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| Wednesday, 12 September 2012, 08:00 HKT/SGT | |
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HONG KONG, Sept 12, 2012 - (ACN Newswire) - CMOC (HK:3993) recently issued an announcement on initiating offering of 542 million shares in the Mainland China with proceeds of RMB3,646 million to be raised, which will be invested in four major projects, namely, the "Clean and Efficient Resource Integrated Utilisation and Construction Project with an Annual Processing Capacity of 42,000 Tonnes of Low-grade and Complex Scheelite Ores", the Ammonium Molybdate Production Line Project with an Annual Production Capacity of 10,000 Tonnes,the High-performance Cemented Carbide Project and the Deep Processing Project of Tungsten Products and Tungsten Alloy Materials.
As disclosed in the prospectus, CMOC, ranking the fourth in the global molybdenum industry and the first in China, has developed itself into the second largest tungsten concentrate producer in China. The Company has established three scheelite processing production lines with a daily processing capacity of 30,000 tonnes (including a daily processing capacity of 15,000 tonnes from Yulu Mining, an associate of the Company). From 2009 to 2011, the Company's annual production volume of tungsten concentrates (i.e. standard ores containing 65% WO3) amounted to 4,222 tonnes, 5,092 tonnes and 7,261 tonnes, respectively. In addition, from 2009 to 2011, the annual production volume of tungsten concentrates (i.e. standard ores containing 65% WO3) of Yulu Mining, an associate of the Company, amounted to 2,459 tonnes, 3,261 tonnes and 4,409 tonnes. The domestic market share of the Company's production volume of tungsten concentrates reached almost 10%.
Tungsten, a rare strategic resource, has been widely applied in cemented carbide and special steel products. The rapid development and industrial grade of the high-end manufacturing industry will stimulate the demand for downstream products. According to relevant statistics, the total proven tungsten reserve in the world only reached 2,900,000 tonnes with a mining life less than 40 years. As the largest tungsten producer and consumer in the world, China possesses more than 65% of the total proven tungsten reserve of the world and contributes more than 80% of the global production volume. In order to preserve the domestic tungsten resources and facilitate the Tungsten industry upgrade, the Chinese government successively launched a number of policies to constrain the development of upstream industries such as control over the production volume of tungsten concentrates as well as restriction and elimination of outdated upstream production capacity, and also strived to promote the development of tungsten downstream deep processing industries by adjusting export quotas and implementing the import tax policy. Tungsten is one of the rare metals with stable market performance and its supply in the global market primarily relies on China, likewise the rare earth. For recent years, China has reduced tungsten export quotas on an on-going basis, as evidenced by a decrease of 300 tonnes in 2012, which made the tungsten resources scarcer and gave strong support to the price performance.
CMOC owns the Sandaozhuang Molybdenum and Tungsten Mine, which boasted mining resources with "large reserve, high grade and easy access to mining and processing" and was the second largest scheelite mine in China with a tungsten metal reserve of 400,000 tonnes. The Company leveraged world-leading technologies of low-grade scheelite ore processing to recycle scheelite from molybdenum tailings, which saved the mining, transportation and grinding costs as compared with monomer tungsten mines and achieved a gross profit margin that was almost up to 80%. Meanwhile, attributable to the year-on-year decline in the stripping ratio of mines, the recycling ratio of scheelite saw a continuous hike, giving prominence to the cost advantage. Thanks to the growing production volume of scheelite, the Company estimates greater contribution to the net profit of the Company from the scheelite segment. In the first half of 2012, the gross profit of tungsten products accounted for 38.4% of the gross profit of the principal businesses of the Company.
In China, the tungsten mines are primarily held by several companies such as China Minmetals, CMOC and Xiamen Tungsten, thus ensuring a comparatively concentrated upstream supply. The Chinese government also successively promulgated policies on industry admission, total mining volume control, export quotas and tariff increase, which exerted control over mining and export of tungsten concentrates, further concentrated the supply in the industry and facilitated the overall control over strategic mining. The on-going industry restructuring in China bodes well for the demand and tungsten price.
Topic: Production report
Sectors: Metals & Mining, Daily Finance, Daily News
https://www.acnnewswire.com
From the Asia Corporate News Network
Copyright © 2025 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.
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