Jiangxi Copper Speeds up Exploitation of Domestic Mineral Resources

SHANGHAI, Jan. 28 (SMM) -- Yinshan Mining Company, a subsidiary of Jiangxi Copper Company has started the construction of its copper concentrate project with daily output of 5,000 mt. Total investment of the project is RMB 500 million, and with new annual revenue expected to be RMB 500 million. With the exception of the project, major mines owned by Jiangxi Copper Company are undergoing technical renovation or expanding the capacities. Besides Jiangxi Copper Company, other Chinese copper smelters are stepping up efforts to exploit the mineral resources.

SMM believes domestic copper smelters high interest in the development and exploration of mineral resources are attributed to the following reasons. First, China's self-sufficiency rate of copper concentrate remains low. Although China's copper concentrate output exceeds 1 million mt in 2009, the self-sufficiency rate is only around 37%. Second, 2010 TC/RC of copper concentrate offered by overseas ore suppliers falls, negatively affecting domestic copper smelters' profits. According to contracts signed by domestic copper smelters with overseas ore suppliers, 2010 TC/RC of copper concentrate is at USD 46.5/mt (cents 4.65/lbs), down 38% YoY. Third, the overseas mineral resources having been acquired by domestic copper smelters are only at the initial stage of development, and so supply of copper concentrate will not experience great improvement in the short term.

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