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Zambia copper concentrate duty to disrupt global copper supplies - Report-18th China(Guangzhou)Int¡¯l Non-Ferrous Metal£¨Copper£©Exhibition
11/30/2016 Copper exhibition -non-ferrous metals expo |
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Reuters reported that a plan by Zambia to put a duty on copper concentrates imports could put a kink in the global supply chain for the metal, industry sources said, by forcing neighbouring Democratic Republic of Congo to send surplus mine output elsewhere.
The 7.5% duty announced earlier this month and due to come into force at the start of 2017, is likely to disrupt supply of refined metal in the early part of the year, just as the global market moves away from surplus, helping to support prices.
Zambia, Africa''s second largest copper producer, will produce about 425,000 tonnes of copper metal this year, according to consultancy GFMS, accounting for about 2% of global output.
The country''s smelters, including those run by privately held Eurasian Resources Group and India''s Vedanta Resources, currently source some 500,000 tonnes of concentrate from the DRC, according to consultants Wood Mackenzie.
This is made up of 400,000 tonnes from ERG''s Frontier mine and around 100,000 tonnes from La Sino-Congolaise Des Mines SA (Sicomines), a joint venture between DRC''s Gecamines, China Railway Construction Corp and Sinohydro Corp.
An industry source working in Zambia said that "It will not be viable for smelters to buy concentrates from the DRC. This change will upset the supply chain for the first six months of 2017."
Miners in the DRC would be forced to look for other ways to process their concentrate, such as sending it some 3,000 km (1,860 miles) overland to Durban in South Africa for shipping to China, a two-month trip, three industry sources said.
This would take the supplies out of circulation for several months and delay production of up to 150,000 tonnes of copper metal.
Smelters in Zambia, where capacity far outstrips current mine supply, are already struggling with low feed stocks after miners including Glencore closed copper shafts as prices fell to six-year lows.
-18th China(Guangzhou)Int¡¯l
Non-Ferrous
Metal£¨Copper£©Exhibition
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