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Chihong Zinc & Germanium’s 200,000-ton lead-zinc smelting project in Hulunbuir has commenced operations.
2017-06-24
Yunnan Chihong Zinc & Germanium Co., Ltd. announced today that the 140,000‑ton‑per‑year zinc and 60,000‑ton‑per‑year lead smelting project, invested in and constructed by its wholly owned subsidiary, Hulunbuir Chihong Mining Co., Ltd., has recently completed commissioning and is now in operation, having reached its intended state of readiness for use. The project has a planned total investment of RMB 4.822 billion, financed through internal funds and bank loans.
The project commenced trial production for the first time in October 2014. On October 14, 2014, the company announced that it had approved the commencement of trial production for Hulunbuir Company’s smelting project, with an annual capacity of 140,000 tonnes of zinc and 60,000 tonnes of lead. The company was also required to submit an application to the Ministry of Environmental Protection for environmental protection acceptance upon completion of the project within three months from the start of trial production; only after passing this acceptance could the project be put into formal operation. At the time, the announcement further stated that, due to numerous factors potentially affecting trial production, there remained uncertainty as to whether the Hulunbuir Company’s lead–zinc smelting project would successfully achieve its intended objectives. The company pledged to meticulously organize trial production in accordance with the established schedule, striving to bring the project up to standards and reach full production as soon as possible.
At present, following continuous commissioning and upgrades, the project has reached its intended operational status, with output and key performance indicators steadily improving.
As the project gradually reaches full production capacity and complies with relevant standards, the company will add 140,000 tonnes per year of zinc capacity and 60,000 tonnes per year of lead capacity, which will help expand the company’s production scale and improve its cash flow. At the same time, given the substantial investment required—funded entirely through internal resources and bank loans—and the fact that current output and certain economic and technical indicators have not yet fully attained their design levels, the initial phase of operation is expected to exert a certain negative impact on the company’s financial performance, reducing 2016 earnings by approximately RMB 120 million. The company will continue to strengthen production‑technology management, strive to achieve full production and compliance at an early stage, and, in light of raw material and product market conditions, optimize production scheduling to enhance the project’s economic returns.
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