Trafigura to buy 30% of Jinchuan’s Fangcheng copper plant in China

Trafigura has agreed to buy a 30% stake in Jinchuan Group’s 400,000-tpy Fangcheng copper smelter, in a major inward investment for China’s metals industry.

Trafigura has agreed to buy a 30% stake in Jinchuan Group’s 400,000-tpy Fangcheng copper smelter, in a major inward investment for China’s metals industry.

The deal includes a multi-year contract for supply of concentrate and off-take of cathode, both corresponding to Trafigura’s 30% stake. That implies 120,000 tpy of cathode to be marketed by Trafigura from the smelter, which started up in October last year. No financial details of the investment were given.

“We will bring our long-term relationships with producers, reliability and commercial experience to this partnership. We are proud to be the first international trading firm to make a major co-investment in a Chinese domestic smelting business,” Simon Collins, Trafigura’s head of nonferrous and bulk materials, said.

China’s metals industry has traditionally been resistant to foreign investment, particularly in base metals production where state-owned enterprises – such as the Jinchuan Group – are dominant.

Jinchuan has previously said it has plans to expand the Fangcheng smelter to 600,000 tpy. It is also planning to build a 200,000-tpy nickel pig iron plant.

“The organisations have joined hands to bring into play their respective advantages. This will enhance the market competitiveness of Jinchuan in Guangxi and widen the areas of cooperation between the two organisations,” Yang Zhiqiang, Jinchuan Group’s chairman, said.

“We expect that this new partnership will help promote local economic and social development and achieve a win-win cooperation,” the chairman added.

Fangcheng is a port city in southern China’s Guangxi province and plays an important role for commodity transportation and into Guangxi and other southern provinces such as Yunnan and Guangdong.

In 2013, the port took in about 282,100 tonnes of copper concentrate, according to figures on the Guangxi government’s website. Trafigura has operated warehouses in Fangcheng since 2011 after making an investment of $20 million.

“We have worked with the Jinchuan Group for many years and through this agreement we will further strengthen our relationship with them. Jinchuan Group has an excellent reputation in non-ferrous mining and smelting industries, both in and outside of China,” Claude Dauphin, Trafigura’s chairman and ceo, said.

editorial@metalbulletinasia.com

What to read next
Century Aluminum is among those selected to start award negotiations for up to $500 million in Bipartisan Infrastructure Law and Inflation Reduction Act funding to build a new aluminium smelter, the company said on Monday March 25
Participants in the copper concentrates market are struggling to comprehend an “unstoppable” decline in treatment and refinement charges (TC/RCs), with every week bringing spot deals at fresh lows and rumors each “crazier” than the last, sources have told Fastmarkets
The US Department of Energy selected five base metals projects to receive more than $900 million in federal investment from its Industrial Demonstration Program (IDP), leading to a reduction of four million tonnes of carbon dioxide emissions annually, according to a statement by the Department on Monday March 25
Aluminium producer and recycler Constellium announced on Tuesday March 12 that the company is moving to test hydrogen utilization at an industrial scale as a power source in its casthouses
Fastmarkets has corrected its MB-ALU-0002 alumina index, fob Australia and its MB-ALU-0010 alumina inferred index, fob Brazil, which were published incorrectly on Monday March 18.
The publication of Fastmarkets’ US base metals prices were published early during the week of March 11-15 following the daylight saving time change in the US on March 10.