Western Mining Co said yesterday that 2007 earnings rose 12.15 percent as China' s second-largest lead concentrate producer benefits from higher metal prices.
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Lead futures on the London metal Exchange averaged US$2,903 a metric ton in the year to date, compared with US$1,738 in the same period last year, according to Bloomberg News data, though they are now about 30 percent off last October's record high.
Mining contributes to more than 90 percent of Western Mining's profit, while smelting accounts for a small proportion. This allowed the firm to avoid the huge volatility of nonferrous metal prices and led to the moderate earnings growth, analysts said.
LME lead prices rose last year partly because of reduced exports from Chinese lead smelters after a government export tax adjustment. Lead concentrate is a semi-processed material sent to smelters.
Western Mining, also a zinc and copper miner, has been expanding by acquiring mining assets and planning new investments in smelters.
The Xining, Qinghai Province-based company has a 58-percent stake in Yulong copper mine in Tibet, China's biggest copper deposit, that will start initial production in the third quarter this year.
It has also agreed with local government to spend three billion yuan on a 100,000-ton-a-year lead smelter and a 100,000-ton-a-year zinc smelter in Xiangfan, Hubei Province.
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