Shares in Griffin Mining (AIM: GFM) pulled back this morning after the company announced the temporary suspension of zinc concentrate sales from its highly profitable gold-zinc mine in China.
The price of zinc has fallen recently as Chinese exporters have sought to take advantage of a 5% rebate for zinc exporters which expire on 1 January 2008. It is rumoured that the 5% rebate will be replaced with a 5% export tariff to encourage retention of zinc for domestic consumers, which it is believed will reverse the recent weakness in zinc prices. Griffin Mining said it would therefore stockpile zinc concentrate until the New Year to "maximise value". As a result of the temporary halt, the Company said it would not meet market expectations for sales and profitability for the year ending 31 December 2007.
Shares in Griffin Mining fell 18% to 76.5 pence valuing the company at approximately £200 million, well off recent trading between 110-120 pence