[SMM analysis] under the background of strict environmental protection, the General Administration of Customs discusses the impurity restrictions on imported copper concentrate.

SMM8 6 June news:

At present, the environmental protection policy is becoming more and more strict. In July, the General Administration of Customs discussed with Jiangxi Copper, Tongling Nonferrous and Yunnan Copper on the impurity of imported copper concentrate in order to implement measures to prevent and control pollution. The focus of the discussion is on the arsenic content of imported copper concentrate. It is discussed that the arsenic content of copper concentrate can be reduced from 0.5% to 0.4%. However, the proposal has aroused strong opposition from the three smelters, the proposal is still in the preliminary consultation stage, the General Administration of Customs has not yet set any implementation time.

Stricter Environmental Protection and Survival and Development, the Dilemma faced by smelters

At present, the impurity standard of imported copper concentrate is drawn up according to the standard of leaving Taiwan in April 2006. the metal concentrate entering China must be inspected by (CIQ) of China Inspection and Quarantine Bureau, and the content must not exceed 0.5% arsenic, 6% lead, 0.1% fluorine, 0.05% cadmium and 0.01% Hg. According to the proposed threshold, the maximum import levels are 0.4 per cent arsenic, 4.7 per cent lead, 0.6 per cent fluorine, 0.03 per cent cadmium and 0.002%Hg. In addition, the Customs and Excise Department has added three new elements. The total content of antimony and bismuth should not be higher than 0.2%, and the upper limit of antimony and bismuth content is 1.2 grams per ton. Customs restrictions on the import of copper concentrate impurities deviate from the tightening cycle of the global development of copper mines. China's import of copper concentrate faces new challenges, and more than 70% of China's copper concentrate demand depends on overseas imports.

What are the challenges facing smelters under the prospect of rising output of unclean copper concentrate?

The production of more and more high impurities or "dirty" copper concentrate is the current development trend of copper ore, and these copper concentrate mainly contain high arsenic. At present, high-arsenic copper concentrate accounts for about 8% of the global supply, and the future trend is to increase gradually. At present, China's copper smelting capacity accounts for nearly half of the world's share. If the Customs further strengthens the restrictions on the impurities of imported copper concentrate, it will make it more difficult for manufacturers to promote their materials. Yunnan Copper is particularly sensitive because the Toromocho copper mine owned by Chinalco in Peru is one of the world's high-arsenic copper concentrate.

Is it a measure and challenge for smelters to purchase clean copper concentrate for mixing? This process refers to the process of mixing different copper concentrate to produce the best results, resulting in a reduction in impurity content to meet import restrictions or materials acceptable to the smelter, but this takes into account the consumption of too much clean copper concentrate, which currently exists in Taiwan, Malaysia, China, Spain, Peru, Mexico and other regions. If this standard is implemented, the circulation of clean copper concentrate is bound to be reduced, and the copper concentrate processing fee TC/RC will be further pressured. At present, the copper concentrate processing fee is already at the lowest level in recent years. As of August 2, SMM spot copper concentrate TC has been quoted at US $54.50 / ton. According to SMM, the customs is only at a stage of discussion, and it should be too early to implement it, but from the trend, the severe situation that the copper supplier may face in the future is also worth thinking about.