In 2020, under extremely difficult circumstances, Zijin Mining achieved leapfrogging growth. We managed to deliver better-than-expected results despite the COVID-19 pandemic. Today, we are welcoming 2021. On behalf of Zijin Mining Group, I would like to extend sincere greetings to our employees based across the world, their families, our partners, and members of our local communities. In particular, I salute the “Zijin heroes”- employees who have stayed on their jobs during the pandemic, and those who braved the virus to go work in their positions. And a happy new year to all governments, investors and friends from all walks of life. Thank you for your interest in Zijin Mining, and for the support and help you provide to us.
2020 has been an incredibly extraordinary year
The COVID-19 pandemic, the biggest “black swan” event we have seen, has hit the world really hard, and will leave a far-reaching impact. Against the backdrop of the pandemic and a global economic recession, our Group’s new senior management team executed the strategy of “deepening reform for leapfrogging growth and sustainable development”, and led our employees to forge ahead against all odds. Thanks to their efforts, our gold production remains high, and there are signs of explosive growth in mined copper. Our Group has seen a steady rise in competitiveness among our global peers, with our operations and management becoming more internationalized. And our main business indicators have risen to higher-than-expected levels. The value of our Group has been highly recognized in the market, with our market cap doubling. It demonstrates our strong ability to withstand risks, and our huge growth potential.
Our gold and copper reserves have increased significantly - the Buriticá gold mine and the Guyana gold mine we bought began production within the year; in fact, they are already generating revenue. The acquisition of Qulong Copper Mine, the largest of its kind in China, puts Zijin in an unrivalled leading position in the Chinese copper mining industry. In terms of resource reserves, we now control over 2300 tonnes of gold, more than 62 million tonnes of copper, and about 10 million tonnes of zinc and lead. They constitute a solid basis for our future leapfrogging growth.
We have achieved much through our “Project Construction Year” campaign. The Buriticá gold mine in Colombia began production after construction was completed. The Aurora Gold Mine in Guyana resumed production. The technical upgrade project for the capacity of 10, 000 tonnes per day at Longnan Zijin Gold Mine has been completed and is in production. Technical upgrades to gold mines held by Guizhou Zijin Mining, Shanxi Zijin Mining, Norton Gold Fields of Australia, and AGM of Guyana, which are our additional sources of gold, have been kicked off. The construction of the Kakula Copper Mine in the Democratic Republic of the Congo is ahead of schedule. Underground development of the Upper Zone of the Timok Copper-gold mine in Serbia is encouraging. Technical upgrades to copper mines at Serbia Zijin Copper Doo Bor are picking up pace. Tibet Julong Copper had a “rebirth” under our watch, with all of its preceding construction activities resumed.
We held our 6th Science and Technology Symposium, with the participation of high-level delegates. We also hosted the first Forum on Innovation and Sustainable Development for the Chinese Mining Industry. Our unique “Five in One” mining model, a holistic approach to geological exploration, extraction, mineral processing, smelting and environmental protection, has had a wide-ranging impact in the sector. A number of our research findings have been highly recognized in the industry. Our comparative advantages in technology, which are driven by innovation, continue to be strengthened.
As a public company, we are committed to increasing the quality of our business, and creating value for investors. Our Group’s recognition and influence in the capital market have increased significantly. Our market cap now totals more than RMB 230 billion, doubling that from the beginning of the year. We issued RMB 6 billion in convertible bonds in the A-share market. On the basis of international standards, we have been building our environmental, social and governance (ESG) system from top to bottom. Our capability for sustainable development has been increased significantly, and we are making our mines greener and more environment-friendly.
We have strengthened coordination among our board of directors, board of supervisors and senior management. We have been pushing for the establishment of a globalized operations and management system that is “lean, well-structured, and efficient”. This has brought about marked improvements to our corporate governance, management efficiency and overall vitality. We have been active in fulfilling our corporate social responsibilities. Our concept of common development has been widely recognized - the winning of “Sixth National Civilized Entity” award is a testimony of this.
The world is undergoing momentous changes unseen in a century. The COVID-19 pandemic is still raging. As such, the world economic situation is complicated and unpredictable. The headwinds of de-globalization have resulted in many uncertainties in the economy. The world economy is highly likely to suffer a slowdown or even a recession. The Chinese government is promoting a new development dynamic, in which the domestic economy is the mainstay, and domestic and international markets reinforce each other. The Chinese economy is transitioning from rapid growth to high-quality development. With a massive market, China is still a resilient economy.
With the roll-out of vaccines, mankind is expected to prevail over the pandemic. China will continue to be a key driver for global recovery. Ultra-loose global monetary policies have heightened risk-averse sentiments in the market. Mineral resources, the “food” for industries, have seen their prices surge in the post-pandemic era. New materials and new energy industries, which contributes to the de-carbonization movement, are developing rapidly. As a result, prices of metals required by these sectors are rebounding; gold and copper prices are also expected to remain high. However, the current price hikes are linked to the over-supply and depreciation of money, caused by rising uncertainties in the global economy. The probability of stagflation is high. To a large extent, there is a financial and economic crisis brewing. We must take risk management seriously, and shouldn’t become over-confident as the prices of our main metal products run high.
2021 is the first year for us to implement our Reform Plan, in order to build a globalized operations and management system. It is also a crucial year in our push for leaping growth.
Time and tide wait for no man. We will seize the day.
——Carry out the Reform Plan, and deliver substantial results in the initial establishment of a globalized operations and management system.
On the basis of building a world-class metals and mining companies and our “three-step” timetable for further reform, we will put in place a leading, globalized operations and management system. This reform is going to be unprecedented in depth and breadth. We must see it through with unprecedented determination and courage, like a hero slashing his own wrist to rid himself of poison. We must break traditional “boundaries” to unleash the vitality of our organization, take the lead in carrying out the reform, and set a good example.
——Achieve leapfrogging growth by making good use of resources.
Positive expectations for post-pandemic recovery, and extremely loose monetary policies, will provide strong support for the prices of gold and base metals. We will take effective measures to finish a number of major construction projects, so that they can start producing on or ahead of schedule, and reach full capacity or meet required standards. On the other hand, we will work to maximize the output of major products from existing operations. The aim is to contribute to the leapfrogging of our business performance this year and next year. At the same time, we will allocate resources globally and add strategic mineral resources, through more active exploration activities, and efforts aimed for major breakthroughs in discovering mines.
——Keep our investment and financing system - our strategic backing - healthy and efficient by working with capital markets.
With a view to increasing the quality of our business, we will better engage with domestic and international capital markets, and build a capital platform that supports multiple models. We want to further synergize our business segments with capital markets. Meanwhile, we will expand financing channels in China and overseas, and see to it that our corporate valuation rally and rise. We will improve our capabilities in the management and use of capital, and take risk prevention and control very seriously. Further, we will optimize the management of our own finances and that of financial capital.
——Develop a R&D system and a digital system that meet our needs through innovation.
We will leverage our comparative competitiveness, gained through proprietary exploration and development of low-grade, refractory minerals, to develop and adopt low-cost underground mining technologies for large-scale mining, which will be mainly based on the caving method. This will provide key technologies and solve practical problems that hinder our own development and that of the industry. We will invest in tech firms closely linked to our businesses. We will also invest more in science and technology, and develop our global competitiveness by increasing our research and development capabilities to meet our needs for globalized operations. We will continue to develop our IT systems, and introduce innovative mining technology, equipment and development models. We will further integrate information technology and digital applications into our production, operations and management system. The purpose of these initiatives is to boost the quality and efficiency of our development.
——Break the skills bottleneck in our globalized operations by stepping up the training and hiring of talent.
With a global vision, we will step up the training and hiring of talent needed for globalized operations. We will strive to make up for the talents shortage within 3 to 5 years. On the basis of market norms, we will improve our employee appraisal system, to foster competition and add the survival-of-the-fittest element; we will also work to boost the vitality of our organization, and motivate our staff. We will put in place a globalized human resources system that puts value creators first. We will pay close attention to the development of our team of skilled workers, helping them to realize their own value and to meet their aspirations for a better life. The value creators will have a more rewarding and fulfilling career working with us, and will get a stronger sense of belonging.
——Build an environmental, social and governance (ESG) system in accordance with international standards, and celebrate our fine corporate culture.
We will put in place an ESG system that gives priority to key indicators, including environmental protection, occupational health and safety, human rights protection, supervision and the fight against corruption, responsible supply chains, and social contributions. We will build and operate a new type of mines on the basis of green development. Protecting lives and the environment is both a minimum standard that must be met, and a red line that we can’t cross. We will continue to improve our level of inherent safety, and build an international brand name underpinned by green and eco-friendly practices. Following the principles of “mining with a social vision” and common development, we will foster an ecosystem of co-dependence and coexistence, allowing governments and local communities where our projects are located, as well as our employees, investors, and other stakeholders, to benefit from our Group’s existence.
Zijin Mining is committed to becoming a world-class metals and mining company with global competitiveness. We are in the first phase of a new leapfrogging period. The road ahead is long, and full of challenges. Building on our sound development, we will stay determined, pull together, become more innovative, and take the challenge head on. We are confident that we will deliver excellent results that could withstand the test of the times and of the history, and that meet the expectations of the society at large.
紫金礦業 董事長 陳景河