Financial Performance - In the first half of 2022, the company achieved revenue of $2,206.9 million, an increase of 4.6% year-on-year[14]. - The net profit attributable to shareholders for the first half of 2022 was $196.2 million, a decrease of 17.7% year-on-year[14]. - The group's revenue for the first half of 2022 was $2,206.9 million, an increase of 4.6% year-on-year, while profit attributable to owners decreased by 17.7% to $196.2 million due to production declines and copper price volatility[18]. - The sales revenue from cathode copper was $639.9 million, a 36.7% increase from $468.2 million in the same period of 2021, driven by increased sales volume and average price[37]. - The gross profit for the first half of 2022 was $531.0 million, a decrease of 14.2% from $618.6 million in the same period of 2021, with a gross margin decline from 29.3% to 24.1%[40]. - The total profit for the six months ended June 30, 2022, was $293,358 thousand, reflecting a decrease from $348,220 thousand in the same period of 2021, a decline of 15.8%[93][94]. Production and Operations - The company produced 201,644 tons of crude copper and anode copper, a decrease of 4.3% year-on-year[15]. - The production of cathode copper reached 71,932 tons, an increase of 22.8% year-on-year[15]. - The production of cobalt hydroxide was 845 tons, a significant increase of 682.4% year-on-year[15]. - The group processed 36,602 tons of copper products, marking a 90.6% increase year-on-year, indicating strong demand for processing services[27]. - The production of sulfuric acid was 522,409 tons, a slight decrease of 0.6% compared to the previous year[27]. - The group achieved a production of 14,710 tons of cathode copper at the newly operational Kambove mine, contributing to overall output[26]. Financial Position - As of June 30, 2022, the group had cash and cash equivalents of $808.2 million, an increase of $201.5 million from $606.7 million as of December 31, 2021[46]. - The total inventory as of June 30, 2022, was $858.8 million, an increase of $10.5 million from $848.3 million as of December 31, 2021, primarily due to an increase in finished goods inventory[47]. - The debt ratio as of June 30, 2022, was 1.8%, significantly down from 16.9% as of December 31, 2021[56]. - Total assets as of June 30, 2022, increased to $4,328,049 thousand from $4,163,984 thousand at the end of 2021, reflecting a growth of 3.9%[84]. - Total liabilities rose to $2,037,655 thousand as of June 30, 2022, compared to $1,992,100 thousand at the end of 2021, marking an increase of 2.3%[84]. Market and Economic Outlook - The international copper price is expected to stabilize in the second half of the year, supported by strong demand from the power and new energy sectors[11]. - The International Copper Study Group (ICSG) forecasts a 4.3% increase in global refined copper production for 2022, with supply growth outpacing demand growth, leading to a decline in copper prices[69]. Corporate Governance and Social Responsibility - The board of directors has committed to maintaining high standards of corporate governance, ensuring effective oversight of legal cases, related transactions, and internal control risks[62]. - The group actively participates in community development and social responsibility initiatives, contributing to local economic growth through job creation and tax revenue[68]. - The group has implemented advanced environmental management practices to enhance resource recycling and pollution control[67]. Employee and Management Information - The group employed a total of 8,874 employees as of June 30, 2022, with 905 from China and 7,969 from Zambia and the Democratic Republic of Congo[63]. - Total employee costs for the six months ended June 30, 2022, were approximately $65.5 million, compared to $54.8 million for the same period in 2021, reflecting a year-over-year increase of 19.8%[63]. - Total compensation for directors and key management personnel was $499 thousand for the six months ended June 30, 2022, down from $632 thousand in the same period of 2021, representing a decrease of approximately 21%[147]. Investment and Capital Expenditure - The total capital expenditure for the first half of 2022 was $34.4 million, a decrease of $87.0 million from $121.4 million in the same period of 2021[49]. - The group has no significant investments or acquisitions during the six months ended June 30, 2022, and no plans for major investments or capital asset purchases[55]. Risk Management - The group faces market risks primarily from commodity price fluctuations, particularly copper, and has entered into futures contracts to mitigate these risks[51]. - The group operates in Zambia and the Democratic Republic of Congo, exposing it to foreign exchange risks, which it manages through hedging activities[52].

Financial Performance - In 2021, the company achieved a total revenue of $4,050.6 million, representing a 56.0% increase compared to 2020[15]. - The net profit for 2021 was $515.4 million, a significant increase of 161.7% year-on-year[13]. - The gross profit for 2021 was $1,085.0 million, up 72.4% from $629.4 million in 2020, with a gross margin increase from 24.2% to 26.8%[22]. - The company reported a net profit attributable to shareholders of $357.1 million in 2021, a 185.7% increase from $125.0 million in 2020, with a profit margin of 8.8%[26]. - Copper and anode copper revenue grew by 62.2% from $1,781.8 million in 2020 to $2,890.6 million in 2021, driven by rising international copper prices and increased sales volume[19]. - The company achieved a revenue of $4,050.6 million in 2021, an increase of 56.0% compared to the previous year[43]. Production and Sales - Total sales of copper and anode copper reached 333,499 tons, up 15.6% from the previous year[13]. - The production of cobalt hydroxide surged by 215.2%, totaling 602 tons in 2021[15]. - The company sold 765,565 tons of sulfuric acid, marking a 43.4% increase year-on-year[13]. - The production of cathode copper increased by 7.3%, reaching 124,327 tons in 2021[15]. - The total production of copper and anode copper reached 324,501 tons, a growth of 26.2% year-on-year, while cathode copper production increased by 7.3% to 124,327 tons[44]. - The total production of copper anodes reached 66,005 tons, representing a year-on-year increase of 64.3%[72]. Cash Flow and Investments - The net cash inflow from operating activities for 2021 was $536.4 million, an increase of 11.2% from $482.5 million in 2020, primarily due to increased profits year-on-year[29]. - The net cash outflow from investing activities for 2021 was $204.4 million, slightly reduced from $210.3 million in 2020, indicating stability in investment spending[29]. - The company plans to invest $238 million in the Kambove mining project, which is expected to lay a solid foundation for future business development[43]. - The total exploration, development, and mining expenses for the year ended December 31, 2021, amounted to approximately $405.32 million[80]. Governance and Compliance - The company aims to enhance its governance and compliance risk management systems[14]. - The company is committed to compliance and operational excellence, as evidenced by the roles of its senior management in overseeing these areas[100][101]. - The company has adopted a strict code of conduct for securities trading, ensuring compliance with regulatory standards[105]. - The audit committee is responsible for monitoring the financial reporting process and the internal control and risk management systems of the group[122]. - The company has established a unified business financial management system across its subsidiaries to enhance data sharing and oversight[150]. Risk Management - The company has implemented a risk management system that integrates risk control into daily operations, continuously improving its risk management capabilities[157]. - The company emphasizes the importance of internal audits and compliance, conducting a special evaluation of its risk management and internal control systems[155]. - The company has established a comprehensive internal control management manual covering organizational structure, development strategy, human resources, social responsibility, and corporate culture[150]. - The company has mechanisms in place for reporting and addressing fraud and compliance issues, ensuring transparency and accountability[150]. Market Outlook and Strategy - The company expects stable copper prices due to a balanced supply-demand situation in the global market[14]. - The global supply-demand balance for commodities is expected to remain tight, providing strong support for commodity prices[87]. - The company plans to expand its market presence in Africa, targeting a 30% increase in resource development projects by 2023[108]. - A strategic acquisition of a local mining firm is in progress, expected to enhance resource capabilities and add $100 million in annual revenue[108]. Human Resources - The total employee cost for the year ended December 31, 2021, was approximately $130.1 million, an increase from $113.7 million in 2020[86]. - The company employed a total of 8,756 employees as of December 31, 2021, compared to 8,352 employees as of December 31, 2020[86]. - The company has established a compliance officer and legal department to ensure adherence to local laws in Zambia and the Democratic Republic of the Congo[191]. Environmental, Social, and Governance (ESG) - The company follows the Hong Kong Stock Exchange's guidelines for ESG reporting, ensuring compliance with mandatory disclosure requirements[169]. - The company is committed to integrating the United Nations Sustainable Development Goals into its sustainable development management processes[184]. - The company adheres to sustainable practices by recycling wastewater and treating sewage to reduce pollution[186]. - The company has implemented internal policies to protect employee rights and ensure equal employment opportunities, including signing agreements with multiple unions[187]. Corporate Structure and Leadership - The company has appointed Liu Jingwei as an independent non-executive director and chairman of the audit committee, with extensive experience in finance and accounting[96]. - The senior management team includes Zhang Jinjun as chairman and president, with over 32 years of experience in the metal industry[100]. - The board of directors includes members with significant experience in various sectors, ensuring a diverse and knowledgeable leadership team[96][97].

Financial Performance - In the first half of 2021, the company achieved revenue of $2,109.6 million, representing a year-on-year increase of 123.8%[16] - The profit attributable to the owners of the company for the first half of 2021 was $238.5 million, a significant year-on-year increase of 914.9%[16] - The total revenue for the first half of 2021 was $2,109.6 million, an increase of 123.8% compared to the same period last year, with profit attributable to owners rising by 914.9% to $238.5 million[22] - The company's gross profit for the first half of 2021 was $618.6 million, a 216.3% increase from $195.6 million in the same period of 2020, with a gross margin rising from 20.7% to 29.3%[43] - The company reported a net cash inflow from operating activities of $369.7 million for the first half of 2021, a significant increase from $69.7 million in the same period of 2020, driven by higher copper prices and sales volume[47] - The company reported a profit and total comprehensive income of $238,543 thousand for the six months ended June 30, 2021, compared to $23,466 thousand for the same period in 2020, indicating a substantial increase of approximately 911.5%[89] - The basic and diluted earnings per share for the period were 6.70 cents, a significant increase from 0.67 cents in the prior year, representing a growth of approximately 900%[86] Production and Capacity - In the first half of 2021, the production of copper anodes and cathodes reached 172,515 tons and 58,570 tons, respectively, representing year-on-year increases of 79.7% and 7.7%[22] - The production of cobalt hydroxide reached 108 tons, marking a year-on-year increase of 12.5%[22] - Sulfuric acid production totaled 525,500 tons, reflecting a year-on-year increase of 59.0%[22] - Liquid sulfur dioxide production increased significantly by 152.0% to 11,977 tons in the first half of 2021[22] - The company processed 19,204 tons of copper products, which is a year-on-year increase of 21.5%[22] - The Kambove Southeast ore body produced 37,091 tons of anode copper, a substantial year-on-year increase of 215.3%[24] - The Luanshya copper smelting project produced 60,066 tons of copper, a remarkable year-on-year increase of 216.5%[28] Investments and Development - The company plans to enhance its copper and cobalt resource development efforts, focusing on high-quality growth[14] - The company aims to strengthen its overseas resource layout and development capabilities, leveraging its international talent[14] - The Kambishi main mine's hydrometallurgical copper project has a planned total investment of $238 million, with 88% of the stripping volume completed as of June 30, 2021[34] - The project is expected to produce 28,000 tons of cathode copper and 978 tons of cobalt hydroxide annually[34] - The company has completed 85% of the tailings treatment system and cobalt precipitation system[34] - The company is actively expanding its cobalt business, with several projects planned to produce cobalt products in the near future[23] Financial Position - As of June 30, 2021, the group had cash and bank balances of $841.2 million, an increase of $343.4 million from $497.8 million on December 31, 2020[49] - Trade receivables measured at amortized cost were $22.1 million, while those measured at fair value were $691.3 million, totaling $713.4 million, up $465.0 million from $248.4 million on December 31, 2020, primarily due to increased copper sales and rising international copper prices[49] - Inventory as of June 30, 2021, was $606.9 million, a decrease of $64.5 million from $671.4 million on December 31, 2020, mainly due to reduced raw material inventory[50] - Total trade payables amounted to $662.3 million, an increase of $237.4 million from $424.9 million on December 31, 2020, driven by increased copper concentrate procurement and rising copper prices[50] - The debt ratio as of June 30, 2021, was 12.8%, a significant decrease from 50.4% on December 31, 2020, calculated based on net debt divided by total equity attributable to shareholders[58] Corporate Governance and Compliance - The group is committed to corporate governance, enhancing internal control systems, and ensuring compliance with relevant regulations[68] - The company has established an audit committee to oversee financial reporting and internal controls, ensuring compliance with applicable accounting standards and regulations[81] - The board believes that the current governance structure, despite deviations from certain codes, is appropriate and will continue to be reviewed for necessary adjustments[68] Market and Risk Management - The group is exposed to market risks including commodity price risk, foreign exchange risk, and interest rate risk, with strategies in place to mitigate these risks[54][55][56] - The company plans to leverage the growing demand for copper and cobalt driven by the renewable energy sector, aligning with the "dual carbon" strategy for long-term development prospects[76] Employee and Operational Insights - As of June 30, 2021, the group employed a total of 8,553 employees, with 880 in China and 7,673 in Zambia and the Democratic Republic of Congo[69] - The total employee cost for the six months ended June 30, 2021, was approximately $54.75 million, compared to $54.4 million for the same period in 2020[69] - The group reported a stable safety production situation in the first half of 2021, with ongoing investments in safety and environmental protection facilities[72] Shareholder and Capital Management - Major shareholder China Nonferrous Mining Development holds 2,600,000,000 shares, representing 69.54% ownership[64] - The company plans to use the net proceeds for project construction, mineral resource acquisitions, and to supplement working capital[61] - The net proceeds from the placement amount to $126,886,000, with $36,000,000 already utilized for project construction and development[62]

Financial Performance - In the first half of 2020, the company achieved revenue of $942.8 million, a decrease of 9.9% year-on-year[13]. - The company reported a profit attributable to shareholders of $23.5 million, a significant decrease of 69.2% year-on-year[13]. - The company reported revenues of $942.8 million for the first half of 2020, down 9.9% from $1,046.3 million in the same period last year[20]. - The profit attributable to the company's owners was $23.5 million, a significant decrease of 69.2% compared to the previous year, primarily due to falling international copper prices and increased foreign exchange losses[20]. - The company achieved a gross profit of $195.6 million in the first half of 2020, a decrease of 14.6% from $229.0 million in the same period of 2019, with a gross margin decline from 21.9% to 20.7%[47]. - The net profit for the period was $44,523 thousand, compared to $121,097 thousand in the prior year, representing a decline of 63.2%[101]. - The company reported a profit and total comprehensive income of $23,466,000 for the six months ended June 30, 2020, significantly lower than $76,315,000 for the same period in 2019[104]. - The company reported a foreign exchange loss of $41,417 thousand for the six months ended June 30, 2020, compared to a loss of $7,512 thousand in the same period of 2019[123]. Production and Operations - The total production of copper and anode copper reached 111,833 tons, while cathode copper production was 54,381 tons, and sulfuric acid production was 330,407 tons[10]. - The company produced 54,381 tons of cathode copper in the first half of 2020, an increase of 10.4% year-on-year[21]. - The company’s sulfuric acid production reached 330,407 tons, a decrease of 6.9% compared to the same period last year[21]. - The production of copper from the Kambove project during the trial production phase was 3,994 tons in the first half of 2020[22]. - The production of copper and anode copper for the six months ended June 30, 2020, was 111,833 tons, a decrease of 10.3% compared to 124,680 tons in the same period of 2019[31]. - The company did not produce any copper concentrate during the six months ended June 30, 2020, representing a 100% decrease from 21,569 tons in the same period of 2019[31]. Investment and Projects - The company has invested $5,046 million in the Huaxin Hydrometallurgy project, which is part of a total planned investment of $52.4 million[17]. - The Lualaba Copper Smelting project commenced production on May 1, 2020, with a designed annual processing capacity of 400,000 tons of copper concentrate[17]. - The company is progressing with the construction of the Kambove project, with a total planned investment of $238 million, and has completed 20% of the stripping volume[17]. - The company invested a total of $8.32 billion in the Kambishi Southeast ore body project, which has an annual design capacity of 3.3 million tons of ore and is expected to produce approximately 58,900 tons of copper concentrate annually[38]. - The Luapula pyrometallurgical project, with a total investment of $470 million, has a design capacity to process 400,000 tons of copper concentrate annually, producing 118,000 tons of copper and 240,000 tons of sulfuric acid[39]. Market and Sales - Sales revenue from copper and anode copper was $614.5 million, down 14.4% from $717.5 million in the first half of 2019, attributed to lower international copper prices[44]. - The company’s cathode copper sales revenue was $270.9 million, slightly down by 0.7% from $272.7 million in the first half of 2019, reflecting a combination of lower prices and increased sales volume[44]. - The company’s revenue from the Chinese market was $199,569,000 for the six months ended June 30, 2020, compared to $367,024,000 for the same period in 2019[113]. - The group reported sales of copper and copper products to related parties totaling $316.27 million for copper anodes and $194.74 million for cathodes in the first half of 2020, compared to $272.7 million and $174.6 million respectively in the same period of 2019[156]. Financial Position - As of June 30, 2020, the company had cash and bank balances of $579.3 million, an increase of $98.1 million from $481.2 million as of December 31, 2019[55]. - The total assets as of June 30, 2020, increased to $3,619,505 thousand from $3,315,531 thousand as of December 31, 2019, marking a growth of 9.2%[102]. - Total liabilities increased to $2,099,595 thousand from $1,779,455 thousand, representing a rise of 18%[103]. - The company’s debt ratio was 76.1%, an increase from 69.7% as of December 31, 2019[66]. - The total capital expenditure for the first half of 2020 was $100.4 million, a decrease of $130.9 million from $231.3 million in the first half of 2019, mainly due to the trial and commercial production of certain facilities[60]. Corporate Governance and Social Responsibility - The company has established a robust internal control system to enhance corporate governance during the reporting period[79]. - The company has a commitment to corporate social responsibility, focusing on employee welfare and a non-discriminatory work environment[84]. - The company actively participated in local community development, contributing to municipal construction and vocational education, receiving high praise from local governments and residents[87]. - The company emphasizes environmental protection and sustainable resource utilization while adhering to governance standards and improving employee conditions[11]. - The company achieved a significant milestone in environmental protection by implementing a circular water usage system for mining and industrial processes[86]. Challenges and Future Outlook - The decline in performance was primarily due to the drop in international copper prices and significant currency fluctuations in Zambia and the Democratic Republic of the Congo[10]. - The company experienced a significant impact on its financial performance due to the COVID-19 pandemic, including a decline in copper prices and project delays[107]. - Despite the COVID-19 pandemic, the company's operations in Zambia and the Democratic Republic of Congo continued to develop steadily, with a positive long-term outlook for copper and cobalt products[88]. - The company plans to increase investment in geological exploration and development, seeking suitable acquisition targets in resource-rich areas to expand its resource base[88].

I. [Company Information](index=3&type=section&id=I.%20Company%20Information) [Company Overview](index=3&type=section&id=Company%20Overview) This section provides the company's basic registration and operational information, including office addresses in Hong Kong, Zambia, and the Democratic Republic of Congo (DRC), and details key governance structure information such as board members, committee composition, company secretary, legal advisors, and auditors - Company's core operating locations are in Zambia and the Democratic Republic of Congo (DRC)[5](index=5&type=chunk) Board of Directors and Committee Members | Name | Position | Committee | | :--- | :--- | :--- | | Mr. Wang Tongzhou | Chairman, Executive Director | Chairman of Remuneration Committee, Chairman of Compliance Committee | | Mr. Wang Xiaowei | Executive Director | - | | Mr. Fan Wei | Executive Director, Vice President | - | | Mr. Zhang Lin | Executive Director, President | - | | Mr. Wang Chunlai | Executive Director, Vice President | - | | Mr. Zhang Jinjun | Vice Chairman, Non-executive Director | Member of Audit Committee, Nomination Committee, Remuneration Committee, Compliance Committee | | Mr. Sun Chuanyao | Independent Non-executive Director | Chairman of Nomination Committee, Member of Compliance and Remuneration Committee | | Mr. Liu Jingwei | Independent Non-executive Director | Chairman of Audit Committee, Member of Nomination Committee | | Mr. Guan Huanfei | Independent Non-executive Director | Chairman of Remuneration Committee, Member of Audit and Compliance Committee | II. [Chairman's Statement](index=5&type=section&id=II.%20Chairman's%20Statement) [Chairman's Statement](index=5&type=section&id=Chairman's%20Statement) The Chairman reviewed 2019 performance, noting efficient production and output growth despite global economic slowdown and low copper/cobalt prices, highlighting significant progress in key projects and expressing confidence in future development amidst the COVID-19 impact, emphasizing new projects will drive growth, and the company remains committed to becoming a leading vertically integrated copper-cobalt producer, prioritizing sustainable development 2019 Key Production Data | Product | Output | YoY Growth | | :--- | :--- | :--- | | Blister copper and anode plates | 234,800 tonnes | +6.5% | | Sulfuric acid | 700,300 tonnes | +17.9% | | Cathode copper | 104,400 tonnes | +7.8% | | Cobalt hydroxide products | 307 tonnes | First production | 2019 Key Financial Data | Metric | Amount | YoY Change | | :--- | :--- | :--- | | Revenue | US$2.009 billion | -2.2% | | Profit attributable to owners | US$135 million | - | | Basic earnings per share | 3.87 US cents | -0.32 US cents | - Key engineering projects achieved significant progress: CNMC Huaxin Hydrometallurgy Expansion Project and Luanshya Copper Smelter Project successfully commenced production; Congo Mining Exploration and Construction Integration Project completed construction preparation[11](index=11&type=chunk) - Looking ahead, the company will achieve sustained, healthy, and rapid development by increasing resource exploration, optimizing value chain management, and promoting digital mine construction, anticipating new growth points from multiple projects commencing production in 2020[12](index=12&type=chunk) III. [Performance Review](index=8&type=section&id=III.%20Performance%20Review) [Performance Review](index=8&type=section&id=Performance%20Review) This section summarizes core operating performance and project progress in 2019, where despite increased production for most products, full-year revenue and profit slightly declined due to falling copper prices, and concurrently, the company steadily advanced several key mining and smelting projects, laying the foundation for future capacity expansion 2019 Operating Performance Summary | Metric | 2019 | 2018 | Change | | :--- | :--- | :--- | :--- | | Revenue | US$2,008.7 million | US$2,053.3 million | -2.2% | | Profit attributable to owners of the company | US$134.9 million | US$146.3 million | -7.8% | 2019 Major Product Output Changes | Product | 2019 Output | YoY Change | | :--- | :--- | :--- | | Copper in concentrate | 20,536 tonnes | -44.8% | | Blister copper and anode copper | 234,837 tonnes | +6.5% | | Cathode copper | 104,404 tonnes | +7.8% | | Sulfuric acid | 700,303 tonnes | +17.9% | | Copper-cobalt alloy | 258 tonnes | -77.3% | - Multiple key projects progressed steadily, with Chambishi Southeast Ore Body Project and Luanshya Copper Smelter Project entering trial production, and CNMC Huaxin Hydrometallurgy Expansion Project commencing production in Q1 2019[15](index=15&type=chunk) IV. [Management Discussion and Analysis](index=8&type=section&id=IV.%20Management%20Discussion%20and%20Analysis) [Financial Review](index=9&type=section&id=Financial%20Review) In 2019, the Group's total revenue was US$2.009 billion, a 2.2% YoY decrease, mainly due to falling international copper prices, and despite increased sales of blister and anode copper, their revenue slightly decreased by 1.4% due to lower average selling prices, while cathode copper revenue decreased by 7.3%, sales cost slightly decreased by 0.8% YoY, gross profit decreased by 6.4% to US$468 million, and gross margin fell from 24.4% to 23.3%, with finance costs significantly decreasing by 32.1% due to lower outstanding borrowings, ultimately, profit attributable to owners of the company was US$135 million, a 7.8% YoY decrease 2019 vs 2018 Revenue and Sales Volume Analysis | Product | 2019 Sales Volume (tonnes) | 2019 Average Selling Price (US$/tonne) | 2019 Revenue (US$ thousand) | 2018 Sales Volume (tonnes) | 2018 Average Selling Price (US$/tonne) | 2018 Revenue (US$ thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Blister copper and anode copper | 235,119 | 5,719 | 1,344,641 | 219,932 | 6,199 | 1,363,284 | | Cathode copper | 104,324 | 5,307 | 553,672 | 99,293 | 6,013 | 597,006 | | Sulfuric acid | 493,586 | 224 | 110,406 | 381,554 | 223 | 84,930 | | **Total** | - | - | **2,008,719** | - | - | **2,053,320** | 2019 vs 2018 Gross Profit and Gross Margin Analysis | Product | 2019 Gross Profit (US$ thousand) | 2019 Gross Margin (%) | 2018 Gross Profit (US$ thousand) | 2018 Gross Margin (%) | | :--- | :--- | :--- | :--- | :--- | | Blister copper and anode copper | 133,481 | 9.9% | 161,461 | 11.8% | | Cathode copper | 238,928 | 43.2% | 264,100 | 44.2% | | Sulfuric acid | 96,064 | 87.0% | 70,831 | 83.4% | | **Total** | **468,473** | **23.3%** | **500,532** | **24.4%** | - Profit attributable to owners of the company decreased by **7.8%** from **US$146.3 million** in 2018 to **US$134.9 million** in 2019, with net profit margin declining from **7.1%** to **6.7%**[28](index=28&type=chunk) [Liquidity and Capital Resources](index=12&type=section&id=Liquidity%20and%20Capital%20Resources) In 2019, the Group's net cash inflow from operating activities significantly increased by 79.2% to US$368.7 million, primarily due to reduced raw material purchases, while net cash outflow from investing activities increased by 38.9% to US$420.1 million, mainly for the Luanshya Copper Smelter Project, and financing activities shifted from net outflow to net inflow of US$28.7 million, benefiting from new bank loans, with year-end bank balances and cash standing at US$481.2 million, and the gearing ratio increased from 60.4% to 69.7% 2019 vs 2018 Cash Flow Statement Summary | Item | 2019 (US$ thousand) | 2018 (US$ thousand) | | :--- | :--- | :--- | | Net cash from operating activities | 368,736 | 205,729 | | Net cash used in investing activities | (420,080) | (302,546) | | Net cash from (used in) financing activities | 28,748 | (252,816) | | **Net decrease in cash and cash equivalents** | **(22,596)** | **(349,633)** | | **Cash and cash equivalents at year-end** | **481,210** | **505,091** | - The gearing ratio (net debt/total equity attributable to owners) increased from **60.4%** at the end of 2018 to **69.7%** at the end of 2019[39](index=39&type=chunk) [Capital Expenditure](index=15&type=section&id=Capital%20Expenditure) In 2019, the Group's total capital expenditure reached US$485.1 million, an increase of US$83.5 million from US$401.6 million in 2018, primarily due to new investments in the Luanshya Copper Smelter Project 2019 vs 2018 Capital Expenditure Details | Item | 2019 (US$ thousand) | 2018 (US$ thousand) | | :--- | :--- | :--- | | Pyrometallurgical facilities of Luanshya Copper Smelter | 219,135 | 93,129 | | Chambishi Southeast Ore Body of CNMC Mining | 155,346 | 179,847 | | Hydrometallurgical facilities of CNMC Huaxin Hydrometallurgy | 16,742 | 62,846 | | Others | 93,846 | 65,766 | | **Total** | **485,069** | **401,588** | [Principal Risks and Uncertainties](index=16&type=section&id=Principal%20Risks%20and%20Uncertainties) The Group faces principal risks including the direct impact of copper price fluctuations on business and revenue, commodity price risk, foreign exchange risk, and interest rate risk, and the company mitigates commodity price risk through futures contracts, monitors foreign exchange and interest rate risks, but lacks a systematic hedging policy - Significant fluctuations in **copper product prices** are a major risk, directly impacting the Group's business, cash flow, and revenue, with lower copper prices potentially leading to asset write-offs and production cuts[45](index=45&type=chunk) - The company mitigates commodity price risk by entering into **copper futures trading contracts** and provisional pricing agreements[46](index=46&type=chunk) - Operating in Zambia and the Democratic Republic of Congo (DRC), the Group faces foreign exchange risk primarily from fluctuations of the **Zambian Kwacha, Congolese Franc, and Renminbi against the US Dollar**[47](index=47&type=chunk) - The Group faces cash flow interest rate risk due to **floating-rate bank borrowings**, currently without an interest rate hedging policy[48](index=48&type=chunk) [Business Review](index=17&type=section&id=Business%20Review) This section provides a comprehensive review of 2019 business operations, where as a vertically integrated producer focused on copper-cobalt in Zambia and DRC, the company achieved increased production of major products in 2019, but revenue decreased by 2.2% YoY due to falling copper prices, and the report details updated mineral resources and reserves, production status of major subsidiaries, exploration and development activities, progress of key ongoing projects, and discusses human resources, future outlook, and a proposed restructuring plan at the controlling shareholder level [Overview](index=17&type=section&id=Overview) As a rapidly developing vertically integrated copper producer, the company focuses on copper-cobalt mining, smelting, and sales in Zambia and the Democratic Republic of Congo (DRC), and in 2019, production of blister and anode copper, sulfuric acid, and cathode copper all increased, and cobalt hydroxide was produced for the first time, however, due to falling international copper prices, full-year revenue decreased to US$2.009 billion, a 2.2% YoY decline 2019 Major Product Output | Product | Output | YoY Growth | | :--- | :--- | :--- | | Blister copper and anode copper | 234,837 tonnes | +6.5% | | Sulfuric acid | 700,303 tonnes | +17.9% | | Cathode copper | 104,404 tonnes | +7.8% | | Copper-cobalt alloy | 258 tonnes | -77.3% | | Cobalt hydroxide | 307 tonnes | First production | [Resources and Reserves](index=18&type=section&id=Resources%20and%20Reserves) This section details the mineral resources and reserves data for the Group's major mines (e.g., Chambishi Main Mine, West Mine, Southeast Mine, Mwambashi Mine) as of December 31, 2019, where the data adheres to JORC standards and is compared with 2018 data, with main changes attributed to production depletion and infill drilling Chambishi Main Mine Resources (JORC, Million tonnes) | Resource Category | 2019 Ore Volume | 2019 Copper Grade | 2018 Ore Volume | 2018 Copper Grade | | :--- | :--- | :--- | :--- | :--- | | Proved | 9.18 | 2.31% | 8.03 | 2.19% | | Controlled | 3.30 | 2.68% | 6.68 | 2.33% | | Inferred | 7.32 | 2.44% | 13.79 | 2.26% | Chambishi Southeast Mine Reserves (JORC, Million tonnes) | Reserve Category | 2019 Ore Volume | 2019 Copper Grade | 2019 Cobalt Grade | 2018 Ore Volume | 2018 Copper Grade | 2018 Cobalt Grade | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Proved | 27.08 | 1.91% | 0.09% | 22.44 | 2.00% | 0.10% | | Probable | 16.46 | 1.67% | 0.09% | 18.53 | 1.64% | 0.09% | [Production Status](index=28&type=section&id=Production%20Status) This section details the production operations of major subsidiaries in 2019, where CNMC Mining, CNMC Luanshya, and others shifted their final products from copper concentrate to anode copper or blister copper starting mid-2019, leading to a 44.8% decrease in total copper concentrate output, however, total production of blister and anode copper, cathode copper, and sulfuric acid increased by 6.5%, 7.8%, and 17.9% YoY, respectively, and CNMC Huaxin Hydrometallurgy produced 307 tonnes of cobalt hydroxide for the first time - CNMC Mining, CNMC Luanshya, and Chambishi Hydrometallurgy shifted their final products from copper concentrate to anode copper or blister copper starting mid-2019, which is the main reason for the significant decrease in copper concentrate output[80](index=80&type=chunk)[82](index=82&type=chunk)[84](index=84&type=chunk)[88](index=88&type=chunk) 2019 Group Total Product Output | Product | 2019 Output (tonnes) | 2018 Output (tonnes) | YoY Change (%) | | :--- | :--- | :--- | :--- | | Copper concentrate | 20,536 | 37,205 | (44.8) | | Blister copper and anode copper | 234,837 | 220,479 | 6.5 | | Cathode copper | 104,404 | 96,870 | 7.8 | | Copper-cobalt alloy | 258 | 1,136 | (77.3) | | Cobalt hydroxide | 307 | – | N/A | | Sulfuric acid | 700,303 | 593,983 | 17.9 | [Mineral Exploration, Development and Mining Activities](index=31&type=section&id=Mineral%20Exploration%2C%20Development%20and%20Mining%20Activities) In 2019, several Group subsidiaries actively conducted production and exploration drilling, where CNMC Mining, CNMC Luanshya, and Congo Mining completed extensive drilling and trenching in their respective mining areas to increase resource reserves, and additionally, the Group invested in new infrastructure projects and purchased mining-related equipment - The Group signed new infrastructure project contracts totaling approximately **US$9.78 million** and purchased new mining exploration, development, and mining-related equipment contracts totaling approximately **US$23.57 million** in 2019[94](index=94&type=chunk) - Major subsidiaries conducted detailed exploration activities, for example, CNMC Mining completed **297 underground drill holes** with a total footage exceeding **23,000 meters**; Congo Mining completed **93 drill holes** with a total footage exceeding **13,000 meters**[92](index=92&type=chunk) [Progress of Projects Under Construction](index=33&type=section&id=Progress%20of%20Projects%20Under%20Construction) This section updates the progress of the Group's key projects under construction, where the Chambishi Southeast Ore Body Exploration and Construction Integration Project has entered trial production, the Luanshya Copper Smelter's blister copper smelting project produced blister copper by the end of 2019, CNMC Huaxin Hydrometallurgy's copper-cobalt expansion project commenced production in Q1 2019, and the Congo Mining Exploration and Construction Integration Project completed preliminary preparations and is planned to start in January 2020 - **Chambishi Southeast Ore Body Exploration and Construction Integration Project**: Planned annual output of copper in concentrate approximately **58,900 tonnes**, total investment **US$832 million**, in trial production at the end of 2019[95](index=95&type=chunk) - **Luanshya Copper Smelter Project**: Annual processing capacity of **400,000 tonnes** of copper concentrate, annual output of blister copper approximately **118,000 tonnes**, estimated investment **US$437.6 million**, successfully produced blister copper in November 2019[98](index=98&type=chunk) - **Congo Mining Exploration and Construction Integration Project**: Planned annual output of cathode copper **28,000 tonnes**, crude cobalt hydroxide containing **978 tonnes** of cobalt, total investment **US$238 million**, planned to start in January 2020[99](index=99&type=chunk) [Human Resources](index=35&type=section&id=Human%20Resources) As of the end of 2019, the Group employed 8,188 employees, a significant increase from 6,575 in 2018, and the workforce comprised 870 Chinese employees and 7,318 local Zambian and DRC employees, with total employee costs for 2019 approximately US$103.9 million Human Resources Overview | Metric | 2019 | 2018 | | :--- | :--- | :--- | | Total Employees | 8,188 | 6,575 | | Chinese Employees | 870 | - | | Local Employees | 7,318 | - | | Total Employee Costs | US$103.9 million | US$86.4 million | [2020 Outlook](index=35&type=section&id=2020%20Outlook) Looking ahead to 2020, despite uncertainties from the COVID-19 pandemic, the Group's operations in Southern Africa have been minimally affected, maintaining stable production and operations, and the company is optimistic about the long-term demand for copper and cobalt metals, with future plans including increasing geological exploration and development investment, seeking acquisition targets, and enhancing profitability through optimized management and strict cost control, and concurrently, the focus will be on advancing the construction and production ramp-up of key projects like Chambishi Southeast Ore Body, CNMC Huaxin Mabende Expansion, and Congo Mining, creating new growth points for the company - Despite the impact of the COVID-19 pandemic, the Group's operations in Southern Africa have been minimally affected, and global copper products remain in a tight balance, with long-term copper and cobalt metal prices viewed favorably[101](index=101&type=chunk) - 2020 strategic priorities include: increasing geological exploration (especially in the Congo Mining area), seeking M&A opportunities, optimizing internal value chain management, strict cost control, and focusing on the construction and production ramp-up of key projects[101](index=101&type=chunk)[102](index=102&type=chunk) [Other Information](index=36&type=section&id=Other%20Information) This section discloses a proposed restructuring plan at the controlling shareholder level, where under this plan, CNMC (000758.SZ), also an affiliate of China Nonferrous Metal Mining Group, intends to acquire the company's controlling interest, and upon completion, approximately 74.52% of the company's equity will be directly held by CNMC, but the company's ultimate controlling entity will remain China Nonferrous Metal Mining Group, and its independent listing status in Hong Kong will remain unchanged, with this restructuring subject to shareholder and regulatory approvals - Proposed intra-group restructuring, with controlling interest to be transferred from CNMC Mining Development to CNMC (000758.SZ)[103](index=103&type=chunk) - After restructuring, the company will become a subsidiary of CNMC, but the ultimate controlling entity will remain China Nonferrous Metal Mining Group, and its Hong Kong listing status will remain unchanged[103](index=103&type=chunk) V. [Biographies of Directors and Senior Management](index=36&type=section&id=V.%20Biographies%20of%20Directors%20and%20Senior%20Management) [Board of Directors](index=37&type=section&id=Board%20of%20Directors) This section details the personal biographies of the Board of Directors members, where the Board comprises 9 directors, including 5 executive directors, 1 non-executive director, and 3 independent non-executive directors, and biographies cover each director's age, academic background, professional qualifications, and extensive experience in the nonferrous metals industry and corporate management Board of Directors Members (as of March 24, 2020) | Name | Age | Position/Title | | :--- | :--- | :--- | | Wang Tongzhou | 54 | Chairman and Executive Director | | Wang Xiaowei | 57 | Executive Director | | Fan Wei | 45 | Executive Director and Vice President | | Zhang Lin | 57 | Executive Director and President | | Wang Chunlai | 59 | Executive Director and Vice President | | Zhang Jinjun | 51 | Vice Chairman and Non-executive Director | | Sun Chuanyao | 75 | Independent Non-executive Director | | Liu Jingwei | 52 | Independent Non-executive Director | | Guan Huanfei | 62 | Independent Non-executive Director | [Senior Management](index=43&type=section&id=Senior%20Management) This section introduces the biographies of the company's senior management team members, including the President, Vice Presidents, and Chief Financial Officer, where these executives possess decades of professional experience in the metals industry, mining operations, financial management, engineering project management, and overseas resource development - Senior management comprises the Chairman, President, several Vice Presidents, and Chief Financial Officer, responsible for production operations, project management, resource development, finance, and other core business areas[119](index=119&type=chunk)[120](index=120&type=chunk)[121](index=121&type=chunk) VI. [Corporate Governance Report](index=45&type=section&id=VI.%20Corporate%20Governance%20Report) [Board and Committees](index=46&type=section&id=Board%20and%20Committees) This section elaborates on the company's Board structure, operations, and the functions of its sub-committees, where the Board consists of 9 directors with a diversified structure and has four committees: Audit, Nomination, Remuneration, and Compliance, each performing its duties to ensure a high level of corporate governance, and during the reporting period, the company complied with the Corporate Governance Code, and all directors and committee members actively participated in meetings and fulfilled their responsibilities - The Board comprises **5 executive directors, 1 non-executive director, and 3 independent non-executive directors**, with the roles of Chairman and President (Chief Executive Officer) separated, in compliance with the Corporate Governance Code[126](index=126&type=chunk)[136](index=136&type=chunk) 2019 Board and Committee Meeting Attendance | Name | Board | Audit Committee | Nomination Committee | Remuneration Committee | Compliance Committee | | :--- | :--- | :--- | :--- | :--- | :--- | | Mr. Wang Tongzhou | 3/4 | N/A | N/A | N/A | 1/2 | | Mr. Wang Xiaowei | 4/4 | N/A | N/A | N/A | N/A | | Mr. Zhang Lin | 4/4 | N/A | N/A | N/A | N/A | | Mr. Wang Chunlai | 4/4 | N/A | N/A | N/A | N/A | | Mr. Zhang Jinjun | 3/3 | 1/1 | N/A | 1/1 | N/A | | Mr. Sun Chuanyao | 4/4 | N/A | 1/1 | 2/2 | 2/2 | | Mr. Liu Jingwei | 4/4 | 2/2 | 1/1 | N/A | N/A | | Mr. Guan Huanfei | 4/4 | 2/2 | N/A | 2/2 | 2/2 | - The company has four committees: Audit, Nomination, Remuneration, and Compliance, with clear terms of reference, responsible for overseeing financial reporting, internal controls, director nominations, remuneration policies, and compliance matters[140](index=140&type=chunk)[141](index=141&type=chunk)[144](index=144&type=chunk)[152](index=152&type=chunk)[156](index=156&type=chunk) [Risk Management and Internal Control](index=58&type=section&id=Risk%20Management%20and%20Internal%20Control) This section details the Group's risk management and internal control system, where the Board is ultimately responsible for this system and oversees it through the Audit and Compliance Committees, and the company adopted a five-component framework (internal environment, risk assessment, control activities, information and communication, internal supervision) referencing the COSO model to build its internal control system, and in 2019, the company conducted an overall review and deemed its risk management and internal control systems effective and adequate, strengthening organizational structure, key risk prevention, and information management - The Board acknowledges its responsibility for maintaining a sound and effective internal control system and reviews its effectiveness at least annually, covering financial, operational, compliance, and risk management aspects[160](index=160&type=chunk) - The company's risk management and internal monitoring model references the **COSO framework**, comprising five elements: internal environment, risk assessment, control activities, information and communication, and internal supervision[168](index=168&type=chunk) 2019 Major Risk Status Changes | Risk Category | Risk Change Description | 2019 Risk Change | | :--- | :--- | :--- | | Political Environment | Political environment in Zambia and DRC relatively stable | Decreased | | Operating Environment | Changes in mining tax policies brought adverse effects, company responded through toll processing model | Maintained | | Product Prices | Copper prices decreased YoY, but supply remains tight | Maintained | | Raw Material Supply | Some companies have low self-sufficiency in resources, supply ensured through various methods | Maintained | | Production Management | Luanshya Copper Smelter and other projects commenced production, expanding product scope | Decreased | | Asset Management | Copper price decline increased asset impairment risk, but new projects commencing production reduced construction pressure | Maintained | | Foreign Exchange Management | Kwacha continuously depreciated against US Dollar, causing adverse effects | Increased | | Legal Proceedings | Litigation persists but is well-managed | Maintained | [Communication with Shareholders and Investors](index=68&type=section&id=Communication%20with%20Shareholders%20and%20Investors) The Group highly values communication with shareholders and investors, committed to enhancing transparency, and through annual general meetings, individual meetings, the company website, and investor relations specialists, it ensures smooth two-way communication, and the company strictly adheres to disclosure requirements, promptly publishes performance reports and inside information, and adopted a dividend policy to standardize dividend distribution procedures - The Group maintains good communication with shareholders and investors through various channels, including **annual general meetings, investor relations specialists, and the company website**[181](index=181&type=chunk) - The company adopted a **dividend policy** in March 2019, where dividend decisions will comprehensively consider the Group's financial performance, capital needs, distributable reserves, and other factors[184](index=184&type=chunk) VII. [Environmental, Social and Governance Report](index=71&type=section&id=VII.%20Environmental%2C%20Social%20and%20Governance%20Report) [Excellent Management](index=74&type=section&id=Excellent%20Management) This section elaborates on the company's management framework, emphasizing compliant operations, integrity building, product quality, and R&D innovation, where the company strictly adheres to laws and regulations in its operating locations, establishing comprehensive internal management systems and anti-corruption mechanisms, and regarding product responsibility, the company references ISO 9001 standards to ensure quality control throughout the entire process from mining to sales, and additionally, the company values technological R&D, encouraging innovation to enhance resource utilization and core competitiveness - The company strictly complies with laws and regulations in **China, Zambia, and the Democratic Republic of Congo (DRC)**, and has established a compliance officer and a legal and compliance affairs department to ensure the legality and compliance of overseas operations[198](index=198&type=chunk)[199](index=199&type=chunk) - The Group strictly prohibits corruption, has formulated systems such as the **"Anti-Fraud Work Regulations"**, and implements strict management measures in key areas like bidding and procurement, with no related lawsuits occurring during the reporting period[201](index=201&type=chunk) - Product quality management references the **ISO 9001 system**, with anode copper and copper concentrate products inspected according to national standards, and no complaints or lawsuits regarding product quality, health, safety, or privacy occurring during the reporting period[203](index=203&type=chunk) [Safe Development](index=79&type=section&id=Safe%20Development) This section emphasizes the company's "safety first" production policy, where the company strictly complies with mining and factory safety regulations in its operating countries, establishing a comprehensive safety management system from management organization to emergency management, education and training, and occupational health protection, and through implementing standard operating procedures, regular safety inspections, contractor safety management, and organizing emergency drills and safety training, it strives to achieve a "zero harm" goal, with no work-related fatalities occurring during the reporting period - The company established a **"three-level" safety training system** for enterprise, workshop, and team levels, and regularly conducts "Safety Production Month" activities and emergency drills to enhance employee safety awareness and skills[212](index=212&type=chunk)[218](index=218&type=chunk)[219](index=219&type=chunk) - The company provides employees with complete **personal protective equipment**, offers occupational health examinations, and has formulated detailed work injury accident management procedures and emergency plans[216](index=216&type=chunk) - During the reporting period, the Group had **no work-related fatalities**[217](index=217&type=chunk) [People-Oriented](index=85&type=section&id=People-Oriented) This section elaborates on the company's people-oriented talent philosophy, where the company strictly complies with labor laws, prohibits child and forced labor, with a 100% labor contract signing rate, and the company implements a "talent internationalization and localization" strategy, respects employee diversity, and provides competitive compensation and fair promotion mechanisms, and additionally, the company emphasizes employee training and development, and enhances employee belonging through various benefits and care activities, such as providing medical coverage, enriching cultural and sports activities, and sponsoring children of employees for overseas study - The company strictly complies with labor laws, firmly prohibits the use of **child labor and forced labor**, and achieved a **100% labor contract signing rate** during the reporting period[226](index=226&type=chunk) - The company established a **multi-level training model** for employees and set up a "Self-Taught Talent Award" to encourage employees to enhance their professional capabilities[229](index=229&type=chunk) - The company actively conducts employee care activities, including providing **medical services** for employees and their families, building sports facilities, organizing holiday events, and offering **scholarships for outstanding employees' children to study in China**[231](index=231&type=chunk)[232](index=232&type=chunk) [Green Development](index=91&type=section&id=Green%20Development) This section elaborates on the company's environmental philosophy and practices, where the company strictly complies with environmental regulations in its operating locations and has formulated internal environmental management procedures, and regarding pollution control, the company implements source control and recycling measures for exhaust gas, wastewater, and solid waste, such as "zero" wastewater discharge in hydrometallurgy and dust removal equipment in pyrometallurgy, and in terms of resource utilization, the company strives to improve resource efficiency and reduce energy and water consumption through process improvements and energy-saving measures, with no environmental violations occurring during the reporting period 2019 Major Emissions Data | Emission Type | Value | Unit | | :--- | :--- | :--- | | Sulfur Oxides (SO2) | 4,293.8 | tonnes | | Nitrogen Oxides (NOx) | 13.5 | tonnes | | Dust | 827.5 | tonnes | | Greenhouse Gas Emissions | 168,928.11 | tonnes | | Hazardous Waste Generated | 5.022 | million tonnes | | Non-hazardous Waste Generated | 25.538 | million tonnes | 2019 Major Resource Consumption Data | Resource Type | Value | Unit | | :--- | :--- | :--- | | Diesel | 22,603,439.9 | liters | | Purchased Electricity | 1,122,848.4 | MWh | | Comprehensive Energy Consumption (standard coal equivalent) | 182,908.0 | tonnes of standard coal | | Fresh Water Consumption | 14.184 | million tonnes | - The company achieves a win-win for environmental protection and economic benefits through technological improvements, for example, Chambishi Hydrometallurgy's recycling of tailings liquid increased revenue by **US$1.3165 million** for the year[247](index=247&type=chunk) [Community Contribution](index=96&type=section&id=Community%20Contribution) Adhering to the philosophy of "cooperation and win-win, common development," the company actively fulfills its social responsibilities, and by establishing a Public Relations Department, it strengthens communication with local governments and communities, and in 2019, the company invested significant support in infrastructure, education, and healthcare in project areas, donating materials and cash equivalent to US$1.43 million to improve community public facilities, donate ambulances, fund school construction, and support impoverished students, establishing a positive corporate image - During the reporting period, the Group donated materials and cash equivalent to **US$1,430,000** to communities through direct and indirect means[250](index=250&type=chunk) - Specific community contribution projects include: donating ambulances and X-ray machines to the Kalulushi area, sponsoring students at Copperbelt University, donating desks and chairs for a newly built secondary school, funding the construction of teaching areas for Chishilano Primary School, and donating living and learning supplies to orphanages[251](index=251&type=chunk)[252](index=252&type=chunk)[253](index=253&type=chunk) VIII. [Directors' Report](index=99&type=section&id=VIII.%20Directors'%20Report) [Business and Performance](index=100&type=section&id=Business%20and%20Performance) This section outlines the company's core business, performance, dividend policy, and future prospects, where the company's main business is the exploration, mining, and sale of copper and related products, and the report discloses a change in the use of proceeds from the global offering, reallocating US$37 million originally for acquisitions to the Congo Mining project construction, and the Board recommends a final dividend of 0.7740 US cents per share, and the company emphasizes the importance of environmental protection and confirms compliance with relevant laws and regulations - The company decided to reallocate **US$37 million** from the global offering proceeds, originally designated for acquisitions, to the **Congo Mining exploration and construction integration project**[258](index=258&type=chunk)[260](index=260&type=chunk) - The Board recommends a final dividend of **0.7740 US cents per share** for the year ended December 31, 2019[261](index=261&type=chunk) - After the reporting period, the COVID-19 pandemic erupted, but as of the report approval date, the company assessed that the pandemic had no significant adverse impact on its financial position and operating results[268](index=268&type=chunk) [Major Customers, Suppliers and Connected Transactions](index=105&type=section&id=Major%20Customers%2C%20Suppliers%20and%20Connected%20Transactions) This section discloses the company's major customers, suppliers, and connected transactions, where in 2019, sales to the top five customers accounted for 85.2% of total sales, with the largest customer accounting for 45.3%, indicating high customer concentration, and purchases from the top five suppliers accounted for 52.2% of total purchases, and the report details non-exempt continuing connected transactions with controlling shareholder China Nonferrous Metal Mining Group, Yunnan Copper Group, and other related parties, confirming compliance with listing rules and that transaction amounts did not exceed annual caps - High customer concentration: Sales to the **top five customers accounted for 85.2%** of total sales, with the largest customer (Retained Group) accounting for **45.3%**[275](index=275&type=chunk) - Relatively high supplier concentration: Purchases from the **top five suppliers accounted for 52.2%** of total purchases, with the largest supplier accounting for **21.7%**[276](index=276&type=chunk) 2019 Major Continuing Connected Transactions Execution Status | Transaction Type | Connected Party | 2019 Actual Amount (US$) | 2019 Annual Cap (US$) | | :--- | :--- | :--- | :--- | | Sale of copper products | Retained Group | 915,961,000 | 2,550,200,000 | | Sale of copper products | Yunnan Copper Group | 412,194,000 | 934,800,000 | | Purchase of ore | Mabende Mining | 32,112,000 | 80,000,000 | | Purchase of raw materials, products and services | Retained Group | 321,378,000 | 621,550,000 | | Sale of raw materials, products and services | Retained Group | 35,305,000 | 639,853,000 | | Purchase of copper concentrate | CNMC Singapore | 155,364,000 | 189,930,000 | IX. [Independent Auditor's Report](index=117&type=section&id=IX.%20Independent%20Auditor's%20Report) [Independent Auditor's Report](index=117&type=section&id=Independent%20Auditor's%20Report) Deloitte Touche Tohmatsu, as independent auditor, issued an unmodified opinion on the company's consolidated financial statements for the year ended December 31, 2019, where the report states that the financial statements present a true and fair view of the Group's financial position, performance, and cash flows, and have been properly prepared in compliance with Hong Kong Financial Reporting Standards and the Hong Kong Companies Ordinance, and the report specifically highlighted "Impairment assessment of property, plant and equipment of CNMC Mining" as a key audit matter - Auditor's opinion: Deloitte issued an **unmodified opinion**, stating that the financial statements are true and fair[306](index=306&type=chunk) - Key audit matter: The identified key audit matter is **"Impairment assessment of property, plant and equipment of CNMC Mining"**, as its assessment involves significant management judgment and estimates, especially with copper prices lower than expected[308](index=308&type=chunk)[309](index=309&type=chunk) X. [Audited Consolidated Financial Statements](index=122&type=section&id=X.%20Audited%20Consolidated%20Financial%20Statements) [Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=123&type=section&id=Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the year 2019, the Group's revenue was US$2.009 billion, a 2.2% decrease from US$2.053 billion in 2018, and gross profit was US$468 million, a 6.4% YoY decrease, with profit before tax at US$324 million, largely stable compared to the previous year, and due to increased income tax expense, profit for the year decreased to US$225 million, with profit attributable to owners of the company at US$135 million, a 7.8% YoY decrease, and basic earnings per share at 3.87 US cents 2019 Consolidated Statement of Profit or Loss Summary | Metric (US$ thousand) | 2019 | 2018 | | :--- | :--- | :--- | | Revenue | 2,008,719 | 2,053,320 | | Gross profit | 468,473 | 500,532 | | Profit before tax | 324,035 | 323,861 | | Income tax expense | (99,521) | (79,883) | | Profit for the year | 224,514 | 243,978 | | Profit attributable to owners of the company | 134,874 | 146,260 | | Basic earnings per share (US cents) | 3.87 | 4.19 | [Consolidated Statement of Financial Position](index=124&type=section&id=Consolidated%20Statement%20of%20Financial%20Position) As of December 31, 2019, the Group's total assets were US$3.316 billion, a 17.0% increase from US$2.833 billion in 2018, mainly due to increased non-current assets like property, plant, and equipment, and total liabilities were US$1.779 billion, a 15.8% YoY increase, with non-current liabilities significantly rising due to increased bank and other borrowings, and total equity increased by 18.5% to US$1.536 billion 2019 Year-end Consolidated Statement of Financial Position Summary | Metric (US$ thousand) | December 31, 2019 | December 31, 2018 | | :--- | :--- | :--- | | **Assets** | | | | Non-current assets | 1,911,091 | 1,435,165 | | Current assets | 1,404,440 | 1,397,840 | | **Total assets** | **3,315,531** | **2,833,005** | | **Equity and Liabilities** | | | | Total equity | 1,536,076 | 1,296,555 | | Non-current liabilities | 997,553 | 614,118 | | Current liabilities | 781,902 | 922,332 | | **Total liabilities** | **1,779,455** | **1,536,450** | | **Total equity and liabilities** | **3,315,531** | **2,833,005** | [Consolidated Statement of Changes in Equity](index=126&type=section&id=Consolidated%20Statement%20of%20Changes%20in%20Equity) As of the end of 2019, equity attributable to owners of the company increased from US$908 million at the beginning of the year to US$1.014 billion, where this growth primarily stemmed from the year's profit of US$135 million, partially offset by declared dividends of US$29.25 million, and non-controlling interests also increased from US$388 million to US$522 million, mainly due to profit allocation for the year and capital contributions from non-controlling shareholders 2019 Equity Changes Summary (US$ thousand) | Item | Equity attributable to owners of the company | Non-controlling interests | Total equity | | :--- | :--- | :--- | :--- | | **As at December 31, 2018** | **908,182** | **388,373** | **1,296,555** | | Profit for the year | 134,874 | 89,640 | 224,514 | | Dividends declared | (29,252) | (14,400) | (43,652) | | Capital contribution from non-controlling shareholders | – | 58,659 | 58,659 | | **As at December 31, 2019** | **1,013,804** | **522,272** | **1,536,076** | [Consolidated Statement of Cash Flows](index=127&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) In 2019, the Group generated net cash inflow of US$369 million from operating activities,同比大幅增長, and net cash outflow from investing activities was US$420 million, primarily for the acquisition of property, plant, and equipment, and financing activities generated net cash inflow of US$28.75 million, mainly from new bank loans, and overall, year-end cash and cash equivalents slightly decreased from US$505 million to US$481 million 2019 Cash Flow Statement Summary (US$ thousand) | Item | 2019 | 2018 | | :--- | :--- | :--- | | Net cash from operating activities | 368,736 | 205,729 | | Net cash used in investing activities | (420,080) | (302,546) | | Net cash from (used in) financing activities | 28,748 | (252,816) | | Net decrease in cash and cash equivalents | (22,596) | (349,633) | | Cash and cash equivalents at year-end | 481,210 | 505,091 | [Notes to the Consolidated Financial Statements](index=129&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The notes to the financial statements provide detailed explanations of accounting policies, key accounting judgments and estimates, and a breakdown of various items in the financial statements, where key contents include the impact of the first-time application of HKFRS 16 "Leases," segment information, impairment assessment of property, plant and equipment, financial instrument risk management, detailed related party transactions, and capital commitments - The company first applied **HKFRS 16 "Leases"** this year, adopting the modified retrospective approach, recognizing **US$8.041 million** in right-of-use assets and corresponding lease liabilities as of January 1, 2019[325](index=325&type=chunk)[328](index=328&type=chunk)[329](index=329&type=chunk) - Segment information shows that the **Smelting segment contributed the majority of revenue (US$1.455 billion)**, but the **Hydrometallurgy segment's profit (US$146 million) was significantly higher** than the Smelting segment's (US$89.68 million)[386](index=386&type=chunk) - Due to actual copper prices being lower than expected, management performed an impairment assessment on CNMC Mining's property, plant and equipment with a carrying amount of **US$787 million**, concluding that no further impairment was required[421](index=421&type=chunk) XI. [Five-Year Financial Summary](index=230&type=section&id=XI.%20Five-Year%20Financial%20Summary) [Five-Year Financial Summary](index=230&type=section&id=Five-Year%20Financial%20Summary) This section provides a summary of key financial data for the Group's five consecutive fiscal years from 2015 to 2019, including performance (revenue, gross profit, net profit) and asset and liability status, visually illustrating the company's long-term development trend Five-Year Performance Summary (US$ thousand) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | 2,008,719 | 2,053,320 | 1,838,731 | 1,313,291 | 1,189,164 | | Gross profit | 468,473 | 500,532 | 431,948 | 199,913 | 125,609 | | Profit (Loss) before tax | 324,035 | 323,861 | 319,227 | 69,097 | (351,561) | | Profit (Loss) attributable to owners of the company | 134,874 | 146,260 | 142,428 | 11,832 | (279,902) | Five-Year Balance Sheet Summary (US$ thousand) | Metric | 2019 | 2018 | 2017 | 2016 | 2015 | | :--- | :--- | :--- | :--- | :--- | :--- | | Total assets | 3,315,531 | 2,833,005 | 2,803,197 | 2,429,741 | 2,169,267 | | Equity attributable to owners of the company | 1,013,804 | 908,182 | 787,075 | 644,647 | 632,815 | XII. [Definitions](index=231&type=section&id=XII.%20Definitions) [Definitions](index=231&type=section&id=Definitions) This section provides detailed definitions for specific terms and abbreviations used throughout the report, aiming to help readers accurately understand the report content, and it covers explanations for company entities (e.g., "China Nonferrous Metal Mining Group," "Chambishi Copper Smelter"), legal and regulatory terms (e.g., "Listing Rules," "Securities and Futures Ordinance"), financial terms (e.g., "HKD," "USD") and industry-specific terms (e.g., "JORC Code")