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Jiangxi Copper Corporation, the largest integrated copper smelting and refining enterprise in China, announced it would invest 3.4 billion yuan (US$421 million) in an expansion project to almost double capacity, according to a company statement to the Shanghai Stock Exchange yesterday.
An investment of 2.2 billion yuan (US$272 million) will come from the company's own funds with the remaining investment coming from a bank loan.
The project is expected to be complete by the end of 2007. Following the expansion and technology improvements Guixi Smelter Plant, one of Jiangxi Copper's strongest plants and a State-backed key enterprise, will have an annual production capacity of 700,000 tons of commercial copper cathode, an increased capacity of 300,000 tons.
Guixi Smelter Plant is the first copper refinery in the country to adopt advanced technology from abroad with the use of equipment for copper refining techniques such as oxygen enrichment, double convection and double absorption technology.
The company, based in East China's Jiangxi Province, said the expansion project would aim to ease the tight domestic copper demand and to meet its profit targets.
China uses large amounts of copper to build power plants and other infrastructure projects to fuel its economic growth, which was up 9.5 percent in the first half this year.
According to statistics from the International Copper Association (ICA), the leading non-profit international organization promoting the usage of copper worldwide, China is now the largest copper consumer with supply falling short of demand.
ICA predicts that copper consumption in China will grow by 10 percent in 2006, from this year's 3.5 million tons to 3.8 million tons. When ICA entered China in 1995, the domestic copper consumption was 1.25 million tons.
After the demand boosted copper price, Jiangxi Copper's third-quarter sales revenue rose 34.19 percent and the net profit jumped 49.14 percent compared with the same period last year.
The company expects this year's total profit to be more than 50 percent higher than last year's 1.14 billion yuan (US$141 million), according to the company's report to the Shanghai Stock Exchange this quarter.
In light of the copper price rising daily, China's third largest copper producer Yunnan Copper Industry (Group) Co Ltd joined forces with Hong Kong-listed investment company Regent Pacific Group Ltd in November to invest 400 million yuan (US$49.45 million) in a copper mine.
And the State Reserves Bureau has sold about 47,500 tons of copper on the spot market in three auctions last month, in another attempt to cool the booming copper price.
The price of copper in the Shanghai Futures Exchange fluctuated between 34,880 yuan (US$4,317) and 38,950 yuan (US$4,821) per ton yesterday from 16,000 yuan (US$1,978) per ton in October of 2003 in China.
(China Daily December 6, 2005)
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