Lucky Cement to enter the gold and copper mining business

Lucky Cement Ltd is actively pursuing diversification through National Resource Ltd (NRL), which will pursue Pakistan’s copper and gold mining business. Top officials at Lucky Cement recently held a corporate briefing session to discuss the operational and financial performance for FY23-24. They stated that a pre-feasibility study is being conducted, and at least 2-3 years will be needed to understand the mining potential.

The PKR8.5bn (US$30.5m), 28.8MW wind power project will come online in 1QFY24-25. Upon completion, approximately 50 per cent of its energy requirements will be met through renewable sources.

Dispatches in FY23-24
Lucky Cement’s domestic sales reached 6.4Mt, capturing a 16.7 per cent market share and a three per cent YoY increase, contrasting with the industry’s 4.5 per cent YoY decline in sales. The outperformance was driven by the company’s brownfield expansion in the north, which boosted Lucky Cement’s market share.

Local retention prices are PKR15,000/t. Management is adopting a wait-and-see approach regarding limestone and clay taxation in Punjab and attributed high transportation costs (PKR7000-8000/t) to the price gap between the north and south regions. It expects this difference to normalise over time.

Export volumes surged 88 per cent YoY in FY23-24, outperforming the industry’s growth of 54 per cent. Presently, export prices are US$30/t for clinker and US$40/t for cement. However, due to the significant contribution of clinker to Lucky Cement’s overall exports, clinker has minimal impact on the bottom line, primarily aiding fixed cost absorption.