SMM Lead Zinc Summit: Environmental tax to raise cost of nonferrous metal production

SHANGHAI, May 24 (SMM) – Environmental taxes are likely to drive up production costs for nonferrous metals, given the high levels of emissions in production, said Huang Fuping, Secretary General of the Guangxi Environmental Industry Association. As the Chinese government steps up environmental protection, environmental taxes will become commonplace, he added.

At the SMM Lead Zinc Summit on Thursday May 24 in Nanning, Guangxi province, Huang referenced tin production as an example. He said that pollutants such as airborne particulate matter, debris and sludge is released during tin mining and concentrating.

With an environmental tax, costs for discharging air pollutants will rise 50-225% and costs of discharging water pollutants will rise 50-150%, according to Huang’s calculation. Environmental taxes, also known as pollution taxes, are excise taxes on environmental pollutants or on goods that generate pollutants from its use. 

Such significant increases in production costs weighed on output of refined tin. Tin smelters in Gejiu, a major tin producing area in Yunnan province, slashed production by 15-20% this year, Huang said. As of March 30, 2018, tin inventories in the Shanghai Futures Exchange stood at 4,606 mt, compared to 10,135 mt on September 22, 2017. The stable growth of tin demand accounted for the depleted inventories. 

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