The company announced on November 20th that it intends to set up Sichuan Hongda Molybdenum and Copper Co., Ltd. to invest RMB 100 million in currency to carry out the project of deep processing and comprehensive utilization of molybdenum and copper polymetallic resources. it mainly includes the construction of molybdenum (metal) 40,000 t hand a device, cathode copper 400000 t hand a device, associated rare and precious metal recovery device, smelting flue gas sulphuric acid plant, etc., with a total investment of 10.188 billion yuan.
The metal business has reached a new level. The 40 000 t / a molybdenum project and 400000 t / a copper project to be invested by the company are large-scale smelting projects. in terms of smelting capacity alone, the molybdenum production capacity will exceed 16000 tons of gold and molybdenum shares (molybdenum metal). The copper production capacity will be second only to 900000 tons of Jiang Copper, 800000 tons of Tongling and 600000 tons of Yunnan Copper, coupled with the existing zinc smelting capacity of 200000 tons per year, the company's metal business will not only be expanded in terms of varieties in the future. it will also reach a new level in comprehensive production capacity.
Molybdenum and copper resources are expected to surface. A skillful housewife cannot make bricks without rice. According to the relevant regulations of the government, if there is no follow-up resources to follow up, the application for approval of smelting projects can only be empty talk. According to the requirements of the "Copper smelting Industry access conditions" of the National Development and Reform Commission, the copper smelting capacity of a single system is 100000 tons / year or more, and the proportion of raw materials in self-owned mines should reach more than 25%. We infer that the company's self-sufficient copper concentrate should be at least 100000 tons / year, and if estimated on the basis of an average service life of 20 years in the mining industry, the company's expected copper reserves should not be less than 2 million tons. Although the notice on openly soliciting opinions on access conditions of molybdenum industry issued by the Ministry of Industry and Information Technology at the beginning of the year did not make a requirement on the self-sufficiency rate of molybdenum resources, combined with the scale of the molybdenum smelting project to be built by the company, the molybdenum resources expected to be obtained by the company should also be considerable.
Rising costs and environmental shocks will support the performance of zinc prices. Although global smelting capacity, especially in China, has been expanding, and as lead and zinc prices have rebounded, capacity utilization has also increased. However, this kind of production capacity based on low labor, raw materials and environmental protection costs is wanton expansion or difficult to continue. Chihong Zinc Germanium, China Gold Lingnan and other large domestic lead and zinc companies shut down some smelters due to pollution problems are expected to strengthen supply rigidity.
Maintain the "overweight" rating. Under the assumption of zinc price of 17000, 18500 and 19055 yuan per ton in 2010-12, we predict that the EPS of the company in 2010-12 will be-0.28,0.30,0.70 yuan respectively.
In terms of the registered capital and investment project scale of the proposed wholly-owned subsidiary, the company's financing needs may seem quite urgent, while the major asset restructuring that failed in the previous period is expected to be strengthened.
Risk tips: investment projects were not approved, zinc prices fell, phosphorus chemical recovery encountered twists and turns again.
