Bloomberg reported that Jiangxi Copper Company is hopeful of reaching this year’s output target after availability of scrap improved.
Mr Gan Chengjiu CFO of Jiangxi Copper said that the company is aiming to produce 800,000 tonnes of refined copper as projected. Around 45% of Jiangxi’s 900,000 tonne annual capacity uses scrap with the rest sourced from concentrate.
Copper on the London Metal Exchange has doubled this year as China’s CNY 4 trillion stimulus plan and record USD 1.1 trillion of lending in the H1 spurred purchases of the metal used in construction and autos.
Mr Gan said after a recent trip to Taizhou, Zhejiang province said that “With prices having gone up, scrap traders are releasing stockpiles they’ve been hoarding. Furthermore, they’re shipping in more from aboard.”
Mr Li Yihuang chairman of Jiangxi Copper said that a lack of scrap threatened Jiangxi’s plan to increase production by 14% to 800,000 tonnes 2009.
Mr Gan said that Jiangxi Copper’s capacity expansion will be slow due to a raw material shortage, possibly by only 100,000 tonnes in the next 2 years to 3 years. He said that to obtain adequate raw material supplies will remain an onerous task for us in the coming years. Jiangxi will increase self mined copper concentrate to 200,000 tonnes in metal content in a couple of years from 160,000 tonnes.
According to China’s Nonferrous Metal Industry Association, scrap accounts for about a third of China’s refined copper production. The country relies on imports for most of its scrap needs as domestic availability is small.
Mr Gan said that Afghanistan’s largest copper mine Aynak in which Jiangxi Copper owns a stake will start producing in 2012 with the Phase I of output planned at 200,000 tonnes. He added that half of it would be sold to the company as agreed.
