“The smelting capacity in China has increased too quickly”

The vice president of China Nonferrous Metals Industry Association (CNIA), Shang Fushan, states that the rapid development of the copper processing industry in the Asian country has resulted in a worldwide shortage of concentrate, along with lower processing rates. In addition, he expresses his concern about blending practices and high arsenic content in copper mines.

China Nonferrous Metals Industry Association (CNIA) was established after the reform of the national industrial management system of the Asian country in 2001, in order to support the different areas, industries and companies of the national government, serving as a bridge between the state and the industry. It currently has 1,850 corporate members, and its main achievements include research development, scientific and technology advances, statistics, and the design of regulations that contribute to the development of the Chinese mining sector, as well as expanding metal applications such as copper and aluminum. The relationship of this entity with Chile is very close, due to its role as the co-organizer together with CESCO, of Asia Copper Week, among the important global events in the copper mining industry.

Just over two months before a new version of this meeting in Shanghai, the president of CNIA, Shang Fushan refers, in an interview with CESCO, to the importance of this event, the current situation of the industry in China, the challenges posed by the increase in arsenic content in world-class mines and the imbalance between the smelting and the copper concentrate capacities globally.

The smelting capacity of the Chinese copper industry has increased significantly whereas the global supply of concentrates is often weak. How do you address this issue?

The Chinese copper smelting and refining industry has developed rapidly in recent years. Specifically, copper smelting as such has been reformulated, and there is innovation towards it in an independent manner. Broadly speaking, as well as other countries, it is globally at an advanced stage, which has laid the foundations for further improving copper smelting capacity. However, we also believe that this capacity has increased too quickly, resulting in a shortage of copper concentrates worldwide. Processing rates have dropped dramatically and the economic benefits of smelting companies have been downward and even disappeared. We have also consistently called on companies to acknowledge the current situation, not to generate copper smelting capacity too quickly – especially if they do not have a reliable supply of copper concentrate – and not to build new copper smelting projects. Nevertheless, the decision power is in the hands of the companies and it is they who absorb the risk.

Asia Copper Week has become one of the world-class events in the copper industry. What led the Association to develop this important strategic plan by deciding to collaborate with CESCO? What do you think will happen?

China is a major producer of copper in the world and one of the main countries in terms of consumption and import. Strengthening and promoting international exchanges in the copper industry is one of the primary duties for China Nonferrous Metals Industry Association. Taking advantage of the respective benefits of the Association and CESCO, holding Asia Copper Week in China, and establishing a communication platform for the international copper industry are highly useful opportunities for the development of the world copper industry. The CNIA should participate and actively promote the development of this activity. We hope that this event will be given increased attention by the industry and related parties so its role and impact are further disclosed. In our opinion, we believe that the scale of this activity should not be over-extended and that more emphasis should be placed on quality and efficiency in the future.

Due to the increase in arsenic content in world-class mines, the Chinese government is said to have approved several blending projects, including Chinalco and China Gold. What is the opinion of the CNIA about these projects? What do you think of its smelting capacity to obtain a sustainable supply of raw materials after blending in national territory?

We have not investigated the constant increase of arsenic in worldwide copper mines. However, it is true that some developed copper mines contain higher levels of arsenic. Arsenic is a harmful substance to copper smelting that not only increases the technical difficulties of copper production, but also the cost of production and the pressure for greater environmental protection. Therefore, the Chinese government has proposed an upper limit for arsenic, the content of which must be less than 0.5% in imported copper concentrates. Even so, some copper smelting technologies need more mineralization to reduce the content to an acceptable level. Previously, some companies reported the Association that foreign suppliers of copper concentrates purchased concentrates with high arsenic content at low prices and sold them to Chinese smelters at the prices of clean minerals after mixing them with cleaner products from other mines below the Chinese standards. Due to the double loss for the economy and the environment (instead of the problem mentioned to ensure that the smelter can obtain a sustainable supply of raw materials), I hope that the CNIA notifies the relevant state agencies on its potential participation in blending mining projects where these conditions are in place.

My understanding is that only Chinalco was approved for the blending mining project in Ningde, Fujian, China. This is based on the fact that Chinalco’s copper concentrate in Peru has a high arsenic content, and that there are political barriers if sent back to China. However, we understand that this is not included in the general blending mining project that was mentioned. It does not have the commercial license to purchase other concentrates or blends with high arsenic content in other countries, and it only purchases copper concentrates from its mine in Peru. Personally, the high arsenic copper concentrate is a raw material for copper smelting, but its value must be considerably reduced compared to other clean mines. Foreign manufacturers purchase these types of minerals and clean them at low prices. Even if they meet the Chinese import standards, they must be declared in advance. The price must also be lower than the clean mineral, and the buyer must be given a price subsidy to finance at least the costs for arsenic processing.