2011, the total output of refined copper of the 3 key copper smelting enterprises, i.e.,JXCC, Yunan Copper Co., Ltd. and TNMG,accounted for 41.8% of that of China, while the output of copper ores accounted merely for 25% of that of China. Therefore, the situation made the 3 enterprises’ operating profit ratio of copper products remain less than 10%. The operating profit ratio of copper products of TNMG (the proportion of self-owned copper of TNMG is the lowest amongst of the 3 enterprises) was merely 1.65%, which presents a sharp contrast to 85.57%, the operating profit ratio of copper concentrate shown in the previous annual report of West Resources.

In addition, according to the output plan of 2012 of the 3 enterprises, the output of refined copper increases by 15% y-o-y, while the output of self-produced copper is less than 1%.SMM considers that domestic copper smelting enterprises still need to make greater efforts in terms of integration of domestic mineral resources and purchase of foreign copper resources in the future.