MMG : Financial Statements/ESG Information – Interim Report 2019

Interim report 2019

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HKEX: 1208 | ASX: MMG

2 CHAIRMAN'S REVIEW

4 CHIEF EXECUTIVE OFFICER'S REPORT

1. MANAGEMENT DISCUSSION AND ANALYSIS

1. OTHER INFORMATION

1. INDEPENDENT REVIEW REPORT
2. FINANCIAL STATEMENTS

1. GLOSSARY
2. CORPORATE INFORMATION

Our vision is to build the world's most respected mining company.

We mine to build wealth through the development of our people; the investments we make in improving local capability; and the value we deliver to our shareholders.

A long-term outlook, our pride in mining, our commitment to international standards and our respect for people, land and culture underpin our success.

COVER IMAGE:

Employee at our Kinsevere operation processing plant.

THIS IMAGE:

Dugald River operation.

2 MMG Interim Report 2019

CHAIRMAN'S REVIEW

Dear Shareholders,

I sincerely thank you for your long-term support for MMG. On behalf of the Board of Directors, I would like to present our 2019 Interim Report to

all shareholders.

At MMG, safety is always our first value. We continued to perform well in the first half of the year, and the total recordable injury frequency (TRIF) was

1.67. We have one of the lowest injury rates among all the member companies of the International Council on Mining and Metals (ICMM) for 2018. This achievement comes from the fact that we put safety first in our day-to-day operations and have built a company safety culture by enhancing awareness and implementing innovative safety systems. In the future, we will continue to live our core value of safety and ensure that the safety and health of our employees is the foundation of all our work.

In the first half of 2019, downward pressure on the global economy increased, China's economic growth remained within a reasonable range, global trade tensions continued and the pressure on the price of metals was maintained. Facing complex external environmental challenges, MMG is actively taking initiatives to strengthen its operations and management. In the first half of the year, we produced 215,527 tonnes of copper and 114,080 tonnes of zinc, and achieved revenue of US$1,387 million.

Across all our operations, we successfully responded to challenging events and continued to strengthen operational management. Las Bambas responded well to recover from community road blockades. After the incident was resolved, production resumed quickly, and stable operations have been maintained. In the first half of the year, 185,825 tonnes of copper in copper concentrate were produced. Despite regional flooding, Dugald River's processing throughput exceeded nameplate capacity and produced 74,515 tonnes of zinc in zinc concentrate; Kinsevere proactively responded to the mining and processing challenges caused by

the monsoon season, and its copper cathode production increased by 31% in the second quarter compared with the previous quarter. Rosebery continued to deliver strong mining and processing performance, with annual mining and processing volumes of around one million tonnes. In the reporting period, we continued to focus on cost competitiveness, and to explore and implement business optimisation opportunities, reducing production costs, improving mine operating efficiency and maximising asset value and shareholder returns.

China Minmetals Corporation (CMC), the Company's major shareholder, is one of the largest and most international metals and minerals groups in China. CMC was rated a Class AA enterprise and received the Technology Innovation Contribution

award in the 2016-2018 Annual Performance Appraisal in the latest assessment results released by the State Council of China. It also ranked 112th in the latest global Fortune 500. CMC is accelerating towards becoming the "No 1 in China and leading in the world" metal mining group. MMG

is the flagship platform for the development of CMC's metal and mineral resources. The major shareholder will, as always, strongly support the development and competitiveness of MMG.

Looking forward to the second half of the year, China's economic growth is expected to remain under pressure and global trade tensions may continue. The accelerated development of new energy and electric vehicles will strongly drive the demand for copper, zinc and other metals. On the supply side, copper and zinc supplies are in a tight pattern due to global issues including strikes, natural disasters and environmental policies. In the medium- to long-term, commodity demand in countries along the

"One Belt, One Road" Initiative will continue to grow. China is actively pushing high-quality development, which will drive steady growth in the demand for commodities, including copper and zinc. For this reason, we are optimistic about the fundamentals and future development of the commodities that we manage.

In the future, the Company will continue to grow in-line with its long-term strategy, and to create

MMG Interim Report 2019

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greater value for shareholders and stakeholders. We will continue to focus on safety, strengthen operational management, seek opportunities to reduce cost and improve efficiency, enhance risk prevention and emergency management capabilities. We will do this while actively maintaining the relationship with the community and the government in each host country, and ensuring the smooth operation of all mines. We will further tap into the potential of resources in surrounding areas, closely track business growth opportunities and promote the Company's sustainable development.

I would like to thank all shareholders, communities and business partners for their long-term support and express my sincere thanks to all employees for their valuable contributions.

In the future, the Company will continue to grow in-line with its long-term strategy, and to create greater value for shareholders and stakeholders.

We will continue to focus on safety, strengthen operational management, seek opportunities to reduce cost and improve efficiency, enhance risk prevention and emergency management capabilities.

We will do this while actively maintaining the relationship with the community and the government in each host country, and ensuring the smooth operation of all mines.

Highlights

Analysis and Discussion Management

information Other

GUO Wenqing

CHAIRMAN

Statements Financial