Investment Rating - The report assigns a positive investment rating to Jinchuan International, highlighting its potential for growth in the copper and cobalt mining sector [2]. Core Insights - Jinchuan International is positioned as a flagship platform for Jinchuan Group to develop overseas mineral resources, with significant resource advantages and a strong operational foundation [2][7]. - The company has experienced significant revenue fluctuations from 2019 to 2023, primarily driven by the volatility in copper and cobalt prices, with mining revenue increasing from $368 million to $649 million between 2019 and 2022 [2][11]. - The Musonoi project is expected to be a major growth driver, with anticipated production of 38,000 tons of copper and 7,800 tons of cobalt upon commencement [2][27]. Company Overview - Jinchuan International is a Hong Kong-listed company under Jinchuan Group, focusing on non-ferrous metal mining and trading, particularly copper, cobalt, and nickel [7][8]. - The company operates several mines, including Ruashi and Kinsenda, and is developing the Musonoi project, which has higher grades of copper and cobalt compared to existing operations [2][27]. Financial Analysis - The company’s revenue for 2023 is projected at $639 million, with a significant decline of 27.55% compared to 2022, primarily due to lower copper and cobalt prices [11][12]. - The report forecasts revenues of $747 million, $1.189 billion, and $1.422 billion for 2024, 2025, and 2026, respectively, with corresponding net profits of $74.82 million, $187.74 million, and $262.21 million [2][4]. - The C1 cash cost for copper in 2023 is estimated at $4,705 per ton, reflecting a slight increase from the previous year due to declining cobalt by-product prices [19]. Resource and Production Insights - Jinchuan International has substantial mineral resources, with the Musonoi project expected to contribute significantly to future production, boasting higher grades than existing mines [27][28]. - The Kinsenda mine is noted for its high-grade copper deposits, with production increasing by 4% in 2023, while the Ruashi mine faced challenges due to lower ore grades and power supply issues [25][22]. - The company’s total copper resources are projected at 1,090.93 thousand tons, with significant reserves across its operational and development projects [10][9].

Production and Mining Operations - In 2023, Ruashi Mine produced 31,787 tonnes of copper and 2,207 tonnes of cobalt[3]. - Kinsenda Mine produced 30,219 tonnes of copper content in concentrates in 2023, with an average reserves grade above 5%[3]. - The Musonoi Project, currently under construction, is expected to have a total mine life of 16 years[4]. - The Lubembe Project's mineral resources were upgraded from inferred to indicated category in December 2021[5]. - Chibuluma South Mine is leased out under a finance lease agreement, with a fixed rental fee plus a variable royalty fee based on copper extracted and sold[6]. - The company produced 62,006 tons of copper and 2,207 tons of cobalt in 2023, generating an annual revenue of US$638.9 million, with a loss attributable to shareholders of US$11.6 million[13]. - Annual copper output increased by 4.3% compared to 2022, while cobalt output decreased sharply by 44%, resulting in a historical low of 172 tonnes sold in the first half of 2023[22]. - The company expects the Musonoi Project, with total reserves of 606,000 tonnes of copper and 174,000 tonnes of cobalt, to commence operations in late 2024 or early 2025[24]. - Cobalt production decreased by 44% from 3,961 tonnes in 2022 to 2,207 tonnes in 2023, attributed to lower ore grades and no high cobalt content foreign ore purchases[37][38]. - Copper production increased by 5% from 30,353 tonnes in 2022 to 31,787 tonnes in 2023, with 26,836 tonnes being copper cathode[36][37]. Financial Performance - The financial performance of the Group in 2023 declined compared to 2022, primarily due to a continuous drop in commodity prices for copper and cobalt[97]. - Revenue for the Group's operations in 2023 was US$638.9 million, a 28% decrease compared to US$881.6 million in 2022[106]. - Cobalt revenue for 2023 was US$39.1 million, a significant decrease of 76% compared to US$160.9 million in 2022[113]. - The Group recorded a consolidated loss after income tax of US$10.7 million for 2023, compared to a profit of US$6.9 million in 2022[134]. - Loss attributable to shareholders amounted to US$11.6 million for 2023, compared to a profit of US$1.0 million in 2022, primarily due to a US$29.0 million impairment loss of VAT recoverable[134]. - The Group's EBITDA is used to evaluate financial performance and identify underlying business trends, although it does not have a standardized meaning prescribed by IFRS[139]. - The Group's cash and bank balances decreased to US$85.0 million as of 31 December 2023, down from US$89.7 million as of 31 December 2022, indicating a reduction in liquidity[145]. - The Group recognized an impairment loss on cobalt finished goods inventory amounting to US$4.3 million in 2023 due to low market prices[118]. Market Conditions and Commodity Prices - Copper prices recovered to US$8,476 per tonne by the end of 2023, while cobalt prices fell to US$13.0 per pound (equivalent to US$28,660 per tonne), marking a significant decline from their 2022 highs[18]. - The average benchmark LME copper price for 2023 was US$8,483 per tonne, a 4% decrease from US$8,815 per tonne in 2022[98]. - The average MB cobalt price for 2023 was US$15.10 per pound, representing a 50% decrease from US$30.36 per pound in 2022[98]. - The outlook for copper is promising due to tight inventory and strong demand from energy transition, despite unforeseen impacts on mine supply in late 2023[26]. - Cobalt prices remained low due to oversupply, with Indonesian cobalt production increasing significantly, but still lagging behind the DRC's production[28]. - The geopolitical tensions and logistics issues have impacted the expected global economic recovery, particularly affecting demand from traditional end-user sectors for copper[21]. Strategic Initiatives and Future Outlook - The company aims to enhance resource development and acquisition capabilities through strategic resource investment mergers and acquisitions[14]. - The board plans to optimize the equity structure to stimulate market vitality and strengthen cost control to improve economic benefits[14]. - Geopolitical conflicts, deglobalization, and technological innovation are expected to be major challenges in 2024[15]. - The new energy industry's development is expected to drive growth in the copper industry[15]. - The company is committed to improving investor relations and market capitalization management[14]. - The Group aims to be a world-class mineral corporation, focusing on strategic planning and stakeholder value creation[158]. Resource and Reserve Estimates - As of December 31, 2023, the Group's Mineral Resources are estimated to contain approximately 4,474,000 tonnes of contained copper and 432,000 tonnes of contained cobalt, representing a 1.8% decrease in copper and a 1.1% decrease in cobalt compared to December 31, 2022[72]. - The Group's Mineral Reserves as of December 31, 2023, are estimated to contain approximately 1,048,000 tonnes of contained copper and 203,000 tonnes of contained cobalt, reflecting a 7.0% decrease in copper and a 1.5% decrease in cobalt from the previous year[74]. - The total copper-cobalt resources amounted to 70.8 million tons with an average grade of 2.3% Cu and 0.6% Co, containing 1,629 kt Cu and 432 kt Co[76]. - The total copper-cobalt reserves increased from 34.7 million tons in 2022 to 33.1 million tons in 2023[78]. - The total measured resources for the Kinsenda Mine are 0.7 million tons at a grade of 4.4% Cu, containing 29 kt Cu[77]. Operational Challenges - The company faced an 8.1% drop in copper sales from 2022 due to logistical problems in the DRC and intermittent truck availability[22]. - The decline in cobalt production was attributed to the lack of high cobalt content foreign ore purchases and continuous decline in cobalt market prices[104]. - The increase in C1 cash cost was influenced by higher electricity costs and the use of more expensive diesel power due to unstable power supply[138]. - The Group faced higher production costs and delays in the sales of cobalt products, impacting overall financial results[97]. Corporate Governance and Management - The Group's relationship with its shareholders and investors is detailed on pages 112 to 120[190]. - The Group's final dividend for 2023 is recommended at HK$0.2 per share, totaling approximately HK$25,004,000, consistent with the previous year[197]. - The Group's major business activities are outlined in note 39 of the consolidated financial statements[193]. - There were no significant changes in the nature of the Group's principal activities during the year[189]. - The Group's performance analysis using key financial performance indicators is included in the Management Discussion and Analysis section on pages 40 to 60[194].

Financial Performance - For the year ended December 31, 2023, the company reported total revenue of $638,857,000, a decrease of 27.5% from $881,598,000 in 2022[2] - The gross profit for 2023 was $70,746,000, compared to $68,485,000 in 2022, reflecting a slight increase of 1.8%[2] - The company recorded a loss before tax of $27,024,000 for 2023, a significant decline from a profit of $61,130,000 in the previous year[2] - The net loss attributable to owners of the company for 2023 was $11,558,000, compared to a profit of $1,028,000 in 2022[4] - Total comprehensive loss for the year was $11,852,000, compared to a comprehensive income of $7,953,000 in 2022[5] - The company reported a basic and diluted loss per share of $0.09 for 2023, compared to earnings of $0.01 per share in 2022[5] - The company’s total equity decreased to $1,149,768,000 in 2023 from $1,166,090,000 in 2022, a decline of 1.4%[7] - The company recorded a pre-tax profit of $27,024,000 for the year ended December 31, 2023, compared to $61,130,000 in 2022, indicating a decrease of about 55.8%[14] - The total finance costs for 2023 were $30,309,000, significantly higher than $14,563,000 in 2022, reflecting an increase of approximately 107.5%[17] - The effective tax rate for the year was approximately 37.7%, with significant contributions from corporate taxes in the Democratic Republic of Congo and Zambia[20] Revenue Breakdown - For the year ended December 31, 2023, total segment revenue was $652,774,000, a decrease from $992,709,000 in 2022, reflecting a decline of approximately 34.2%[14] - The mining segment generated revenue of $479,047,000, down from $724,980,000 in the previous year, representing a decrease of about 33.9%[14] - The trading of mineral and metal products segment reported revenue of $173,727,000, a decline from $267,729,000, which is a decrease of approximately 35.1%[14] - Revenue from copper sales in 2023 was $435.3 million, down from $487.9 million in 2022, and cobalt sales generated $39.1 million, down from $160.9 million[33] - The trading division recorded revenue of $164.4 million in 2023, a 29% decrease from $232.8 million in 2022, due to lower trade volumes and commodity prices[40] Production and Sales - The company produced approximately 62,006 tons of copper in 2023, up from 59,440 tons in 2022, while cobalt production decreased to 2,207 tons from 3,961 tons[33] - Copper production in 2023 was approximately 62,006 tons, a 4% increase from 59,440 tons in 2022, with Ruashi mine contributing 31,787 tons, up 5% from 30,353 tons[34] - Cobalt production decreased by 44% to approximately 2,207 tons in 2023 from about 3,961 tons in 2022, primarily due to the absence of high-cobalt ore purchases[34] - Copper sales volume was 59,516 tons in 2023, down 8% from 64,739 tons in 2022, while cobalt sales volume dropped 53% to 2,114 tons from 4,496 tons[38] Costs and Expenses - The cost of sales for mining operations was $374.1 million in 2023, a 27% reduction from $513.4 million in 2022, mainly due to decreased ore procurement costs[42] - The total sales and distribution costs decreased by 15% from $36.3 million in 2022 to $31.1 million in 2023, mainly due to a decline in cobalt sales from the Ruashi mine offset by increased copper sales from the Kinsenda mine[52] - Administrative expenses decreased by 26% from $10.4 million in 2022 to $7.7 million in 2023 due to effective cost control measures[53] - C1 cash costs increased by 2% from $4,634 per ton in 2022 to $4,705 per ton in 2023, driven by reduced cobalt revenues and increased production costs[57] Assets and Liabilities - Non-current assets increased to $1,899,771,000 in 2023 from $1,717,385,000 in 2022, marking an increase of 10.6%[6] - Current liabilities decreased slightly to $253,268,000 in 2023 from $266,340,000 in 2022[6] - The company's total assets less current liabilities amounted to $1,917,114,000, up from $1,763,188,000 in 2022, indicating a growth of 8.7%[6] - Total bank borrowings and overdrafts increased to $278.5 million as of December 31, 2023, from $197.8 million in 2022[61] - The company's debt-to-equity ratio rose to 32.4% as of December 31, 2023, compared to 18.9% in 2022, due to increased borrowings[62] Market Conditions - In 2023, the average copper price was $8,483 per ton, a 4% decrease from $8,815 per ton in 2022[32] - Cobalt prices fell by 50% in 2023, averaging $15.10 per pound compared to $30.36 per pound in 2022[32] - The copper price showed resilience in 2023, starting at $8,530 per ton and ending at $8,479 per ton despite macroeconomic challenges[67] - Cobalt prices have dropped approximately 67% from $39.75 per pound in April 2022 to $13 per pound by December 2023, influenced by increased supply from the Democratic Republic of Congo and Indonesia[69] Future Outlook and Strategy - The company aims to maintain strict monitoring of outstanding receivables to minimize credit risk[26] - The company is investing in the Lubembe project, with an estimated budget of $15 million allocated for development in the upcoming year[81] - Future guidance estimates a revenue increase of 25% for the next fiscal year, driven by higher copper prices and increased production capacity[82] - The company is exploring potential acquisitions to enhance its market position, focusing on companies with complementary mining operations[82] - New technology initiatives are underway to improve mining efficiency, with an expected reduction in operational costs by 10%[82] - The board of directors remains committed to sustainable practices, aiming for a 50% reduction in carbon emissions by 2025[82] Shareholder Returns - The company proposed a final dividend of HKD 0.2 per share for the year ended December 31, 2023, totaling approximately $3,206,000, unchanged from the previous year[21][24] - The board proposed a dividend of HK$0.2 per share for 2023, totaling approximately HK$25,004,000, consistent with the previous year's dividend[73] Governance and Compliance - The company has adopted corporate governance principles and complied with applicable rules, with a noted exception regarding the attendance of the chairman at the annual general meeting[77] - No purchases, sales, or redemptions of the company's listed securities were made during the fiscal year ending December 31, 2023[78]

Mining Operations - The Group operates two mines: Ruashi Mine and Kinsenda Mine, with one project in development (Musonoi Project) and one advanced exploration project (Lubembe Project) [8] - The ownership structure of Ruashi Mine is 75% by Jinchuan Group International and 25% by Gécamines SA [8] - The Group's mining operations also include a mine leased out under a finance lease agreement, Chibuluma South Mine [8] - The Group is focused on expanding its mining operations and exploring new projects to enhance resource availability [8] - The Musonoi Project, located north of Kolwezi, has resources of 1,085kt Cu and 363kt Co, with a mine life of 16 years according to the June 2023 feasibility study [26] - The Musonoi Project is currently under construction and has reserves of 606kt Cu and 174kt Co [26] - The mineral resources at the Dilala Syncline are SAMREC Code compliant, with a strike length of 600m to 700m and high-grade mineralization starting at 50m to 100m below the surface [27] - The construction of the main decline ramp was completed in March 2023, totaling over 5,000m of construction work [28] - The dewatering pump station at 140m level has been completed and is currently in the testing phase, while construction at 400m level has commenced [29] - The integrated maintenance workshop construction has started and is expected to be completed by the end of 2023 [31] - The total lease payment for the Chibuluma South Mine is US$6.5 million, fully received by June 30, 2023, with additional monthly royalty payments based on copper sales [34] Production and Sales Performance - Ruashi's copper production decreased by 8% from 15,554 tonnes in 2022 1H to 14,357 tonnes in 2023 1H due to unstable power supply and lower ore feed grade [11] - Cobalt production fell by 48% from 2,603 tonnes in 2022 1H to 1,364 tonnes in 2023 1H, attributed to reduced foreign ore purchases and lower recovery rates [11] - Kinsenda Mine produced 15,843 tonnes of copper content in concentrate in 2023 1H, a 20% increase compared to 13,235 tonnes in 2022 1H, driven by an 18% higher ore feed grade [22] - The total ore mined in 2023 1H was 805,136 tonnes, a 28% decrease from 1,114,113 tonnes in 2022 1H [13] - The Group produced 1,666 tonnes of payable copper in 2023 1H, a decrease of 9.6% from 1,843 tonnes in 2022 1H, and recorded royalty income of US$1.1 million, down from US$1.6 million in the same period [35][36] - The Group produced approximately 30,200 tonnes of copper in 2023 1H, an increase of 4.4% from approximately 28,789 tonnes in 2022 1H, while cobalt production decreased to approximately 1,364 tonnes from 2,603 tonnes [43] - Revenue from copper sales in 2023 1H was US$221.0 million, compared to US$234.5 million in 2022 1H, while cobalt sales generated a loss of US$1.5 million compared to a profit of US$130.8 million in the previous year [43] Financial Performance - Total revenue for 2023 1H was US$91,171,000, a significant decline from US$273,567,000 in 2022 1H [10] - Revenue for the Group's operations in 2023 1H was US$327.1 million, a decrease of 39% from US$539.4 million in 2022 1H [46] - Gross profit decreased by 77% from US$123.4 million in 2022 1H to US$28.4 million in 2023 1H, mainly due to falling copper and cobalt prices [60] - The Group recorded a loss after income tax of US$10.0 million for 2023 1H, compared to a profit of US$67.1 million for 2022 1H [75] - The loss attributable to shareholders amounted to US$12.5 million for 2023 1H, down from a profit of US$49.1 million for 2022 1H, primarily due to declining commodity prices and increased production costs [78] - The Group's EBITDA for the six months ended June 30, 2023, was US$40.2 million, a significant decrease from US$148.5 million in the same period of 2022 [87] - The average price realized per tonne of copper decreased by 13% from US$8,638 in 2022 1H to US$7,538 in 2023 1H [52] - Cobalt revenue for 2023 1H was -US$1.5 million, significantly down from US$130.8 million in 2022 1H, primarily due to a 58% decrease in average cobalt prices [54] Costs and Expenses - The Group's mining activities incurred total expenses of US$155.8 million for the six months ended 30 June 2023, with significant costs in development activities amounting to US$91.2 million [39][40] - C1 cash costs increased significantly from US$1,771 per tonne in 2022 1H to US$5,116 per tonne in 2023 1H, primarily due to a decrease in cobalt sales volume and rising production costs [83] - Processing costs increased by 15% in 2023 1H, primarily due to higher electricity costs and increased reagent consumption [58] - Finance costs increased by 11% from US$4.1 million in 2022 1H to US$4.5 million in 2023 1H due to rising market interest rates and increased borrowings [61] - Interest expenses before capitalization rose by 104% from US$5.4 million in 2022 1H to US$11.0 million in 2023 1H, driven by higher market interest rates [61] Market Conditions and Outlook - The LME copper price rose to $9,340 per tonne in early 2023 but dropped to $8,210 per tonne by the end of June 2023 due to weakened demand sentiment and modest economic growth in China [100] - The benchmark MB cobalt price decreased by approximately 59% from $39.75 per pound at the end of April 2022 to $14.25 per pound at the end of June 2023 [104] - The decline in cobalt price was attributed to weak global demand and increased supplies from Indonesia, which has emerged as the world's second-largest cobalt producer [105] - Long-term copper demand is expected to reach approximately 53 million tonnes annually by 2050 to achieve carbon neutrality, more than double the current level [104] - Global cobalt demand is expected to more than double by 2030, reaching approximately 388,000 tonnes, driven by the growth of the EV sector and recovery in the aviation industry [109] Corporate Governance and Shareholder Information - The Company has complied with all applicable code provisions of the Corporate Governance Code during the six months ended June 30, 2023 [153] - The Company has established a Remuneration and Nomination Committee to review remuneration and nomination functions for all Directors and senior management [148] - The Board expresses gratitude to shareholders, community, and business partners for their support [156] - The Group has not declared any interim dividend for the six months ended June 30, 2023, consistent with the same period in 2022 [100] - The total number of issued shares of the company as of June 30, 2023, was 12,502,082,051 shares [118]

Share Incentive Plan - The total number of performance shares that may be issued under the share incentive plan is limited to 10% of the total issued shares as of the adoption date, amounting to 435,075,305 performance shares[4] - As of the date of the 2022 annual report, the number of shares available for issuance under the share incentive plan is 435,075,305, which represents approximately 3.48% of the total issued shares[4] - The share incentive plan has a remaining validity period of approximately two years and one month from the date of the 2022 annual report[7]

Financial Performance - The company reported revenue of $327,112 thousand for the six months ended June 30, 2023, a decrease of 39.4% compared to $539,423 thousand in the same period of 2022[2] - Gross profit for the same period was $28,389 thousand, down 77.0% from $123,419 thousand year-on-year[2] - The company incurred a loss of $10,038 thousand for the six months ended June 30, 2023, compared to a profit of $67,090 thousand in the prior year, representing a significant decline[2] - Basic loss per share for the period was $(0.10), compared to earnings of $0.39 per share in the same period last year[4] - The company reported a pre-tax loss of $(6,409,000) for the six months ended June 30, 2023, compared to a profit of $101,139,000 for the same period in 2022[17] - The group recorded a net loss of $10.0 million after tax in the first half of 2023, compared to a profit of $67.1 million in the same period of 2022[52] - Shareholders' attributable loss was $12.5 million in the first half of 2023, compared to a profit of $49.1 million in the first half of 2022, primarily due to declining commodity prices and inventory impairment losses[52] - EBITDA for H1 2023 was $40.2 million, a decrease of 72.9% compared to $148.5 million in H1 2022[57] Assets and Liabilities - Total assets as of June 30, 2023, amounted to $1,780,111 thousand, an increase from $1,717,385 thousand as of December 31, 2022[5] - Current liabilities increased to $324,739 thousand from $266,340 thousand at the end of 2022, indicating a rise in short-term financial obligations[5] - The company's net asset value decreased to $1,152,145 thousand as of June 30, 2023, down from $1,166,090 thousand at the end of the previous year[6] - Total bank borrowings and overdrafts increased to $266.1 million as of June 30, 2023, up from $197.8 million at the end of 2022[59] - The debt-to-equity ratio rose to 25.1% as of June 30, 2023, compared to 18.9% at the end of 2022, driven by increased borrowings[60] Revenue Breakdown - Copper sales contributed $320,973,000, down from $380,523,000, while cobalt sales dropped significantly from $185,149,000 to $17,513,000[11] - The mining segment generated $220,477,000 in revenue, while the trading of mineral and metal products brought in $100,496,000[14] - The trading segment generated revenue of $107.6 million in the first half of 2023, a decrease of 38% from $174.1 million in the first half of 2022[39] Production and Costs - Cobalt production decreased by 48% to approximately 1,364 tons in the first half of 2023, compared to about 2,603 tons in the first half of 2022[33] - The group’s mining business sales cost for the first half of 2023 was $177.9 million, a decrease of 14% from $207.0 million in the first half of 2022[41] - The cost of ore procurement dropped significantly from $65.2 million in the first half of 2022 to $1.3 million in the first half of 2023 due to reduced external ore purchases[41] - Smelting costs increased by 15% in the first half of 2023, primarily due to rising electricity costs and increased use of diesel power[41] - C1 cash cost increased significantly from $1,771 per ton in H1 2022 to $5,116 per ton in H1 2023, primarily due to a substantial decrease in cobalt sales and rising production costs[55] Market Conditions - In the first half of 2023, the average copper price was $8,704 per ton, down 11% from $9,756 per ton in the first half of 2022[31] - The copper price fluctuated, starting at $9,340 per ton in early 2023 and dropping to $8,210 per ton by the end of June 2023 due to weakened demand and economic uncertainties[65] - Cobalt prices have dropped approximately 59%, from $39.75 per pound ($87,634 per ton) in April 2022 to $14.25 per pound ($31,416 per ton) by June 2023, driven by weak global demand and increased supply from Indonesia[67] Strategic Focus and Future Outlook - The company continues to focus on its core mining and trading operations, with no specific new product or market expansion strategies disclosed in the report[7] - The company is focused on the development of the Musonoi copper-cobalt project in the Democratic Republic of Congo, with construction progressing well in the first half of 2023[69] - Future outlook includes potential new projects such as the Lubembe project, which is expected to enhance copper production capacity[79] - The company aims to maintain a strong financial position while pursuing growth opportunities in the mining sector[80] Corporate Governance and Compliance - The company is committed to high standards of corporate governance and has adhered to all applicable codes during the reporting period[72] - The board of directors emphasized the importance of adhering to corporate governance standards as outlined in the listing rules[77]

Production and Mining Operations - Ruashi Mine produced 30,353 tonnes of copper and 3,961 tonnes of cobalt in 2022[5]. - Kinsenda Mine produced 29,087 tonnes of copper content in concentrates in 2022, with an average reserves grade of 5.8%[6]. - Musonoi Project is an underground mine under construction with a total mine life of 19 years, expected to produce copper cathode and cobalt hydroxide[8]. - The average grade of Kinsenda Mine positions it among the world's highest grade copper deposits[6]. - The Musonoi copper-cobalt project contains total reserves of 606kt of copper and 174kt of cobalt, enhancing the Group's production capacity and leading status in cobalt production[70]. - Copper production at Ruashi Mine decreased by 8% from 33,063 tonnes in 2021 to 30,353 tonnes in 2022, while cobalt production increased by 17% from 3,379 tonnes to 3,961 tonnes[97][100]. - Kinsenda Mine produced 29,087 tonnes of copper in 2022, a 3% increase from 28,197 tonnes in 2021, with an overall recovery rate of 94.29%, up 1% from 93.8% in 2021[123]. - The total ore mined in 2022 was 2,480,135 tonnes, representing a 21% increase compared to 2,054,098 tonnes in 2021[99]. Financial Performance - In 2022, Jinchuan Group International Resources Co. Ltd produced 59,440 tonnes of copper and 3,961 tonnes of cobalt, achieving a revenue of US$881.6 million, representing a year-on-year increase of 5.97%[37]. - The profit attributable to shareholders for the year was US$1.03 million[37]. - Revenue from copper sales in 2022 was $288,524,000, while cobalt sales generated $160,910,000, leading to a total revenue of $449,434,000[102]. - Overall revenue in 2022 increased by 24% compared to 2021, with copper revenue rising by 13% and cobalt revenue increasing by 51%[108]. - The average realised copper price for 2022 was US$8,208 per tonne, which is 10% lower than the US$9,135 per tonne in 2021[106]. - The average realised cobalt price for 2022 was US$35,790 per tonne, a 12% decrease from US$40,738 per tonne in 2021, influenced by a 44% drop in benchmark cobalt price[107]. Project Development and Construction - The Musonoi Project's mining engineering was completed ahead of schedule, with concentration engineering progressing smoothly[37]. - Jinchuan Group plans to accelerate the construction progress of the Musonoi Project and initiate trial mining operations on schedule[42]. - The construction of the main decline ramp for the Musonoi Project was completed in March 2023, with over 5,000 meters of construction work finished[139]. - The construction of the dewatering pump station at 140mL was completed and is currently in the testing phase, while construction at 400mL has commenced[144]. - The construction contract for the concentrator at the Musonoi Project was awarded in 2022, with civil works progressing as planned[146]. - The Musonoi Project's deep processing project construction is scheduled to commence in 2023, with contracts currently under evaluation[146]. Market Conditions and Strategic Focus - The company is focused on optimizing processing circuits and copper recoveries in its projects[10]. - The company has a strategic focus on high-grade copper-cobalt deposits in the DRC[8]. - The Group is actively pursuing merger and acquisition opportunities in southern Africa to seek synergies with existing operations[73]. - Looking ahead to 2023, the recovery of the PRC's economy is expected to provide more flexibility for Hong Kong stocks amid easing overseas inflation and liquidity[43]. - The company anticipates that the Hong Kong stock market may rebound as global funds increase their allocation to it[43]. Resource Management and Sustainability - The company aims to strengthen investor relationship management and maintain market capitalization while optimizing shareholder structure and enhancing market liquidity[42]. - Jinchuan Group will focus on resource sustainability and the acquisition of new resource projects to support its growth strategy[42]. - The Group's Mineral Resources were estimated to contain approximately 4,557,000 tonnes of contained copper and 437,000 tonnes of contained cobalt, representing a 1.9% decrease in copper and a 1.6% decrease in cobalt compared to December 31, 2021[177][182]. - As of December 31, 2022, the Group's Mineral Reserves were estimated to contain approximately 1,126,000 tonnes of contained copper and 206,000 tonnes of contained cobalt, representing a 1% increase in copper and a 4% increase in cobalt compared to December 31, 2021[189]. Challenges and Risks - The Group recorded a profit in 2022 despite a significant drop in copper and cobalt prices, which fell by 20% and 19% respectively in Q2 2022[49][53]. - The Group's production was not interrupted by COVID-19, but logistics and delivery were heavily impacted, particularly in the first half of 2022[54][56]. - Global copper market remains tight with low LME copper inventory levels and supply disruptions in major producing countries like Chile and Peru[62][64]. - The decrease in Kinsenda Mine's copper resources was attributed to mining depletion during the year[180]. - The increase in copper and cobalt reserves at Ruashi Mine was partially offset by mining depletion during the year[195].

Financial Performance - The company's revenue for the year ended December 31, 2022, was $881.6 million, an increase of 6% from $831.9 million in 2021[2] - The cost of sales increased significantly to $746.2 million from $531.1 million, resulting in a gross profit of $135.4 million[2] - The profit before tax from continuing operations was $61.1 million, compared to $278.7 million in the previous year, indicating a substantial decline[2] - The net profit from continuing operations for the year was $6.9 million, down from $162.4 million in 2021, reflecting a decrease of approximately 96%[3] - Total comprehensive income for the year was $8.0 million, compared to $162.3 million in the previous year[4] - Basic earnings per share from continuing operations were $0.01, down from $0.96 in the previous year, reflecting the overall decline in profitability[7] - Total revenue from continuing operations was $992,709,000 in 2022, up from $797,078,000 in 2021, marking a growth of 24.5%[14] - The adjusted revenue after temporary pricing adjustments was $881,598,000 for 2022, compared to $831,899,000 in 2021, reflecting a 6% increase[17] - The company reported a pre-tax profit from continuing operations of $61,130,000 for the year 2022, a decrease from $278,736,000 in 2021[18] - The company recorded a consolidated profit of $6,900,000 for the year ended December 31, 2022, a decrease from $162,400,000 in 2021[68] Assets and Liabilities - Non-current assets increased to $1.72 billion from $1.51 billion, primarily due to investments in property, plant, and equipment[8] - Current liabilities decreased significantly to $312.1 million from $529.4 million, improving the company's liquidity position[8] - The company's total assets less current liabilities stood at $1.76 billion, up from $1.66 billion in the previous year[8] - The net asset value decreased slightly to $1.17 billion from $1.18 billion, indicating a stable equity position despite the decline in profits[9] - The total interest expenses for bank loans increased to $9,980,000 in 2022 from $8,030,000 in 2021, reflecting a rise of approximately 24%[23] - The deferred tax liabilities for 2022 were $37,090,000, a decrease from $54,107,000 in 2021, reflecting a reduction of approximately 31.5%[25] - The group's trade payables increased significantly to $102.8 million in 2022 from $39.6 million in 2021[12] - The total bank borrowings and overdrafts as of December 31, 2022, were $197.8 million, compared to $249.7 million in 2021, showing a reduction in debt levels[75] Revenue Sources - Revenue from copper sales reached $696,224,000 and cobalt sales reached $296,485,000 for the year 2022, compared to $637,288,000 and $159,790,000 in 2021, representing increases of 9.3% and 85.4% respectively[13] - The mining segment generated $724,980,000 in revenue, while the metal trading segment contributed $267,729,000, leading to a total segment revenue of $992,709,000[17] - The trading division recorded a revenue of $232.8 million in 2022, up from $211.3 million in 2021[45] - The group sold 64,739 tons of copper in 2022, compared to 57,001 tons in 2021, generating revenue of $487.9 million[43] - The group’s cobalt sales revenue was $160.9 million in 2022, compared to $106.6 million in 2021[43] Production and Costs - Copper production in 2022 was 59,440 tons, a decrease of 3% from 61,260 tons in 2021, while cobalt production increased by 17% to 3,961 tons[43][44] - The average copper price reached a historical high of $10,730 per ton in March 2022, followed by a 35% decline to $7,000 per ton by July 2022[42] - The average realized copper price fell by 16% to $7,537 per ton, and the average realized cobalt price decreased by 12% to $35,790 per ton in 2022[50] - The company's total sales cost increased by 63% to $746.2 million in 2022, driven by higher mining and refining costs[51] - The gross profit decreased by 73% to $68.5 million in 2022 due to rising sales costs and increased mining rights fees[54] - For the year ended December 31, 2022, the direct and indirect mining costs amounted to $441.967 million, an increase from $305.571 million in 2021[71] - The C1 cash cost per ton of copper increased to $4,634 in 2022 from $2,611 in 2021, reflecting a significant rise in operational costs[71] Market Conditions and Future Outlook - The company plans to continue evaluating the market conditions and pricing for copper, with a long-term price estimate of $8,300 per ton for 2022, up from $7,100 per ton in 2021[20] - Copper prices have dropped by one-third from a high of $10,730 per ton in March 2022 to $7,000 per ton in July 2022, the lowest since November 2020[81] - Global copper supply has been affected by government interventions and labor issues, with LME copper inventories remaining low[82] - The long-term demand for copper is expected to double to 53 million tons annually by 2050 to achieve carbon neutrality[83] - Cobalt prices have decreased by approximately 61% from $39.0 per pound at the end of March 2022 to $15.15 per pound by the end of February 2023[84] - Analysts predict cobalt demand will continue to grow at a compound annual growth rate of 7% until 2030[85] - The group continues to monitor market volatility to ensure preparedness for any market changes[85] Corporate Governance and Strategic Initiatives - The company has ceased its trading operations in China as of December 31, 2021, and these results are classified as discontinued operations[15] - The company applied the International Financial Reporting Standards revisions for the first time this year, which did not have a significant impact on the financial statements[12] - The audit committee has reviewed the group's accounting principles and internal controls for the fiscal year ending December 31, 2022[89] - The group has adopted corporate governance principles in compliance with applicable regulations for the fiscal year ending December 31, 2022[92] - The group is focused on becoming a world-class mining enterprise, with strategic planning supported by its board and ongoing projects[86] Shareholder Returns - The company proposed a final dividend of HKD 0.2 per share for the year ending December 31, 2022, totaling approximately $3,206,000, consistent with the previous year's dividend[30] - The board proposed a final dividend of HKD 0.2 per share for 2022, totaling approximately HKD 25,004,000, consistent with the previous year's dividend[88] - The group repurchased and canceled a total of 107,791,000 shares for approximately $10.61 million during the year[38] - The group repurchased a total of 107,791,000 shares at a total cost of approximately HKD 82,767,650 during the fiscal year ending December 31, 2022[93] Employee and Operational Insights - The group has 1,598 long-term employees and 4,050 contractors as of December 31, 2022, compared to 1,575 and 2,741 respectively in 2021, indicating a significant increase in contractor workforce[87] - The total employee costs, including salaries and other benefits, rose to $54,085,000 in 2022 from $52,319,000 in 2021, marking an increase of about 3.4%[24] Sustainability and Innovation - The company is committed to sustainability, with plans to invest 10% of profits into renewable energy initiatives[99] - The company aims to reduce production costs by 15% through technological advancements in mining processes[97] - A new partnership with a leading technology firm is set to improve data analytics capabilities, enhancing decision-making[98] - The Lubembe project is expected to contribute an additional 50,000 tons of copper annually once operational[99]

Production and Mining Activities - Ruashi Mine's copper production decreased by 1% to 15,554 tonnes in 2022 1H from 15,637 tonnes in 2021 1H, while cobalt production increased by 80% to 2,603 tonnes from 1,447 tonnes[12]. - A total of 1,114,113 tonnes of ore was mined in 2022 1H, representing a 31% increase compared to 849,145 tonnes in 2021 1H[14]. - Ruashi processed 65,927 tonnes of third-party ore with high-grade cobalt content in 2022 1H[13]. - Leach feed processed in 2022 1H was 738,712 tonnes, a 1% decrease from 744,656 tonnes in 2021 1H[13]. - The focus on cobalt production in 2022 1H was due to the processing of more foreign ore with high-grade cobalt[12]. - Ruashi Mine continued high waste stripping in 2022 1H to prepare for the rainy season and create dumping space[14]. - The mining activities at Ruashi are expected to remain high until July 2022[14]. - The Group operates two mines (Ruashi and Kinsenda), one development project (Musonoi), and one exploration project (Lubembe)[10]. - The Group's operational strategy includes accelerating the depletion of Pit 1 to facilitate waste management from Pit 3[14]. Financial Performance - Total revenue for Ruashi in 2022 1H was US$273,567,000, representing a 44% increase compared to US$189,915,000 in 2021 1H, with copper revenue increasing by 3% and cobalt revenue rising by 157%[27]. - The Group's total revenue for 2022 1H was US$539.4 million, a 50% increase from US$360.4 million in 2021 1H[92]. - Consolidated profit for the period decreased to US$67.1 million in 2022 1H from US$78.7 million in 2021 1H[141]. - Profit attributable to shareholders fell to US$49.1 million in 2022 1H from US$61.1 million in 2021 1H, mainly due to higher production costs offsetting the impact of increased commodity prices[142]. - The Group's EBITDA for the six months ended June 30, 2022, was US$148.5 million, down 9.1% from US$163.4 million in the prior year[153]. Commodity Prices and Market Trends - Average copper price realized in 2022 1H was US$9,607 per tonne, a 7% increase from US$9,021 per tonne in 2021 1H, while average cobalt price realized was US$59,199 per tonne, up 38% from US$42,930 per tonne[25][26]. - The LME copper price peaked at US$10,730 per tonne in March 2022 and closed at US$8,245 per tonne by June 30, 2022[81]. - The LME copper price decreased by 15% from the end of 2021, closing at US$8,245 per tonne by June 30, 2022[100]. - Copper prices have dropped by one-third from a March 2022 high of $10,700 per tonne to $7,000 per tonne in mid-July 2022, the lowest since November 2020[179]. - The benchmark MB cobalt price has retreated approximately 40% from US$39.0 per pound at the end of March 2022 to US$23.5 per pound by the date of this report[197]. Production Costs and Expenses - Total expenses for exploration, development, and mining activities for the first half of 2022 amounted to US$162.9 million[78]. - Total cost of sales for mining operations rose to $207.0 million in 2022 1H, a 24% increase from $167.6 million in 2021 1H, with mining costs up 29% due to increased activities at Ruashi Mine[111]. - Gross profit decreased by 8% to $123.4 million in 2022 1H from $133.7 million in 2021 1H, as revenue growth was offset by higher costs[115]. - Processing costs increased by 20% in 2022 1H due to higher reagent consumption and rising reagent prices[111]. - Ore purchase expenses surged to $65.2 million in 2022 1H from $1.8 million in 2021 1H, as Ruashi Mine successfully sourced more ore from independent suppliers[111]. Capital Expenditure and Investments - The capital expenditure for Ruashi Mine in 2022 1H was US$8.8 million, including US$5.1 million for the flotation plant construction[28][32]. - Capital expenditure at Kinsenda Mine in 2022 1H was US$6.4 million, mainly for underground development and dewatering[44]. - The Group's capital expenditures for the six months ended June 30, 2022, amounted to $45.6 million, a decrease from $48.8 million in the same period of 2021[173]. Cobalt Production and Demand - Cobalt production increased by 80% from 1,447 tonnes in 2021 1H to 2,603 tonnes in 2022 1H, driven by higher-grade ore purchased from independent suppliers[85]. - Cobalt revenue from mining operations increased by 157% in 2022 1H due to an 86% increase in sales volume and a 38% rise in average realized price[103]. - EVs became the largest end-use sector for cobalt in 2021, representing 34% of global cobalt usage[198]. - Analysts forecast cobalt demand to expand at a compound annual growth rate of 7% through 2030[198]. Operational Challenges - Copper sales volume decreased by 12% in 2022 1H compared to 2021 1H, impacted by disruptions in international logistics due to COVID-19 measures[40]. - The Group's average delivery time from the DRC was longer than normal due to COVID-19 logistics disruptions, impacting sales volume[102]. - The geopolitical instability and high energy prices are affecting investments, contributing to the volatility of commodity prices in the first half of 2022[179]. Employee and Corporate Governance - As of June 30, 2022, the Group had 1,565 permanent employees and 3,084 contractor employees, with a slight decrease in permanent staff from 1,575 at the end of 2021[177]. - The Board resolved not to declare any interim dividend for the six months ended June 30, 2022, consistent with the same period in 2021[178].

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].