Specialty Raw Materials
CITIC Metal is primarily engaged in commodities trading and mining investments and aspires to become a top-tier trader and investor in the field. CITIC Metal specialises in trading a wide range of products, including iron ore, steel, chrome ore and manganese ore, as well as copper, aluminium, niobium and nickel. The company’s investment portfolio includes Ivanhoe Mines (IVN.TO; 24.81% shareholding), Las Bambas Copper Mine in Peru, Brazilian niobium miner CBMM, Western Superconducting Technologies (688122.SH; 11.89% shareholding), China Platinum Company and others.
In 2023, CITIC Metal achieved revenue of RMB125 billion, an increase of 4.9% year-on-year, and profit attributable to the shareholders of the listed company of RMB2.1 billion, a decrease of 7.1% year-on-year.
In 2023, CITIC Metal proactively pursued national strategies of becoming a “Trade Powerhouse” and “Going Global,” while focusing on the development of its commodity trading business. The company made significant progress in investment project construction, maintaining a healthy and stable growth trajectory. In the niobium products sector, CITIC Metal solidified its position as an industry leader, with a market share of over 80%. Iron ore trading volume remained stable, surpassing 50 million tonnes and maintaining industry leadership. The company steadily developed its trade in copper concentrate and expanded trade in blister copper and electrolytic copper, resulting in rapid growth of its copper products business and increased industry influence. In other trading businesses such as steel and aluminium, the company adhered to risk management principles ensuring favourable operating performance, steady progress and growth in the business overall.
CITIC Metal’s overseas mineral resource projects progressed smoothly, yielding good investment returns. The expansion and technical upgrades of Phase I and II of KK Copper Mine, which is owned by its associate, Ivanhoe Mines, were completed and Phase III progressed smoothly. The mine’s annual production of copper metal reached nearly 400,000 tonnes, setting a new record. At Peru’s Las Bambas Copper Mine, appropriate measures were taken to address community and roadblock issues. Following the resumption of stable production in the first quarter, all operations proceeded smoothly and in an organised manner, successfully achieving operational targets. The production of annual copper concentrate reached 300,000 tonnes. Production and operations of Brazilian niobium miner CBMM remained stable. China Niobium achieved a significant milestone in its distribution of shareholder dividends for the first time, contributing strong investment returns to CITIC Metal and actively contributing to the stable supply of national mineral resources.
CITIC Metal made a significant effort over the year to establish a capital operations platform. In April 2023, CITIC Metal became one of the first group of enterprises that officially listed on the A-share stock market under the main board registration system. This accomplishment not only strengthened the foundation for sustainable development, but also contributed to enhancing the market value of CITIC Limited.
With a commitment to “green, low-carbon and innovative” development principles, CITIC Metal will continue to advance its core business in commodity trading and mining investment to make positive contributions to the stability and security of supply chains for national resources industries.
In 2023, CITIC Metal proactively pursued national strategies of becoming a “Trade Powerhouse” and “Going Global,” while focusing on the development of its commodity trading business. The company made significant progress in investment project construction, maintaining a healthy and stable growth trajectory. In the niobium products sector, CITIC Metal solidified its position as an industry leader, with a market share of over 80%. Iron ore trading volume remained stable, surpassing 50 million tonnes and maintaining industry leadership. The company steadily developed its trade in copper concentrate and expanded trade in blister copper and electrolytic copper, resulting in rapid growth of its copper products business and increased industry influence. In other trading businesses such as steel and aluminium, the company adhered to risk management principles ensuring favourable operating performance, steady progress and growth in the business overall.
CITIC Metal’s overseas mineral resource projects progressed smoothly, yielding good investment returns. The expansion and technical upgrades of Phase I and II of KK Copper Mine, which is owned by its associate, Ivanhoe Mines, were completed and Phase III progressed smoothly. The mine’s annual production of copper metal reached nearly 400,000 tonnes, setting a new record. At Peru’s Las Bambas Copper Mine, appropriate measures were taken to address community and roadblock issues. Following the resumption of stable production in the first quarter, all operations proceeded smoothly and in an organised manner, successfully achieving operational targets. The production of annual copper concentrate reached 300,000 tonnes. Production and operations of Brazilian niobium miner CBMM remained stable. China Niobium achieved a significant milestone in its distribution of shareholder dividends for the first time, contributing strong investment returns to CITIC Metal and actively contributing to the stable supply of national mineral resources.
CITIC Metal made a significant effort over the year to establish a capital operations platform. In April 2023, CITIC Metal became one of the first group of enterprises that officially listed on the A-share stock market under the main board registration system. This accomplishment not only strengthened the foundation for sustainable development, but also contributed to enhancing the market value of CITIC Limited.
With a commitment to “green, low-carbon and innovative” development principles, CITIC Metal will continue to advance its core business in commodity trading and mining investment to make positive contributions to the stability and security of supply chains for national resources industries.
Sino Iron, developed by CITIC Mining International (CMI) through its Australian subsidiary CITIC Pacific Mining, is Australia’s leading magnetite concentrate operation and a major supplier of premium feedstock to Chinese and other Asian steel mills.
Located on the coast of Western Australia’s Pilbara region, the fully integrated mining, processing and export facility has been producing a premium, low impurity 65% Fe concentrate for more than a decade. CITIC has an aggregate entitlement to three billion tonnes of magnetite ore, via mining right acquisitions in 2006, 2008 and 2021, supporting a mine life of more than 40 years.
Utilising conventional drill and blast open pit mining techniques, ore is conveyed from in-pit crushers to a six-line concentrator where it is fed into some of the world’s biggest grinding mills and then undergoes further separation from waste material. Concentrate is then pumped in slurry form to a purpose-built port and prepared for transhipment to CITIC’s ocean-going vessels.
Supporting infrastructure includes a 480MW combined cycle gas-fired power station, 40% more efficient than open cycle equivalents, and a large-scale reverse osmosis desalination plant. Independent life cycle analysis (commissioned by CMI) demonstrates a lower carbon emissions benefit across the steel cycle (mine pit to ironmaking) when using Cape Preston Concentrate in the blast furnace compared to typical Platts 62% Fe Pilbara hematite fines.
In 2023 Sino Iron achieved exports 21.04 million wet metric tonnes of concentrate to CITIC’s special steel plants and other steel mills, despite challenging weather conditions late in the year. It achieved a net profit attributable to the parent company of US$540 million. Sino Iron remains the world’s largest seaborne supplier of magnetite concentrate to China.
CITIC has finalised its transition to a Mine Safety Management System (MSMS) in line with new Work, Health and Safety (WHS) legislation and also redesigned its framework to manage critical risks and controls for the operation.
Sino Iron still faces several challenges to sustainability. Commodity prices remain volatile and the Australian mining industry continues to experience labour shortages and cost pressures.
Continued operation requires extension of current operations beyond the project’s existing approved footprint. This is driven by the need to extend the mine pit and accommodate waste rock and tailings, which are necessary by-products of the mining and beneficiation processes.
The mining tenements upon which the Sino Iron Project is currently conducted, and those into which the CITIC Parties wish to extend in order to continue operation, are held by an unrelated third-party tenement holder, whose cooperation is required for the extensions.
Unless approval can be obtained to allow extension of the mine pit and establishment of additional storage areas for waste rock and tailings, constraints on pit size and waste and tailings storage capacity will ultimately force the suspension of operations. In the short-term, these constraints are reflected in reduced concentrate production for calendar year 2024.
It remains the case that that Sino Iron requires the support of all stakeholders to reach its full potential and secure the project’s long-term future.
Utilising conventional drill and blast open pit mining techniques, ore is conveyed from in-pit crushers to a six-line concentrator where it is fed into some of the world’s biggest grinding mills and then undergoes further separation from waste material. Concentrate is then pumped in slurry form to a purpose-built port and prepared for transhipment to CITIC’s ocean-going vessels.
Supporting infrastructure includes a 480MW combined cycle gas-fired power station, 40% more efficient than open cycle equivalents, and a large-scale reverse osmosis desalination plant. Independent life cycle analysis (commissioned by CMI) demonstrates a lower carbon emissions benefit across the steel cycle (mine pit to ironmaking) when using Cape Preston Concentrate in the blast furnace compared to typical Platts 62% Fe Pilbara hematite fines.
In 2023 Sino Iron achieved exports 21.04 million wet metric tonnes of concentrate to CITIC’s special steel plants and other steel mills, despite challenging weather conditions late in the year. It achieved a net profit attributable to the parent company of US$540 million. Sino Iron remains the world’s largest seaborne supplier of magnetite concentrate to China.
CITIC has finalised its transition to a Mine Safety Management System (MSMS) in line with new Work, Health and Safety (WHS) legislation and also redesigned its framework to manage critical risks and controls for the operation.
Sino Iron still faces several challenges to sustainability. Commodity prices remain volatile and the Australian mining industry continues to experience labour shortages and cost pressures.
Continued operation requires extension of current operations beyond the project’s existing approved footprint. This is driven by the need to extend the mine pit and accommodate waste rock and tailings, which are necessary by-products of the mining and beneficiation processes.
The mining tenements upon which the Sino Iron Project is currently conducted, and those into which the CITIC Parties wish to extend in order to continue operation, are held by an unrelated third-party tenement holder, whose cooperation is required for the extensions.
Unless approval can be obtained to allow extension of the mine pit and establishment of additional storage areas for waste rock and tailings, constraints on pit size and waste and tailings storage capacity will ultimately force the suspension of operations. In the short-term, these constraints are reflected in reduced concentrate production for calendar year 2024.
It remains the case that that Sino Iron requires the support of all stakeholders to reach its full potential and secure the project’s long-term future.
CITIC Resources, listed on the Hong Kong Stock Exchange, conducts its principal business in the exploration, development and production of oil. It also invests in coal mining, the import and export of commodities, electrolytic aluminium, bauxite mining and alumina smelting.
In 2023, CITIC Resources recorded operating revenue of approximately HK$3.83 billion, a year-on-year decrease of 34.8%. Profit attributable to ordinary shareholders was approximately HK$550 million, a year-on-year decrease of 58.7%.
In 2023, KBM Oilfield faced a series of severe challenges including widespread power outages in the external power grid and inflation in the host country. These challenges had a significant impact on crude oil production. However, KBM Oilfield implemented remedial measures and continuously carried out adaptive measures to stabilise production, making every effort to protect and safeguard its crude oil output.
In 2023, Yuedong Oilfield achieved output of approximately 459,300 tonnes of crude oil through the implementation of its development adjustment programme. During the year, Yuedong Oilfield commissioned 15 new oil wells. As of 31 December 2023, a total of 83 adjustment oil wells were put into operation, with annual oil production of approximately 189,000 tonnes, forming an effective capacity replacement.
The Seram Oilfield in Indonesia made significant progress in the Lofin-2 gas trial work and effectively reduced overall costs through rigorous management. By applying new technologies and processes, the oilfield was able to successfully mitigate the impact of its gradual depletion, and extended its economic production lifespan.
To unlock the potential of the oilfield, CITIC Resources undertook oil testing and trial extraction operations, conducting in-depth research to formulate drilling plans. The company implemented effective measures to steadily improve production levels and enhanced reservoir dynamics studies. Additionally, the managements took optimised measures to achieve increased oil reserves and production. CITIC Resources was committed to advancing research projects, ensuring the practical application of research findings, which provided a material foundation to bolster development of the oilfield.
During the year, CITIC Resources focused on the core mission of “improving quality and efficiency” by actively demonstrating scientific and technological innovation. The company also improved its financial management, risk prevention and control capabilities. Planning with scientific foresight, it took the initiative to optimise management systems through top-level design, fostered reform momentum, and stimulated enthusiasm in the workplace to unleash business potential. The above initiatives have contributed to a favourable corporate atmosphere, where efficiency is maximised in both management and technology, leading to the achievement of satisfactory results in both production operations and business performance.
Oil and Gas Business
Operating revenue from the oil and gas segment reached HK$1.5 billion, a year-on-year decrease of 20.5%. The three oilfields under the segment produced a total of 9.15 million barrels of crude oil, a decrease of 5.3% compared with 2022. Although crude oil production has undergone multiple tests and challenges, the company demonstrated unity, worked together and overcame all difficulties. Through the implementation of a comprehensive safety management system, the adoption of various measures to increase storage and production, and embracing new technologies and processes, the company was able to harness its development potential and has achieved safe and environmentally friendly production, ensuring overall stability in production output.| Oilfields | CITIC Resources’ interest | Daily oil production in 2023 (share of the output, barrels) | Change compared to 2022 (barrels) | Proven oil reserve estimates as of 31 December 2023 (share of the output) |
|---|---|---|---|---|
| KBM Oilfield (Kazakhstan) | 50% | 18,800 | -800 | 65.2 million barrels |
| Yuedong Oilfield (China) | 90% | 5,882 | -529 | 21.9 million barrels |
| Seram Block (Indonesia) | 41% | 409 | -57 | 1.1 million barrels |
In 2023, Yuedong Oilfield achieved output of approximately 459,300 tonnes of crude oil through the implementation of its development adjustment programme. During the year, Yuedong Oilfield commissioned 15 new oil wells. As of 31 December 2023, a total of 83 adjustment oil wells were put into operation, with annual oil production of approximately 189,000 tonnes, forming an effective capacity replacement.
The Seram Oilfield in Indonesia made significant progress in the Lofin-2 gas trial work and effectively reduced overall costs through rigorous management. By applying new technologies and processes, the oilfield was able to successfully mitigate the impact of its gradual depletion, and extended its economic production lifespan.
To unlock the potential of the oilfield, CITIC Resources undertook oil testing and trial extraction operations, conducting in-depth research to formulate drilling plans. The company implemented effective measures to steadily improve production levels and enhanced reservoir dynamics studies. Additionally, the managements took optimised measures to achieve increased oil reserves and production. CITIC Resources was committed to advancing research projects, ensuring the practical application of research findings, which provided a material foundation to bolster development of the oilfield.
During the year, CITIC Resources focused on the core mission of “improving quality and efficiency” by actively demonstrating scientific and technological innovation. The company also improved its financial management, risk prevention and control capabilities. Planning with scientific foresight, it took the initiative to optimise management systems through top-level design, fostered reform momentum, and stimulated enthusiasm in the workplace to unleash business potential. The above initiatives have contributed to a favourable corporate atmosphere, where efficiency is maximised in both management and technology, leading to the achievement of satisfactory results in both production operations and business performance.
Other Businesses
CITIC Resources Australia Pty Ltd continued to maintain stable sales volume and recorded satisfactory performance in each business line despite a volatile commodities market environment in 2023. Annual sales of aluminium ingots reached 67,000 tonnes, while that of PCI coal reached 640,000 tonnes. Due to the impact of declining aluminium prices and rising production costs, Alumina Limited (AWC.ASX), in which CITIC Resources holds a 9.6% stake, was unable to distribute dividend payments in 2023. CITIC Pacific Energy invests in and manages power plants in China with supporting businesses that extend across the industrial supply chain, from mining and shipping to power sales and heat supply. The company also actively invests in green energy businesses including solar and wind power generation.
CITIC Pacific Energy’s coal-fired power stations have a total installed capacity of 8,050MW. The Ligang Power Plant in Jiangsu Province is currently one of the largest thermal power plants in China, with an installed capacity of 4,040MW. CITIC Pacific Energy has also implemented an integrated strategy for its power generation business that incorporates shipping, bulk cargo terminal logistics and the comprehensive utilisation of resources (CUR). The expansion project of Ligang Phase V, consisting of 2×1,000MW clean and efficient coal-fired units, has already started construction. The Ligang Phase V project, which emphasises transparency, safety, efficiency and high quality, will continue to serve the local economy during the 15th Five-Year Plan period, providing safe and reliable electricity and industrial steam. The Inner Mongolia Shenglu Power Plant, an ultra-supercritical air-cooling power generation project with an installed capacity of 2×1,000MW, is the first million-kW-unit project in Inner Mongolia commissioned under the West-East Power Transmission scheme, providing over 10 billion kWh of electricity to Shandong Province per annum. The company has invested in Xin Julong coal mine in Shandong Province, with an approved production capacity of six million tonnes per year, producing high-quality coking coal with a competitive edge in the market.
In 2023, CITIC Pacific Energy generated a total of 42.2 billion kWh of electricity. In the face of a complex external environment, the company focused on growing its core business during the reporting period, including progressing its transformation and development, operational management, cost reduction and efficiency, and risk mitigation. Ligang Power Plant generated 21.79 billion kWh of power while ensuring the demand for electricity and energy. Shandong Xin Julong Coal Mine maintained stable production and operations with an annual commercial coal output of 3.75 million tonnes, yielding an excellent operational result for the year and benefiting from economic recovery and stable coking coal prices. CITIC Pacific Energy continued to strengthen the development of green energy projects. These include projects under construction and completed projects, with a total capacity of 1,601 MW, with 1,436MW connected to the power grid by the end of 2023. The project in Xilinhot City, Inner Mongolia with a centralised wind power capacity of 1,000MW has been successfully connected to the power grid at the end of 2023. Adopting a comprehensive green energy development strategy in mainland China, the company is investing in energy transition systematically, including onshore wind power, offshore wind power, solar power and energy storage with reserved projects of over 5GW of wind power, including over 4GW of photovoltaic and 1GW of offshore wind power distributed throughout most provinces in China.
In 2023, CITIC Pacific Energy generated a total of 42.2 billion kWh of electricity. In the face of a complex external environment, the company focused on growing its core business during the reporting period, including progressing its transformation and development, operational management, cost reduction and efficiency, and risk mitigation. Ligang Power Plant generated 21.79 billion kWh of power while ensuring the demand for electricity and energy. Shandong Xin Julong Coal Mine maintained stable production and operations with an annual commercial coal output of 3.75 million tonnes, yielding an excellent operational result for the year and benefiting from economic recovery and stable coking coal prices. CITIC Pacific Energy continued to strengthen the development of green energy projects. These include projects under construction and completed projects, with a total capacity of 1,601 MW, with 1,436MW connected to the power grid by the end of 2023. The project in Xilinhot City, Inner Mongolia with a centralised wind power capacity of 1,000MW has been successfully connected to the power grid at the end of 2023. Adopting a comprehensive green energy development strategy in mainland China, the company is investing in energy transition systematically, including onshore wind power, offshore wind power, solar power and energy storage with reserved projects of over 5GW of wind power, including over 4GW of photovoltaic and 1GW of offshore wind power distributed throughout most provinces in China.