CNMC’s DRC copper smelter starts production with 2020 target of 100kt – sources

China Nonferrous Mining Corp’s (CNMC) Lualaba copper smelter has commenced operations in the Democratic Republic of Congo (DRC) with an estimated output of 100,000 tonnes of copper this year, Fastmarkets has learned.

The smelter started production at the start of 2020, a source close to the matter told Fastmarkets.

The 120,000 tonne-per-year capacity smelter is the only major copper smelter in the DRC able to process large volumes of the copper concentrate produced domestically, including mined output from the Deziwa copper-cobalt project and ERG’s Frontier mine.

Deziwa, which came on-stream this month, is operated by Société Minere de Deziwa (Somdez), a joint venture formed by the DRC’s state-run miner Gecamine and CNMC, with the latter currently holding a 51% stake. The Deziwa copper-cobalt project has a designed capacity of 80,000 tpy of copper.

The DRC is the biggest copper producing country in Africa by volume. The country produced 1.15 million tonnes of copper in concentrates in the first 10 months of 2019, according to World Bureau of Metal Statistics. This is significantly more than its neighbor Zambia, the second largest African copper producer, which produced 636,500 tonnes of mined copper over the same period.

To encourage local concentrate smelting, the DRC government introduced in March 2019 a ban on the export of cobalt and copper concentrates. But the government had to make a policy U-turn shortly after due to a lack of local smelting facilities to process concentrate as well as unstable power supply.

The Lualaba copper smelter will produce blister copper under the ‘LCS’ brand, Fastmarkets understands.

Yet Lualaba’s debut will not necessarily boost supply of the copper intermediate product, which was greatly sought after by Chinese buyers in 2019 due to tightness in other copper raw materials such as scrap and concentrates.

This is because Lualaba’s sister operation, Chambishi smelter in Zambia that produces ‘CCS’ brand blister copper, will undergo three months of maintenance in the first half of 2020, leading to a potential output loss of over 50,000 tonnes for the year.

The 250,000 tpy Chambishi smelter is the benchmark settler of refining charges (RC) for the blister copper market. Chambishi and Chinese copper smelter Jiangxi Copper signed a 2020 supply contract at a RC of $128 per tonne cif China, the lowest annual RC benchmark since 2015. 

The lower RC figure reflects expectations of continued blister supply tightness due to the Chambishi maintenance, high demand from China and supply uncertainty from the disputed Konkola (KCM) assets after the Zambian government ordered its liquidation in May 2019.

Fastmarkets’ spot 98-99% blister copper RC cif China is also at a multi-year low of $130-140 per tonne as of the end of December.