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China Jiangxi Copper to Lift Output 4.4 pct in 2011 to 940,000 T

HONG KONG, March 30 (Reuters) - Jiangxi Copper Co Ltd (0358.HK)(600362.SS) expects China's copper consumption to rise by 10-12 percent this year and plans a 60-percent rise in its own production capacity by 2015.
Jiangxi's consumption estimate for China, the world's top user of the metal, was higher than the 8 percent forecast by state-backed research firm Antaike.
&quot;Consumption could rise a bit more than GDP growth (this year). Output could rise given that smelters have been building (new capacity),&quot; Jiangxi Deputy General Manager Wu Yuneng told a news conference following the company's annual results.
Wu put China's copper consumption at 6.8 million tonnes in 2010 and said his company expected record high international copper prices this year.
The benchmark London Metal Exchange copper contract MCU3 rose 31 percent in 2010 and hit a record $10,190 per tonne on Feb. 15 this year. The price stood at $9,535 per tonne at 1106 GMT on Wednesday.
Jiangxi Copper, China's top copper producer, said it planned to raise refined copper output by 4.4 percent to 940,000 tonnes in 2011 from 2010's 900,000 tonnes.
CAPACITY EXPANSION
Vice-Chairman Li Baomin said the company planned to expand production capacity to 1.5 million tonnes by 2015, 60 percent above its annual capacity in 2011. It is both building and acquiring capacity though Li did not identify any acquisition targets.
Li said Jiangxi Copper was looking to build 100,000-200,000 tonnes a year of capacity in coastal provinces such as Guangdong.
Jiangxi Copper and Yantai Penghui may set up a joint venture to build a smelter with 300,000-400,000 tonnes of annual capacity in an industrial park near the port of Yantai in the northeastern province of Shandong and eventually buy a majority stake in Yantai, a source familiar with the matter said last year.
To feed the increased capacity, the company would expand its copper mines in China to 240,000-250,000 tonnes of copper in concentrate a year by 2015, from 200,000 tonnes expected in 2011, Li said.
The company is building a 400,000 tonnes a year of copper rod plant in Guangdong, which will boost its annual copper products capacity to 850,000 tonnes by May next year, Li said.
&quot;We aim to become one of the top three copper firms in the world,&quot; Li said.
By 2015, the parent company of Jiangxi Copper may also inject the parent's lead, zinc and rare earth assets into the listed arm, Li told Reuters.
The parent plans to build 400,000 tonnes a year of lead and zinc capacity in its home province of Jiangxi in two phases.
OVERSEAS MINES
Jiangxi Copper expected its copper mine project in Northern Peru and the Aynak Copper Mine project in Afghanistan to start production between 2014 and 2015, Li said.
Progress at Aynak has slowed after Buddhist remains were uncovered at the mine southwest of Kabul last year.
&nbsp;&quot;The situation there is still controllable,&quot; Li said. He said the findings were in a small area of the site and that their removal and the building of the mine could be conducted at the same time. A feasibility study is due by August.
Huang Dongfeng, assistant to the general manager, said the investment at Aynak was estimated at $1.7 billion for building the capacity of 200,000 tonnes a year of copper in concentrate.
Investment in northern Peru was estimated at $2.5 billion where the capacity is the same, Huang said.
Jiangxi Copper owns 25 percent of the Aynak project, while 75 percent is owned by Metallurgical Corp of China (1618.HK).
Jiangxi owns 40 percent of the Peru project, while 60 percent is owned by China Minmetals Non-Ferrous Metals Co Ltd.
Huang said Jiangxi Copper would take all concentrate production from the two and then split it with the two Chinese partner firms once they had their own copper smelters up and running. 
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SMM Morning Review - 2011/3/31 Nickel Market

update-2-jiangxi-sees-china-2011-copper-demand-up-10-12-pct

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