PDF《中国有色矿业有限公司》

2018 ANNUALREPORT China Nonferrous Mining Corporation Limited 中国有色矿业有限公司 (Incorporated in Hong Kong with limited liability under the Companies Ordinance) Stock Code:

1258 1 CONTENTS I.

Corporate Information

2 II. Chairman'

s Statement

4 III. Results Highlights

6 IV. Management Discussion and Analysis

8 V. Directors and Senior Management Biographies

41 VI. Corporate Governance Report

48 VII. Environmental, Social and Governance Report

75 VIII. Report of the Directors

103 IX. Independent Auditor'

s Report

121 X. Audited Consolidated Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income

126 Consolidated Statement of Financial Position

127 Consolidated Statement of Changes in Equity

129 Consolidated Statement of Cash Flows

130 Notes to the Consolidated Financial Statements

132 XI. Five Year Financial Summary

233 XII. Definitions

234 Monument for the discovery of the copper mine at Luanshya

2 DIRECTORS Executive Directors Mr. Tongzhou Wang (Chairman) (appointed on

30 August 2018) Mr. Xiaowei Wang (appointed on

30 August 2018) Mr. Lin Zhang (President) Mr. Chunlai Wang (Vice President) Mr. Kaishou Xie (Vice President) Mr. Xinghu Tao (Chairman) (resigned on

30 August 2018) Mr. Wei Fan (Vice President) (resigned on

30 August 2018) Non-Executive Director Mr. Jinjun Zhang (Vice Chairman) (appointed on

29 March 2019) Mr. Diyong Yan (Vice Chairman) (resigned on

29 March 2019) Independent Non-Executive Directors Mr. Chuanyao Sun Mr. Jingwei Liu Mr. Huanfei Guan REGISTERED OFFICE Room 1201, Allied Kajima Building

138 Gloucester Road Wanchai, Hong Kong PRINCIPAL PLACE OF BUSINESS IN ZAMBIA

32 Enos Chomba Road Kitwe, Zambia COMPANY'

S WEBSITE www.cnmcl.net STOCK CODE

1258 Zambian President Lungu cut the ribbon for the trial production ceremony of Chambishi Southeast Mine

3 JOINT COMPANY SECRETARIES Mr. Aibin Hu Ms. Man Yi Wong (appointed on

27 April 2018) Mr. Tin Wai Lee CPA (resigned on

27 April 2018) LEGAL ADVISER Baker &

McKenzie 14/F., One Taikoo Place

979 King'

s Road Quarry Bay Hong Kong AUDITOR Deloitte Touche Tohmatsu Certified Public Accountants 35/F., One Pacific Place

88 Queensway Hong Kong HONG KONG SHARE REGISTRAR Computershare Hong Kong Investor Services Limited Shops 1712C1716, 17th Floor Hopewell Centre,

183 Queen'

s Road East Wanchai, Hong Kong THE COMMITTEES OF THE BOARD Audit Committee Mr. Jingwei Liu (Chairman) Mr. Jinjun Zhang (appointed on

29 March 2019) Mr. Huanfei Guan Mr. Diyong Yan (resigned on

29 March 2019) Nomination Committee Mr. Chuanyao Sun (Chairman) Mr. Jinjun Zhang (appointed on

29 March 2019) Mr. Jingwei Liu Mr. Diyong Yan (resigned on

29 March 2019) Remuneration Committee Mr. Huanfei Guan (Chairman) Mr. Jinjun Zhang (appointed on

29 March 2019) Mr. Chuanyao Sun Mr. Diyong Yan (resigned on

29 March 2019) Compliance Committee Mr. Tongzhou Wang (Chairman) (appointed on

30 August 2018) Mr. Chuanyao Sun Mr. Huanfei Guan Mr. Xinghu Tao (Chairman) (resigned on

30 August 2018)

4 Chairman of the Board Tongzhou Wang

5 Dear Shareholders, I would like to take this opportunity to extend my heartfelt gratitude to the Shareholders and all sectors of the society for their care, support and help to the Company, and to thank the management and staff for their contributions to the operation, management, reform and development of the Company. The year

2018 was the 20th anniversary for the entering of Africa by China Nonferrous Metal Mining (Group) Co., Ltd, the holding group of the Company, and also a year when the holding group seriously implemented the spirit of the important speech delivered by President Xi Jinping at the Beijing Summit of the Forum on China-Africa Cooperation, and promoted the Belt and Road initiative to achieve synergy with the development in Africa by striving to work, develop and excel. During this year, the Group put forward the development strategy of realize coordinated development of its three major businesses, driven by two main work lines in development and management, and conduct a comprehensive reform , and explicitly set forth the priority of developing international business, the Belt and Road and the regional business in Africa. During this year, Zambian President Lungu visited the Chambishi Southeast Mine project owned by the Company, and attended the Zambia-China Business Forum held at the holding group and fully recognized the Company. During this year, the Board, the management and the staff of the Company made concerted efforts to expand the external market and strengthen internal management for enhancement of quality and efficiency. As a result, in terms of major products of the Company, the production volume of blister copper (including copper anode) and sulfuric acid remained at the same level in general as compared to last year and continued the heavy-loaded productivity, whereas the production volume of copper cathode increased by 8.8% year-on-year, resulting in a year-on-year increase of 11.7% in revenue in 2018. Profit attributable to the owners of the Company amounted to US$146.3 million (with a basic earnings per share of US$4.19 cents), representing an increase of US$3.9 million as compared with the year 2017. The world has been undergoing a slowing global economy and rising trade protectionism since last year. However, the world economy expects to gain new momentum in light of progress made in respective of the proactive negotiations on trade disputes between China and the US, as well as China'

s deleveraging, tax cuts and other measures for reform and stabilizing growth. Looking ahead, given the global copper products will remain at a tight balance, and demands for cobalt in the new energy sector will continue to grow, the prices of copper and cobalt remain promising in the long-term. With the rapid growth of emerging market and synchronized recovery of developed economies, the global economy is going to pick up stepwise. In 2019, China Nonferrous Mining will further optimise its development strategies, enhance corporate governance and work intensity and increase investments in geological exploration and development on the one hand;

and accelerate the progress in developing existing resources in Zambia, DRC and other key areas to increase the copper-cobalt resources in the possession of the Company through paralleled efforts in development, acquisition and cooperation. The Group will continue to improve the operational efficiency of its existing mines and smelters through optimizing the internal value chain management, promoting the integration construction of production, supply and marketing in the same region, boosting the digitalization of mines, intensifying cost control and other modern management methods, so as to continuously enhance the Group'

s profitability. In addition, we will exert due efforts on such major construction projects as the new construction project of Lualaba Copper Smelter, the reconstruction and expansion project of CNMC Huachin Mabende, and the mining exploration project of Kambove Mining to enlarge the existing production capacity and business scale of the Company on an ongoing basis. In particular, special priority will be given to capital operation and management and greater efforts will be devoted to information disclosure and results presentations so that the true value of the Company will stand out in the market. Moreover, industry-finance integration will be employed to speed up the development of the Company. As a responsible corporate-citizen, China Nonferrous Mining will continue to implement the development vision of innovation, coordination, eco-friendliness, openness and sharing . While developing resources, the Group also highly values the environmental protection and the sustainable use of resources. We will seek to ensure the safety and efficiency of production, strictly abide by various employment regulations and governance practices, improve the working environment of the staff, and properly handle concerns of stakeholders such as suppliers and communities so as to repay the shareholders with excellent performance and in turn realize win-win cooperation and harmonious development. Tongzhou Wang Chairman of the Board China Nonferrous Mining Corporation Limited Hong Kong,

29 March

2019 6 OPERATING RESULTS In 2018, the Group recorded revenue of US$2,053.3 million, representing an increase of US$214.6 million from US$1,838.7 million in 2017. In 2018, the Group recorded profit attributable to owners of the Company of US$146.3 million, increased by US$3.9 million from US$142.4 million in 2017. CHANGES IN PRODUCT OUTPUT In 2018, the Group produced 37,205 tonnes of copper contained in copper concentrate, representing an increase of 7.1% year-on-year. In 2018, the Group produced 220,479 tonnes of blister copper &

copper anode, representing a decrease of 2.0% year-on-year. In 2018, the Group produced 96,870 tonnes of copper cathodes, representing an increase of 8.8% year-on-year. In 2018, the Group produced 593,983 tonnes of sulphuric acid, representing a decrease of 0.1% year-on-year. In 2018, the Group produced 1,136 tonnes of copper-cobalt alloy, representing a decrease of 6.8% year-on-year. The production systems of copper and sulfuric acid continued the heavy-loaded productivity. Electrode workshop of Muliashi Project

7 STEADY PROGRESS IN PROJECT DEVELOPMENT The main part of the integrated exploration and construction project of the Chambishi Southeast Mine of NFCA was completed and put into use in the third quarter of

2018 and started trial production on

22 August. The Tailings Pond Phase II Project of CCS commenced on

1 May

2017 and would last for

15 months. As of

31 December 2018, the project had been completed. The reconstruction and expansion project of the Mwambashi Strip Mine Project of SML commenced in April 2016. As of the end of December 2018, the tail-in work of the reconstruction and expansion of the processing system was under progress with an estimated total investment amount of US$2,892,500. Baluba East Strip Mine project has a designed capacity of 900,000 tonnes of quality oxide ........