Western Mining Co Ltd (SHA 601168), China's second-largest lead and fourth-largest zinc producer, said first half net profit was 720.15 mln yuan, down 15.74 pct year-on-year due to the sharp decline in zinc prices.

In a statement filed with Shanghai Stock Exchange, the company said operating revenue in the first six months rose 80.49 pct to 6.24 bln yuan while operating costs rose 160 pct to 4.94 bln yuan.

Earnings per share came in at 0.30 yuan, down 31.82 pct.

During the first six months, Western Mining produced 35,000 tons of lead concentrate, 53,000 tons of zinc concentrate, 13,000 tons of copper concentrate, 55,000 tons of electrolytic aluminium, 24,000 tons of zinc ingot metal, 15,000 tons of wet lead and 4,000 tons of manganese chips.

The company said the price of zinc concentrate, which accounted for over 50 pct of the company's total production, declined 50 pct year-on-year.

It said revenue generated by zinc products during the first six months was 675.95 mln yuan, down 20.92 pct year-on-year. Meanwhile operating costs rose 59.29 pct.

The price of lead products rose 16 pct year-on-year, resulting in sales growth of 30.50 pct for this segment, although this did not offset the fall in zinc revenue.

"As the non-ferrous industry is cyclical, there may be price fluctuations or a decline in the second half. We have a cautious attitude to the market," the company said, adding that it expects difficulties in the export market due to a decline in global demand.

The company said it will limit zinc production in the second half to reduce the impact of the weak zinc segment on overall results for the full year.

The company did not provide an earnings forecast for the rest of 2008. – XFN-Asia