Chinese copper enterprises are becoming an important source of incremental copper production.

On January 4th, Luoyang Molybdenum Industry announced its main product output for 2023. The combined copper production from all mining areas in Luoyang reached 419,500 tons, an increase of over 140,000 tons compared to 2022, representing a 51% year-on-year growth. According to publicly available data, Luoyang Molybdenum Industry has solidified its position as the second-largest copper producer in China and is also close to being among the top ten globally.

Bloomberg believes that Luoyang Molybdenum Industry has joined the ranks of the world's top copper producers. Additionally, the company's cobalt production in 2023 surged by 174% to reach 55,526 tons. Reuters reported that Glencore, the world's largest cobalt producer, had estimated its cobalt production for 2023 in the range of 34,000 to 42,000 tons in its third-quarter production report. Consequently, Reuters pointed out that Luoyang Molybdenum Industry has become the world's largest cobalt producer.

Earlier, Zijin Mining Group also released its production data, indicating that its mines produced 1.01 million tons of copper at the source, an increase of 100,000 tons from the previous year, representing an 11% year-on-year growth.

In 2023, Luoyang Molybdenum Industry and Zijin Mining Group together produced over 1.4 million tons of copper, contributing over 240,000 tons of incremental production. According to the International Copper Study Group (ICSG), global copper mine production (metal content) was 21.922 million tons in 2022, and it is predicted to grow by 3% in 2023. Based on this statistical scope, the combined new copper production of these two Chinese mining companies for the whole year of 2023 will account for approximately 37% of the global increment.

ICSG data shows that Chile, Peru, the Democratic Republic of the Congo, China, and the United States were the top five global copper-producing countries in 2022, with production volumes of 5.324, 2.439, 2.295, 1.938, and 1.259 million tons, respectively. This means that the latest combined production volume of Zijin Mining Group and Luoyang Molybdenum Industry has surpassed the annual production of the United States in 2022.

Copper is not only an industrial metal but also a new energy metal, representing a category of metals that will be widely used in the future. Zijin Mining Group and Luoyang Molybdenum Industry are Chinese star enterprises that have "gone global" in recent years, both focusing on copper as a primary metal in their strategies.

The increase in copper production by Luoyang Molybdenum Industry mainly comes from its two world-class copper-cobalt mines in the Democratic Republic of the Congo, TFM, and KFM. According to Luoyang Molybdenum Industry's official WeChat account, by the end of 2023, all three production lines of the TFM mixed ore project had been completed and put into operation, with a total of five production lines, although the new production lines have not yet reached full capacity. The first phase of the KFM project was put into operation in the second quarter of this year and achieved full production.

According to information on Zijin Mining Group's official website, the company owns more than ten copper mines, including the Kamoa copper mine in the Democratic Republic of the Congo, the Chukaru Peki copper (gold) mine in Serbia, and the Julong copper mine, all of which are world-class super-large copper mines that have entered the first phase of production in a short period of time.

In fact, the contribution of these two companies to the increase in global copper production in 2023 is not surprising.

Sun Ruiwen, President of Luoyang Molybdenum Industry, revealed in his New Year's address, "The main backbone mines have achieved stable and high production, and the output of main products has reached a record high, with explosive growth in copper and cobalt products."

Chen Jinghe, Chairman of Zijin Mining Group, stated in his New Year's address on January 1st, "The output of main mining products such as gold and copper has continued to grow rapidly, making it one of the few leading mining companies in the world that has maintained a continuous increase in production capacity, and the production of copper is expected to exceed 1 million tons."

According to publicly available data, Zijin Mining Group's copper production in 2023 is expected to rank among the top five globally, and Luoyang Molybdenum Industry is close to entering the top ten globally. In 2022, the fifth-largest copper producer globally was Southern Copper Corporation with a production of 894,700 tons, and the tenth was KGHM Polska Miedz S.A. with a production of 449,000 tons.

However, once the three production lines of the TFM mixed ore of Luoyang Molybdenum Industry reach full capacity in 2024 and KFM achieves overproduction, Luoyang Molybdenum Industry's copper production will further increase. Zhou Jun, Vice President of Luoyang Molybdenum Industry, previously estimated to the media that in 2024, the overall copper production of TFM is expected to reach 450,000 tons, and KFM is expected to challenge 150,000 tons of copper production. Luoyang Molybdenum Industry is expected to join the top ten global copper companies no later than 2024, following Zijin Mining Group.

In addition, with the rise in copper prices since November last year and the upward shift in the median forecast, the performance of Zijin Mining Group and Luoyang Molybdenum Industry may be further guaranteed.

For example, Huaxin Securities' research report predicts that Zijin Mining Group's revenue for 2023-2025 will be RMB 336.788 billion, RMB 415.080 billion, and RMB 511.740 billion, with a net profit attributable to the parent company of RMB 23.346 billion, RMB 27.053 billion, and RMB 30.110 billion, respectively. Luoyang Molybdenum Industry's revenue for 2023-2025 is expected to be RMB 188.435 billion, RMB 204.472 billion, and RMB 220.503 billion, with a net profit attributable to the parent company of RMB 7.687 billion, RMB 9.352 billion, and RMB 11.067 billion, respectively.

Apart from the companies themselves, the greater significance lies in the fact that Chinese mining companies, including Zijin Mining Group and Luoyang Molybdenum Industry, are continuing to accelerate their guarantee of upstream