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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Claude Cormier who wrote (8805)	2/27/2004 9:54:53 AM
From: TheSlowLane	Respond to of 110194

Some of the customers of the copper from Grasberg are pretty unhappy about the situation there. As far as I know, Stephen O was one of the first to start saying that the problems at Grasberg were much worse than initial indications seemed. That came out in the papers at least 1-2 months after he started raising that concern. This is from an article posted to the Copper - Analysis thread: "Early this year, Freeport decided to cut its sales target for the Grasberg Mine down by 40% to 1 bln lb for the year, from an original figure of 1.4 bln lb. "We used to order copper concentrates from the Grasberg Mine last year," said Liu Shufeng, a commercial official with Anhui-based Tongling Copper, claimed to be the largest in China, "but we stopped purchasing Grasberg's copper concentrates this year due to the repeated accidents there." Liu pointed out that Tongling Copper also decided to stop using Grasberg because its copper concentrates had a higher content of gold and silver, making further separation more difficult and costly. "However, the postponed delivery of copper concentrates to Yunnan Copper still casts a pale upon us because we have to pay higher raw material prices and struggle harder to source alternative suppliers," added Liu. Tongling Copper has instead placed most of its orders with Chile and Australia. Daye Nonferrous Metals Co., China's fourth largest copper smelter, held the same concerns as Tongling Copper, since the Grasberg-affected copper smelters would be fighting for the same suppliers and share their existing contracts. "This has an indirect effect on us, mainly on our costs," said Su Bing, a trade official at Daye, "although the company's production has basically been met." "Daye has never been held a contact with either Freeport or Grasberg," Su continued, "It has sourced its material from other channels, in Australia, Chile and Peru." When asked when the force majeure from Grasberg would be renounced, Yunnan Copper refused to disclose any details, saying that this information was "commercially sensitive". "