SHANGHAI, Dec. 6 (SMM) -- SMM sources report that Hebei Hua Ao Mining Industry Company, which was forced to shut down production in late September due to power restrictions, will resume operations in the near future.

In late September, the Hebei provincial government expanded electricity restrictions to nonferrous metals mining companies, following power restrictions for  steel mills and cement producers in order to meet energy conservation and emission reduction goals. According to SMM sources, Hebei Hua Ao Mining, a major zinc mining company in Hebei province, was closed in late September when the local government cut electricity supplies to the company. The closure had a significant impact on zinc concentrate production in Hebei province, with zinc concentrate output falling to 3,007 mt during October, down 41.2% from September.

Hebei Hua Ao Mining has an annual capacity of approximately 30 kt for zinc and lead concentrates, and plans to increase capacity to 50 kt/yr after new facilities are put into operation in early 2011.

SMM sources report power restrictions to smelters in Henan province have now also been eased after the province reported it had met its energy efficiency goals. Henan Yuguang Zinc Industry Company, which had previously cut production due to power restrictions, has been operating at full capacity since last week.

Henan province was listed in September by China's National Development and Reform Commission as a first-level area for energy savings and emission reductions. Power restriction policies taken by the Henan provincial government in October affected production at local zinc smelters, with Henan Yuguang Zinc Industry Company cutting production as a result, but this  company has now resumed full production.

Zinc output at Henan Yuguang Zinc accounts for a large proportion of the province's total zinc output, so production cuts at the company lowered total monthly zinc output in Henan province. Zinc output in Henan province was 22,248 mt in September, but only 18,791 mt in October, down 15.5%.

Although Henan Yuguang Zinc has resumed full operations, the company was unwilling to sell goods due to falling zinc prices, but some traders say the company is giving priority to long-term contracts. An official from Henan Yuguang Zinc says the company is waiting for higher zinc prices in order to improve profits.  

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