Business and Financial Review
Resources & Energy
Our resources and energy business comprises the exploration, mining, processing and trading of energy products and mineral resources as well as power generation. We hold interests in projects in China, Australia, Brazil, Peru, Gabon, Indonesia and Kazakhstan.
- CITIC Resources has interests in oil exploration, development and production, coal mining, import and export of commodities, aluminium smelting, bauxite mining, alumina refining, and manganese mining and processing. The company is listed on the Hong Kong Stock Exchange.
- CITIC Mining International, through its Australian subsidiary CITIC Pacific Mining, develops and operates the Sino Iron project, the largest magnetite operation in Australia.
- CITIC Metal Group invests in minerals projects and trades commodities.
- Sunburst Energy manages a number of power plants and a coal mine in China.
Year in review
In 2016, the resources and energy business generated revenue of HK$50.3 billion, increased 10% from the previous year. It incurred a loss of HK$6.9 billion, due mainly to a HK$7.2 billion non-cash impairment charge (after-tax) on the Sino Iron project in Western Australia.
Global demand for commodities and energies tracked up in 2016, but oil and commodity prices were still at a low level, which affected our crude oil business. CITIC Resources became profitable in 2016 against the backdrop of challenging environment. CITIC Limited’s power generation business remained a stable cash generator. In Peru, the Las Bambas copper mine project, in which CITIC Metal Group holds a 15% interest, also became profitable once it began commercial production in 2016.
CITIC Metal Group is a newly-established subsidiary formed through the integration of two former subsidiaries, CITIC Metal and CITIC United Asia, to enhance the business’ investment strength and trading power in the commodities markets. As of May 2016, all six lines of the Sino Iron Project were operational.