HBIS Resources (SZ:000923) Mei Ri Jing Ji Xin Wen·2026-02-05 02:50Core Viewpoint - HeSteel Resources has faced significant operational disruptions due to severe flooding in South Africa, impacting its copper production and potentially affecting its annual sales plan, despite previously optimistic signals regarding its copper capacity expansion [1][2][3]. Group 1: Impact of Natural Disaster - The flooding in Limpopo and Mpumalanga provinces is reported to be the worst since 2000, leading to a suspension of underground mining activities at Palabora Copper, which is expected to affect copper production for approximately two months [1][2]. - The disaster has caused direct production losses and potential repair costs, with the company unable to assess the total economic impact at this time [3]. Group 2: Copper Production Challenges - The copper phase two project was in a ramp-up stage with a designed capacity of 11 million tons per year, but the flooding has interrupted this growth trajectory [2]. - The company is transitioning from its first phase of copper mining, which is nearing closure, to relying heavily on the second phase for copper supply, making the current disruption particularly impactful [2]. Group 3: Iron Ore Business Resilience - Despite the challenges in copper production, the iron ore business remains operational, with approximately 100 million tons of iron ore stockpiled, providing a buffer against the financial impact of the copper production halt [4][5]. - The iron ore business has historically been a significant revenue contributor, with iron ore sales accounting for 64.84% of total revenue in the first half of 2025 [5]. Group 4: Future Strategies and Developments - The company plans to enhance its iron ore production through process upgrades, aiming to increase the iron ore grade from 58% to 65% and achieve an annual output of 6 million tons [5][6]. - HeSteel Resources has initiated insurance claims related to the flooding and is actively working on recovery efforts [6].