China scrambling for resource:
mineweb.net
With weak domestic mining production, China needs copper imports
By: Dorothy Kosich
Posted: '09-OCT-06 07:00' GMT © Mineweb 1997-2006
RENO, NV (Mineweb.com) --Chinese copper experts said China’s domestic copper mine supply is still the weakest link in the Chinese copper industry, forcing the nation to continue to be dependent on overseas supply.
In a presentation to Chile’s Copper Commission (Cochilco), Wan Ling of the Beijing Antaike Information Development Company (The China Metals Information Network) noted that “Chinese copper consumption is expected to continue to grow, but the growth rate is likely to slowdown in the next five years.” Nevertheless, he suggested that soaring copper prices will promote the substitution of copper.
Meanwhile, Wan predicted that Chinese smelting and refining capacity is expected to rise dramatically over the next few years. However, he added, the growth rate of refined copper imports is likely to slow compared with copper concentrates. Wan estimated that China imported 2.08 million tones of copper concentrate in January through July, a 6% decrease from 2005. He added that China imported 2.54 tonnes of copper scrap during the same period, for a 7.89% year-on-year decrease.
Antaike has predicted that Chile and China “will have a lot of cooperation opportunities in the copper industry in the future,” noting that the Chinese Government’s copper policies will depend on the future development of the copper industry, he said.
The Chinese Government says that 1,056 copper deposits are located in the nation, hosting a total reserve base of 29.29 million tons. China represents 5.6% of world copper reserves, ranking seventh after Chile, the United States, Poland, Russian, Peru and Indonesia. China produced 410,534 tonnes of copper in concentrate from January through July, an 18.37% year-on-year increase.
Wan said that future potential Chinese copper supply is expected from Tibet, Inner Mongolia, and Chinese provinces. Among the projects expected to be commissioned this year is the De’erni Copper Mine in the Qinghai Province, the Yangla Copper Mine in the Yunnan Province, and the Fujiawa Copper Mine in Jiangxi Province. He noted that the Ministry of Land and Resources plans to increase copper reserves by 20 million tonnes from 2006 to 2010.
China has become the world’s second largest refined copper producer with 50 smelters and 80 refineries operating in the country, according to Wan. He added that there are six refineries with annual copper cathode production over 100,000 tonnes. The top six refineries are Jiangxi Copper, Tongling Nonferrous Metals, Yunnan Copper Industry, Daye Non-Ferrous Company Metals, Jinchuan Group and Ningbo Jintian Copper Group, whose total production accounts for 63% of all Chinese refined copper production.
Wan estimated that China now imports about 1.2 million tonnes of refined copper yearly and will continue to import large quantities for the next five years. However, he added, due to the increase in domestic cathode production, imports of refined copper will decline to around 1 million tones from 2006-2009, and rebound to 1.22 million tones in 2010.
Due to the higher TC/RC in the past two years and strong Chinese demand, Wan noted “there are quite a number of copper smelting and refining brownfields and greenfields under construction or consideration.” He estimated that it would increased planned and ongoing copper smelting capacity to 2.6 million tonnes and refining capacity to around 2.2 million tonnes.
Among the overseas copper projects now under operation or construction which have attracted Chinese investments are the Chambishi Copper Mine in Zambia, and the Saindak Copper Mine in Pakistan. China’s Minmetals and Chile’s Codelco Company have also signed an agreement to develop copper resources in China. Wan Ling said other projects still under consideration for Chinese investment include Vietnam’s Sin Quyen Copper, Russia’s Udokan, Peru’s Keyaweike, Argentina’s Ai’erpanchange, Afghanistan’s Ainake, and Burma’s Palaidang.
He noted that other top Chinese copper producers including Jiangxi, Tongling, Zijin Mining, and Shaanxi Nonferrous “are also ambitious to go outside of the country for resource exploitation.”
However, Wan said Antaike believes that some of the planned projects may not come to fruition because of China’s macro control policy, raw materials, financing problems and other concerns. Therefore, the company estimated that China will actually have a total of 1.3 million tones of smelting capacity and 1.35 million tones of refining capacity in the future. Therefore, Antaike forecasts that China will have copper deficit of 900,000 tonnes this year, 958,000 tonnes in 2007, 861,000 tonnes in 2008, 1.02 million tones in 2009, and 1.16 million tonnes in 2010. Wan said refined copper imports from China account for half the total in China.
Wan noted that the Chinese government’s attitude toward copper “is encouraging exploitation of mines, upgrade of smelting and environmental protection technologies and manufacture of new value-added products. …It welcomes import of copper and copper raw materials while restricting export of copper cathode and copper products as energy-intensive items.” The government encourages exploration to extend the life of existing nonferrous metals mines, and construction of medium- and large-sized mines of copper, aluminum, lead, zinc and nickel. He added that China is also encouraging the development and application of pollution-free smelting technologies to process sulphide ores, and the development of high-efficiency leaching technology and equipment.
The Chinese government is also encouraging the production and technology of high-precision copper plate, strip, foil and tube; the manufacturing of high-performance metals material for railway transportation use; the development and application of nonferrous metals compounds; and the development of examination and controlling technologies to be applied in the production of nonferrous metals, according to Wan.
Of particular importance, Wan noted, is the Circular on Several Opinions in the Copper Smelting Industry published by the State Council. It is the first official copper document announced by the Chinese Government, he added. Among its proclamations is a ban against financial institutions extending credit to copper smelting projects that don’t comply with national industrial policies, that don’t meet applicable thresholds for market entry, or have not handled all relevant formalities.
The Chinese Government has issued qualifications for new companies entering the smelting industry as of July 24 to guide smelting and refining capacity expansion, according to Wan. |
