Shanghai-listed Western Mining Co Ltd said it plans to build a 100,000-tonne-per-year copper smelter in the northern western Chinese province of Qinghai.
The cost of the project was estimated at 2.28 billion yuan ($347 million), the company said in a statement on Friday, adding that it would seek a partner to build the smelter with the Western Mining holding a majority stake.
"The project is going to add pressure to the local supply of copper concentrate," said senior copper analyst Yang Changhua at state-backed research firm Antaike.
Western Mining was likely to use copper concentrate production in Qinghai and Inner Mongolia for the new smelter but would still need to buy concentrate from other miners, Yang said.
The mining company operated the Yulong copper mine in Tibet, probably the largest untapped copper deposit in China, and would expand production there, he added.
Yang estimated China, the world's top copper consumer, would add 600,000 tonnes of designed copper smelting capacity to 4.07 million tonnes this year, including 200,000 tonnes of new capacity by Hong Kong- and Shanghai-listed Zijin Mining Group Co Ltd .
Zijin board secretary Zheng Yuqiang said the company aimed to complete construction of the smelter in the second half of the year and start production.
"Copper concentrate purchases one of the main issues we have to deal with before starting production," Zheng told Reuters.
He added that most of the concentrate for the new smelter in the southeastern province of Fujian would be bought in China and overseas markets as it did not produce enough concentrates itself. (Reuters)
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