Copper Chairman dismisses fears of raw material shortages
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Li Yihuang, chairman of the Jiangxi Copper Co., China's biggest copper producer, dismissed concerns about a lack of raw materials at a Jiangxi Delegation group discussion on the first day of the 3rd Session of the 11th National People's Congress in Beijing.
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| Delegate Li Yihuang answers questions at a panel discussion of the government work report on March 5, 2010. [Li Shen/China.org.cn] |
![Delegate Li Yihuang answers questions at a panel discussion of the government work report on March 5, 2010. [Li Shen/China.org.cn]](http://images.china.cn/attachement/jpg/site1007/20100306/000cf1a48b7f0cfc2ff21e.jpg "Delegate Li Yihuang answers questions at a panel discussion of the government work report on March 5, 2010. [Li Shen/China.org.cn]")
When asked whether there is any copper ore for Jiangxi Copper to exploit, at the group discussion, Li said that Jiangxi Copper Co. has 11 million tons of copper ore, about 30 percent of the total exploitable amount of China, and has the highest ratio of self-sufficiency among domestic copper enterprises. Its seven copper mines can maintain the current exploitation output for another 28 years.
In addition, it controls two copper mines in Peru and Afghanistan making its raw material reservation almost 16 million tons.
The current domestic output of copper concentrate ore is 900,000 tons, while the cathode copper production capacity of Jiangxi Copper Co. is 4 million tons. And with the rapid development and investment in housing, power grid and industrial equipment manufacturing, China needs large amounts of imported copper ore. By the end of 2008, China consumed 5.3 million tons of cathode copper. And according to a Reuter's report, China's apparent consumption of copper was about 7.36 million tons in 2009. China has become the biggest copper consumer in the world.
Li said that China's copper consumption will grow this year. But the rate of increase will slow down. And the refined copper output of Jiangxi Copper Co. will reach 900,000 tons this year.
At present, Li noted that Chinese copper enterprises could not equally negotiate with global leading producers on the low processing fee. According to Non-ferrous Metals Industrial Restructuring and Revitalization of Planning issued by the State Council last May, the production output of the copper corporations should account for 90 percent of the total output. This would control any newly established production capacities, increase the concentration ratio of the industry and encourage the reshuffle of the enterprises.
Chinese copper corporations have to strive to find resources home and abroad to balance the strong demand and limited inventory. The National Development and Reform Commission issued an announcement last August stating plans to subsidy loans on importing raw materials including copper. This would encourage domestic enterprises to increase import amounts and reduce losses caused by the low processing fee.
