KFM copper and cobalt project planning comes to fruition. Luoyang Molybdenum's leading position in the mining industry gradually improved

(1) The announcement expects that the KFM Phase I project will be put into operation in 1H23, and is expected to contribute 90,000 and 30,000 metal tons of copper and cobalt respectively per year after reaching production.

(2) The Company's TFM mixed mine project is also scheduled to commence production in 2023 and is expected to add 200,000 and 17,000 tonnes of copper and cobalt per annum respectively after reaching production.

(3) With the successive launch of the two copper and cobalt projects, the annual production of copper and cobalt in the Company's DRC segment will climb from 230,000 and 19,000 tonnes in FY22 to 54,000 and 72,000 tonnes per annum in FY24, respectively.

In 2021, Luoyang Molybdenum signed a strategic cooperation agreement with CATL (75% and 25% shareholding in the project), under which the two sides will jointly develop the KFM project and launch an underwriting cooperation model. According to the company, the second phase of the KFM project may be advanced depending on the market development and there is room for further expansion in the future.

In addition to the KFM copper and cobalt mine announced in this announcement, Luoyang Molybdenum's other world-class copper and cobalt mining resource, TFM's mixed mine project, is also under construction. According to the previous announcement, the company intends to invest US$2.51 billion in the construction of the TFM mixed mine, which is scheduled to go into production in 2023. With the release of products from the two world-class copper and cobalt mining projects, Luoyang Molybdenum's position as a leading international mining company is gradually being enhanced.

(1) Huatai expects copper prices to be under pressure in the short term against the backdrop of a small supply-side easing and expected recessionary pressures and to oscillate in the $7,500-9,500/tonne range. It is estimated that copper concentrate volumes will increase by 1.06 million tonnes or 5.8% this year and lead to a small supply surplus of 95,000 tonnes.

(2) Copper supply-side constraints are expected to emerge from 2024 onwards, due to a lack of mine capital expenditure and declining ore grades. At the same time, driven by the installation of new energy vehicles, wind power, and photovoltaic power generation as well as the upgrading of power grids, copper demand may grow steadily in the long term and copper prices will enter an upward cycle with fundamental support.