Tuesday, March 11, 2008

Zijin Mining to raise gold output on high metal price

Zijin Mining<2899>, China's largest gold producer, said it will raise output this year as high metal prices lift market to record, according to its chairman Chen Jinghe.

According to Chen, the weakening U.S. dollar has made gold one of the popular investments worldwide, and drove up the demand and the price of the metal. Therefore, the company plans to boost its gold output to 57.3 tons, up 9.6% over the previous year.

The company earmarked approximately RMB 5 billion to raise its mining capacity and fund overseas acquisitions, up from capital spending of RMB 4 billion last year. It is also in talks to purchase a foreign gold mining project.

In line with its expansion plan, the gold producer would open a zinc mine in Russia's Tuva Republic in the first half of this year, and its Mongolian gold mining project would begin production in the second half, said Chen.

The company's revenue in 2007 has increased by 39.26% over the previous year. Its profits attributable to shareholders as at Dec. 31, 2007 were approximately RMB 2.55 billion, representing an increase of 49.72% over RMB 1.704 in 2006.

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