Griffin Mining lowers output estimate despite record first-half profit

Griffin Mining Ltd on Thursday reported record first-half operating profit but lowered its expected production rate into early 2027 as heightened regulatory scrutiny in China weighs.

The London-based mining company focused on China reported pretax profit of USD28.5 million for the six months ended June 30, more than double USD14.2 million a year earlier.

Revenue rose 21% to USD77.3 million from USD63.7 million, driven by higher metal prices and lower smelter treatment charges. Average prices received rose 40% for gold to USD4,267 per ounce, more than doubled for silver to USD69.50 per ounce, 30% for zinc to USD2,830 per tonne and 22% for lead to USD3,549 per tonne.

These gains were partly offset by lower production and sales volumes of zinc, which fell 20%, and gold, which fell 31%.

Administration costs, excluding Chinese partners' interests, increased 19% to USD11.5 million from USD9.7 million. Griffin said this primarily reflected higher payroll costs from additional staff hired to comply with regulatory requirements.

In May, mining operations across China came under enhanced regulatory scrutiny, inspection requirements and approval processes following the Liushenyu coal mine gas explosion in Qinyuan County, which resulted in 82 reported fatalities.

Griffin said the resulting approval delays have restricted its Caijiaying mine to 50% of its previous 1.5 million-tonne annual capacity. The company now expects the reduced throughput rate to continue into early 2027 while it awaits approval from the Provincial Environmental & Rescue Bureau to use its previously approved Tailings Safety Facility 4.

The company said it has completed construction of all necessary infrastructure and workings in the Zone II area of the Caijiaying mine. Full budgeted production from Zone II will begin once the necessary safety permit is issued, which Griffin expects in the final quarter of 2026.

Griffin Chair Mladen Ninkov said: "Another outstanding and unmatched operational performance from the Caijiaying Mine. Unshackled, it is extraordinary what the orebody and our people can deliver. The Company now awaits the necessary approvals allowing for the reopening of TSF4 and the safety permit for the zone II area, with which the strength of the Caijiaying mine can be set free to reach its full potential."

Shares in Griffin were up 1.4% at 294.00 pence each on Thursday afternoon in London.

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