China will also encourage copper smelters to sign long-term purchase agreements with global miners
CHINA has tightened requirements for building new copper smelters, in its latest attempt to curb relentless capacity expansion in the world’s top producer of the refined metal.
Companies building new copper smelters should control enough mine supply – via outright ownership or equity stakes – to feed the plants, according to a 2025 to 2027 development plan for the country’s copper industry jointly issued by 11 ministries. This condition would likely be met by only a small number of major Chinese companies.
The sector has seen cut-throat competition for raw material as mines across the world faced production disruptions, falling grades, and higher exploration costs. Spot processing fees have plunged below zero, causing industry-wide losses and threatening output cuts at Chinese plants.
The China Nonferrous Metals Industry Association last October called for curbs on new smelters as a “top priority” and urged the copper sector to learn from government intervention in the steel and aluminium industries.
About 85 per cent of concentrate used in Chinese plants is imported, according to data from the US Geological Survey. The country produced 12 million tonnes of refined copper in 2023, while mined output was at 1.7 million tonnes. Total reserves of the red metal stood at 41 million tonnes as at 2023, or 4.1 per cent of the global total, according to USGS.
The country aims to boost domestic copper mine resources by 5 to 10 per cent in three years to secure raw material supply, according to the government plan.
China will also encourage copper smelters to sign long-term purchase agreements with global miners, boost imports of copper blister and anode, and encourage scrap imports, according to the plan. BLOOMBERG
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