Financial News Agency, October 27 (Reporter Leung Heung-cai)Thanks to the resolution of the restricted issue in the Democratic Republic of the Congo (DRC), production and sales of copper and cobalt, the two main products of Luoyang Molybdenum Industry (603993.SH), are booming.

Relevant company sources told the Finance Association reporter that sales were affected by export restrictions on TFM mineral products from the Democratic Republic of the Congo (DRC) in the first quarter, and the average sales price of cobalt and phosphorus products fell compared to the same period last year, which dragged down the performance of the first three quarters, but with the lifting of local restrictions, copper and cobalt production and sales in the third quarter increased significantly compared to the same period last year.

This evening, Luoyang Molybdenum Industry released its three-quarter report. In the first three quarters, the company achieved revenue of 131,682 billion yuan, down 0.59% year on year; net profit was 2,443 billion yuan, down 53.96% year on year.

On a quarterly basis, the Q3 performance of Luoyang Molybdenum Industry was impressive, achieving revenue of 44.956 billion yuan, an increase of 10.45% over the previous year, an increase of 5.9% over the previous year; net profit of 1.74 billion yuan, an increase of 50.26% over the previous year, an increase of 351% over the previous year.

In terms of the two main products, in the first three quarters, the company produced 2671,000 tons of copper and metal, up 42.56% year on year, sales volume 304,800 tons, up 133.74% year on year; in terms of cobalt products, output was 37,300 tons, up 143.89% year on year, and sales volume was 23,800 tons, up 94.96% year on year.

Going back briefly, in August 2021, Luoyang Molybdenum Co., Ltd. announced that it had passed the investment bill for the TFM copper-cobalt mixed ore project. This plan to expand production has led to a dispute over equity in the TFM copper and cobalt mine, and exports have been restricted. In a “contest” that lasted nearly two years, the two sides finally reached an agreement in April of this year. After that, stocks such as copper and cobalt, which had been stranded in the region until then, will leave Hong Kong one after another and be shipped globally.

According to the disclosure, the first phase of the KFM copper-cobalt mine construction project has now been put into operation and reached production. In September, it produced more than 14,000 tons of copper and 5,600 tons of cobalt; all three TFM mixed mine production lines have been put into operation. Relevant company sources said that with the completion of two major world-class projects, Luoyang Molybdenum's copper and cobalt production capacity is expected to increase further in the fourth quarter. Next year, the company's copper and metal production in the Democratic Republic of the Congo (DRC) is expected to reach around 600,000 tons.

It should be noted that in the first three quarters of the Luoyang molybdenum industry, non-recurring profit and loss accounted for a relatively high share of net profit. The company's non-net profit for the first three quarters was 1,355 billion yuan, accounting for more than half of the current net profit of 2,443 billion yuan.

In response, a reporter from the Financial Association found in the company's financial report that the company's non-recurring profit and loss for the first three quarters totaled 1,088 billion yuan, of which the main factor was the change of 1,014 billion yuan in the fair value of financial instruments derived from the company's IXM (Exxon) metal trading business.

Relevant company sources said that at present, under the leadership of the newly appointed management team, Exxon has completed organizational upgrades, optimized business lines, enhanced the strength of the trading team, and strengthened physical goods trade. It achieved a profit of 580 million yuan in the first three quarters, and the changes in trade sector management are beginning to bear fruit.