Chinese Producers Downplay Drought Impact

SHANGHAI, Mar. 22 -- China's two largest producers of refined tin in 2009, Yunnan Tin Company and Yunnan Chengfeng Nonferrous Co, told Dow Jones on Friday that power shortages caused by the current drought in south western China has not yet had a big effect on their production. Hydropower facilities account for around 70% of the electricity generating capacity in Yunnan, the country's largest tin producing province.

"Output remains relatively stable, although our electricity supply has been severely affected by the ongoing drought," said a company official at YTC. "But we may have to cut production if the drought situation continues to deteriorate." YTC, the world's largest tin producer, produced 55,898 tonnes of refined tin last year, mainly from its Gejiu smelter in Yunnan.

Meanwhile an official with Yunnan Chengfeng told Dow Jones that production has been "somewhat" affected as drought has hit their electricity supply. "But we have our own power generators and they can be our last resort if push comes to shove," he said. This contradicted an earlier report by Metal Bulletin that the company was operating at only 50% of capacity. Chengfeng produced 14,947 tonnes of refined tin last year from its smelter, also located in Gejiu. Meanwhile Reuters has reported that lead and aluminium smelters in the area have also had power supply problems which have foreced them to cut production.