Exchange & Stocks
Me-Metals: Behrouz Rahmati stock and investment affairs director of National Iranian Copper Industries Co. (NICICO) said: with a great deal of efforts of our colleagues in the export department of the company, the first 50000 tons export shipment of NICICO left Iran to export destinations, Saturday morning, 7 Farvardin 1398 (27 March 2019).
According to Me-Metals, quoted by MES Press, announcing this news Rahmati said: returns of equity for FEMELI (NICICO) stock have been around 70 percent till 15 Esfand 1397 (06 March 2019), which was acceptable for shareholders with regard to stoppage of NICICO exports since August this year, following the withdrawal of United States from the Joint Comprehensive Plan of Action and the export problems temporarily struck by export-oriented companies.
He added: following the announcement of the export contract for 150000 tons of copper concentrate in the recent weeks, the stock market reacted positively to this news, so that over the past few weeks, with an increase in NICICO stock price from less than 270 tomans to 385 tomans, about 40% has been added to the FEMELI returns. Thus, NICICO stock returns reached the total stock market index at the end of the year.
According to Rahmati, FEMELI has yielded a 94% return on its stockholders, which compared with less than 86% yield of the total stock market index indicates a desirable position for the FEMELI fundamental stock.
The director of stock affairs and investment at NICICO pointed to the positive 1616% return of the company stock over the past 12 years and said: the stock market value of the company amounted to 301,158 billion rials at the end of 1397, which has been the highest market value record of the company since its admission to Tehran Stock Exchange in Bahman 1385 (Jan. - Feb. 2019).
He added: according to the stock market report, NICICO ranked third in terms of market value and ranked sixth in terms of nominal value of capital (number of shares) among the listed companies in Tehran Stock Exchange.
The NICICO export business overcame the sanctions
Emphasizing that sanctions imposed by the global arrogance can never be a major obstacle to the export of NICICO and that with good management and knowledge we can overcome any barrier, Rahmati said: export was possible over the last few months, but due to the particular circumstances of Iran’s international relations, any conclusion of an export contract had to be more cautious and all aspects of the matter were examined more closely in order to ensure that export earnings are guaranteed and potential risks are reduced to minimum; even to around zero.
He added: as I have already emphasized, it is possible to export one hundred percent of the company’s production in any circumstances, even in much more difficult conditions; it’s only necessary to improve and optimize export models in line with the economic and political conditions of the day, with better knowledge and plan.
Rahmati added: to continue the export of NICICO in the current situation, new structures must be established that have already been examined and have a risk of around 0%. Therefore, if these models are used, there will be a possibility of stable exports under any circumstances.
He continued: in order to make sustainable exports ultimately, we need to move a little more agile and persevere and let the negotiators free to negotiate with foreign countries while observing the principles of the market.
The director of stock affairs, saying that the company’s exports stoppage for several months had a temporary effect on stock returns, said: The governmental pricing related to the requirement for large producer companies to calculate the exchange rate in the basic sales formula at 42,000 rials, and then Nimayi exchange rate, which has a dramatic difference with the market rate, is another major reason for the lack of return far beyond the total stock market index, which is a characteristic for a fundamental stock like FEMELI.
Rahmati emphasized: regarding the bitter and unsuccessful experience of the governmental price controls over dollar exchange rate of 42000 rials and possible economic rents of such unilateral decisions, the esteemed government is sincerely requested to justify the discrepancy of about 40% between the free market and Nimayi exchange rates in the last few weeks. So that the benefits of tens of millions Edalat stock shareholders, who are mainly included of the low-income and vulnerable groups of the society, along with "product boom" which is the new year's motto emphasized by the Supreme Leader, be observed.
Referring to the removal of export barriers, he said: currently the biggest concern among stockholders is the issue of governmental price control over currency exchange rate. The fact is that the foundation of products supply in large corporations such as NICICO in commodity exchange is to have prices discovery and transparency of transactions. However, the government’s intervention in the pricing process causes distrust of shareholders and uncertainty about the proper economic returns due to the lack of real prices. It is expected that the esteemed government in full respect to the mechanism of supply and demand in the market, just as it is strictly observed in the stock market and gold and coin markets, pays better attention to this matter in commodity exchange market. Thus, rents will be avoided for a small number against the interest of some 50 million shareholders of Edalat stocks.
NICICO shined in the field of production
NICICO’s director of stock affairs, referring to the sale of the company beyond the last expected budget, mentioned NICICO’s production process in 1397 (2018-2019) and said: after many years, this year we have seen the utilization of a significant portion of the production capacities of NICICO. So that in year 1397 (2018-2019) we succeeded in creating the highest production records in the history of the company over the past 40 years, in all three areas of concentrate production, anodic copper and cathode copper.
He added: in this regard, we produced over one million and one hundred eighty thousand tons of copper concentrate in the field of mineral production, 314 thousand tons of anodic copper in the field of melting and more than 247 thousand tons of cathode copper in the refining field as the final product. And this has been achieved with the efforts of our colleagues at the National Iranian Copper Industries Company.
According to Rahmati, the increase in the cathode production capacity of NICICO occurred while production of 200 thousand tons of cathode had been predicted in the primary budget for the year 1397. And with this increase in production, we will certainly observe more increase in production in 1398 as well.
We are having the best conditions for development
Saying that “we should not overlook the development and multiplier production increase at the moment”, NICICO’s director of stock affairs continued: according to the predictions by the internationally accredited institutions that copper prices are rising, it’s the best time to plan and launch development projects to produce one million tons of copper or copper cathode over the next five to ten years.
He emphasized: In the copper industry, most of the necessary and sufficient conditions for sustainable development, including the high profitability of the copper industry compared to other similar industries, the undeniable potential of the country's copper mines and the possibility of financing a large part of the related investment costs with domestic resources exist.
Rahmati continued: The company's experience over the past decade shows that it’s necessary to pay more attention to sustainable development in the copper industry in the current situation, in order to ensure the growing trend and reliable profitability of the company.
Rahmati said: One of the good news announced at the end of the last year was the addition of the Sungun Copper Mine to the Club of mines with reserves of billions of tons of copper in the world, which can definitely provide a more stable and lasting development and production for NICICO.
The director of stock and investment affairs at NICICO, saying that exploration operations in this mine continues and an increase in its reserve is also possible, said: currently the increase in mineral resources of the Sungun Copper Complex is among the potentials of the company's mineral development field, which has made it possible to provide minerals to complete the production cycle.
Rahmati added: by use of two condensation plants at the Sungun Copper Complex, more than 14.7 million tons of minerals were exploited last year and a total of about 324,000 tons of copper concentrate were produced, which is the highest production record in this complex.
NICICO’s director of stock affairs affirmed: by announcing new exploratory results, discussions on the construction of a phase 3 condensate plant, an increase of seven million tons in the capacity of soil entering to the plant 3 and production of 150 thousand tons of concentrate (a total of 450 thousand tons for all 3 phases) have been set on the agenda. But considering the undeniable potentials of the massive Sungun copper mine and the newly discovered reserves, it seems that increasing the mineral exploitation capacity to about 2 times the current level, as well as increasing the production capacity of copper concentrate from about 300 thousand to about 600 thousand tons a year could be a great option for sustainable development and production in this huge complex. However, details of this project are being reviewed and investigated by a specialized committee at the company and soon the exact results will be notified to the esteemed shareholders.
At the end, the NICICO’s director of stock affairs confirmed: As an expert on non-ferrous metals and the capital market, I give assurance to the stockholders that FEMELI is one of the best and most efficient performing stocks in the capital market, and with the trend of production and development that governs the company's policies, we will see significant profitability of this fundamental stock in the coming years.
Translation by: M. Payehghadr