|By ACN Newswire||
|January 27, 2013 09:52 PM EST||
The progress of overseas resources projects, as the development highlights of MCC, was hindered. For example, the development progress of its Aynak Copper Mine Project in Afghanistan slowed down due to the excavation of relics and other problems; and the Cape Lambert Iron Ore Project in Australia had always stayed in the earlier stage of feasibility study and preparation. The interim report disclosed that the provision for impairment of mining rights of this project amounted to RMB1.8 billion, resulting in loss of MCC in 2012 interim report. Then, the third quarterly report stated that the project company was proceeding with the introduction of strategic investors.
"Since the accumulated costs of Western Australia SINO Iron Ore Project, as one of the representative projects for MCC's overseas engineering development, have exceeded the current contract value agreed by the customer, there is a significant uncertainty surrounding this matter in respect of whether losses would eventually arise on the contract, which depends on the results of the special purpose audits to be undertaken on the contract costs incurred and the relevant negotiations", the opinions expressed in the 2011 annual auditors' report of MCC were unqualified with a paragraph of emphasis of matter.
What affected MCC more were the continued losses and insolvency of Huludao Nonferrous. Huludao Zinc Industry, a listed company controlled by Huludao Nonferrous, had recorded loss for two consecutive years due to overdue loans and ceaseless litigations and disputes, and had little hope of recovery in 2012. If no unexpected events occur, Huludao Zinc Industry will be suspended from trading this year and confronted with the risk of delisting. MCC stated in its announcement that, on 31 December 2012, it transferred its 51.06% equity interests in Huludao Nonferrous to MCC Group. Is the transfer a prelude for MCC to completely get rid of the problems with Huludao Nonferrous? However, the announcement also emphasized that, on 31 December, MCC still retained a claim of RMB7.77 billion on the Huludao Nonferrous Group, and the value of such claim may decrease significantly.
For the aforementioned, 2012 is really the most difficult period for MCC. Recently, the writer noted on the website of MCC that, from 12 to 13 January 2013, MCC held the 2013 working conference in Beijing at which MCC clarified the work focus for 2013 to be highlighting reform and development, proposed the struggle objective of "focusing on the principal business of MCC and constructing a 'better MCC'", and stressed the focusing on principal business, scientific development, strengthening management and bold reform and innovation. It seems that after the difficult period of 2012, the most urgent task for MCC has become the seeking for changes against predicament.
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