China Metallurgical : Minmetals Convenes 2017 Annual Work Meeting

On the Basis of Total Profitsof RMB 4.1 Billion in 2016, theGoal of 'Three Strides and Two Doublings'is Raised

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On January 15th, the China Minmetals Corporation convened its2017 annual work meeting in Beijing to conclude the work of 2016, analyze the situation and deploy the main work of 2017. China Minmetals President and Party Committee Secretary He Wenbo attended the meeting and delivered the spirit of the Central Enterprises and Local SASAC Head Meeting. China Minmetals Director, General Manager and Party Committee Deputy Secretary GuoWenqing attended the meeting and madea work report. China Minmetals Outside Directors Shi Dahua, Lang Jia and Pan Zhengyi, State-owned Key Large Enterprises Supervisory Board 09 Office Director Li Huimin, Deputy Director Liu Chun and Division Head Yu Fengrui, and other China Minmetalsleaders were present at the meeting. China Minmetals Party Committee Deputy Secretary and Vice General Manager Dong Mingjun presided over the meeting.

This is an important annual meeting indicating the successful recombination between the two World Top 500 enterprises China Minmetals and MCC Group, at which it was announcedthat the new China Minmetalshas beenlisted among pilot enterprises for state-owned capital investment companies in the metal minerals field. Convened at a crucial time after more than half a year's adjustment and rationalization, the new Group's new prospectsarebeing opened up, itsnew image is being molded and itsnew advantages are being rebuilt. The central tasks of the meeting were: to fully complete each operation target index of 2017 by carefully implementing the spirits of the 6th Plenary Session of the 18th Central Committee of the CCP, the Central Economic Working Conference, and the Central Enterprises and Local SASAC Head Meeting, effectively strengthenthe leadership of the Party, comprehensively promote and deepen reform, take operation quality elevation as the center, take asset safety guarantee as the bottom line and take talent system optimizing as the key point; to achieve an early accomplishment of the mission to reduce and control losses, stop the bleeding, get throughthe crisis, solve difficult problems and transition peacefully; to unload burdens, work with full steam and comprehensively open a new chapter in thebuilding ofa 'China First, World First Class' metal minerals group.

In the morning of January 15th, He Wenbo conveyed the spirit of the Central Enterprises and Local SASAC Head Meeting. He introduced the relevant information of the meeting and deeply conveyedthe key instruction spirits of State Council leaders, as well asthe spirits of SASAC Party Committee Secretary Hao Peng's important speech and SASAC Director Xiao Yaqing's work report.

Hao Peng gave akeynote speech entitled 'Sticking to the leadership of the Party, strengthening Party building and providing a strong guarantee for making state-owned enterprises stronger, better and larger'. He requested the central enterprises' Party Committee (Party Organization) to deeply study and implement the guiding principles of General Secretary Xi Jinping's series of important speeches, be resolute aboutstaying at the same height asthe Party Central Committee with comrade Xi Jinping at itscore; implement the Party Central Committee's requirement to supervise its own conduct and run itself with strict discipline, and comprehensively strengthen Party construction in state-owned enterprises; holdfast to deepening supply side structural reform, and give full play to state-owned enterprises' functions as the backbone, hard core and leading example; further inspire vigorous spirit for taking action and starting up businesses, and solidly promote state-owned enterprises to become stronger, better and larger.

Xiao Yaqing gave a work report entitled 'In a down-to-earth way, working hard, and sparing no efforts to promote the reform development of state-owned enterprises state-owned capital to achieve better performance'. He summarized the overall work situation of 2016, analyzedthe economic situationand raised the overall requirements and main aims and tasks for the work of 2017. In 2016, central enterprises accumulatively gained an operation revenue of RMB 23.4 trillion, which showsyear-on-year growthof 2.6%; realized the added value of RMB 6.1 trillion, which shows year-on-year growth of 5.2%; realized the total profit of RMB 1,232.67 billion, which shows year-on-year growth of 0.5%, and excluding the profit-sapping policy factor, the year-on-year growth rate is 16.5%, there are up to 96 profitable enterprises; they paid taxes and dues reached RMB 2.1 trillion, which shows year-on-year growth of 3%. The situation of decrease in both revenue and profit wasreversed and the target for restorative growth in benefits was achieved. In 2017, central enterprises and the state asset supervision system should try hard to accomplishthe following jobs: First, make efforts to accomplish the aims and tasksof production and operation, achieve good performance and make more contributions. Second, accelerate the implementation of each reform policy and gain actual effects in important fields and key points.Third, strengthen the force ofstructural reform on the supply side, and try hard to win the battle in losing weight, intensifying health, raisingquality and increasing efficiency. Fourth, accelerate the pace ofscientific and technological innovation. Fifth, hold fast tohighlighting the main business and continuously raise the enterprise's core competence. Sixth, continue promoting functional transformation and keep enhancing supervisory efficiency. Seventh, comprehensively and strictly intensify Party construction and provide a firm guarantee for the reform development of state-owned enterprises and capital.

Combined with the real situation of the new China Minmetals, He Wenbo deeply expounded his requirements in such aspects as giving full play to the Party Organization's leading and political core function, strictly intensifyingthe construction of the enterprise'sleading group, accomplishing the aims and tasksof production and operation in 2017, strictly controlling risks, especially investment risks, enhancingthe management and control of listed companies, continuously intensifying the spirit and courage to take responsibility, and continuously creating good conditions and a good environment for working and starting up businesses.

At the meeting, GuoWenqingmadea work report entitled 'Hold fast to being led by strategies, give full play to the advantages of the recombination, and make efforts to create a 'China First, World First Class' metal mineral group'. The report comprehensively reviewed the work of 2016, deeply analyzed the situation that the new China Minmetals is facing, and elaborately deployed the key work of 2017.

GuoWenqing pointed out that in 2016, facing the complex business situation in whichthe global metal mineral business is in shock and downturn, and China's economy is shifting gears to change speed, the new China Minmetals struggled hard, overcame difficulties, actively tackled risks and challenges, and decisively treated hidden troubles and problems. In 2016, it accumulatively gained anoperation revenue of RMB 440.2 billion, showing year-on-year growth of RMB 17.9 billion, and achieved a total profit of RMB 4.1 billion, which is a good accomplishment ofSASAC's requirements,and realized a good start tothe '13thFive-year Plan'.

After a whole year of endeavors, the new China Minmetals' operation quality increased greatly. At the end of 2016, the company's asset-liability ratio dropped to 2.2% compared with the end of 2015; the cost ratio ofoperation revenue sawa 1.2% year-on-year drop; andthe real production costs of the main iron ore concentrate product decreased by 14% compared with 2015, while that of tungsten concentrate decreased by 4%and that of copper metal decreased by 9.6%. Regarding compressing the levels, reducing weight and intensifying health, the new China Minmetals was determined to subtract, the managerial level of the whole group was compressed to 4 levels, and 67 enterprises were cleaned and dropped out.

Regarding market expansion, the MCC Group'snewly signed contracts throughoutthe whole year broke the amount of RMB 500 billion, winning the bidding for a total of 39 underground pipe gallery projects, which puts itNo.1 among central enterprises; it also won the bidding for 122 PPP projects overthe whole year, and invested an amount of RMB 253.8 billion. The new China Minmetals proposed the aim ofbuilding an internal market valued atRMB 100 billion, while several projects including overseas nickel mineral importing, steel distribution to construction sites and cooperation between industrial capital and financial capital were started and gained the desired results.

Regarding scientific and technological innovation, the new China Minmetals won 1 China Patent Gold Award and 14 awards for excellent patentsin 2016, and its total number of awards ranked first among central enterprises. Among metallurgical and architectural enterprises, MCC became the one to win themost awards for excellent patents, and the only one to win aGold Award; and the patents newly applied for by MCC exceeded 3,500. MCC Group has 20,000 effective patents accumulatively, ranking fourth among central enterprises; it won 5 second place awards at the State Preeminent Science and Technology Awards, and its scientific and technological level places it in the first echelon of central enterprises.

Guo Wenqing analyzed the domestic and overseas economic situation, the industrial development tendency, and the challenges and opportunities that the new China Minmetals is facing. He pointed out that from an international perspective, the global economy in 2017 is still in the process of hard recovery, and uncertain factors affecting the global economy are increasing; from a domestic perspective, in 2017 China will maintain its main keynote to seek improvement in stability, and the growth rate of the GDP for the whole year is planned to be 6.5%. Regarding the industrial situation, the metal mineral field not only has an increasing tendency, but also theprobability of drastic fluctuation. In the field of urbanconstruction and development, the process of urbanization is accelerating, and infrastructure construction and investment in real estate are still important growth points. The yield rate of the financial service industry in 2017 may see adecrease compared with previousyears, and competition in financial mixed development will be more complex and various. As for the challenges and opportunities that thenew China Minmetals is facing, the main opportunities are that the demand for metal mineral products is increasing stably, andthe multiple service market has vast space for development. The main challenges include the fact that in the short term, the price will continuouslybe in shock, market uncertainty is increasing, the profit margin of the industry is shrinking and competition is intensifying. We should actively adapt to the big development trends, seize opportunities and tackle challengeswith all efforts.

The new China Minmetals is undertaking the state responsibility ofguaranteeing the supply safety of metal mineral resources, and the industrial mission ofleading China'smetallurgical construction to the world first classlevel. Based on ananalytical judgment ofthe domestic and foreign macro economy, industrial trends and the challenges and opportunities that the company is facing, and holding strong sense of responsibility and mission, on behalf of the operation team, GuoWenqing proposed directions and targets for new China Minmetals' development in the future: stick to the 'three steps' strategy and achieve the target of realizing 'three strides and two doublings' in 2020. The first step is to realize aprofit ofRMB 10 billion bythe end of 2017, which doubles that of 2016, and accomplish the mission of thetransitional period to stop the bleeding, control losses and conduct reorganization and reform; the second step is to realize a profit of RMB 20 billion by the end of 2018, which doubles that of 2017, and be completely equipped with the functionsof astate-owned capital investment company; the third step which involves themetal minerals situation up to 2020 is that the new China Minmetalsshouldmaintain its first place in the world for wolfram and stibium output, gain some influence and certain control force internationally in copper, nickel, lead and zinc output, and gainthe ability to globally allocate mineral resources and integrate production, supply and trade, therebyachieving the goal of becoming a 'China First, World First Class'metal mineral group, and realizing the MCC dream of protecting and serving the country.

As to the concrete work of2017, GuoWenqing required the new China Minmetals to center on the operation index and focus on the following 8 jobs: first, stick to the strategic guide, and improve and optimize top-level design. Second, be determined to win the battle of stopping the bleeding, controlling losses and solving difficulties, and actually eliminate various kinds of risks. Third, accelerate integration and fusion on the basis of building an RMB 100 billion domestic market. Fourth, hold fast tothe market orientation, and comprehensively raise the ability to face and expand the market. Fifth, promote the collectivized, regionalized and localized development of overseas business centering on the 'One BeltOne Road' layout. Sixth, vigorously implement scientific and technological innovation by taking the 29 national level key laboratories and technological platforms as the key. Seventh, comprehensively enhance basic management and continuously strengthen management and control. Eighth, hold fast to work style constructionand continue to build a clean cadre team.

The meeting wasattended by the China Minmetals Board Secretary, Labor Union President, Party Group Discipline Inspection Group Vice Director and AssistantGeneral Manager, and leading group members of MCC and the MCC Group; leading group members of each department in the head office, Party Group Inspection Team Leader, full-time board members and supervisors of subordinate enterprises, persons in charge and persons at higher levels ofMCC Group and MCC functional headquartersdepartments; leading group members of each direct management unit, and persons in charge of Party and political affairsof key backbone subsidiary enterprise; some grass-roots Party Organization representatives and staff representatives from the frontline of business, production and management.

Meeting venue

He Wenbo conveys the spirit of the Central Enterprises and Local SASAC Head Meeting

Guo Wenqing makes a work report

Dong Mingjun presides over the meeting