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China plans to impose an export tax on aluminium, copper and nickel from January 1, the official Xinhua News Agency reported, dealing a fresh blow to the country's aluminium smelters. Xinhua did not elaborate on the level of the tax, which is being imposed despite fierce lobbying from the smelter industry.
Ministry of Commerce officials were not available for comment on the Xinhua report, issued on Saturday. China wants an aluminium export tax to force inefficient smelters to close and speed the consolidation of the industry.
Exports of the three metals have soared this year, on the back of high international prices, although copper and nickel exports are still fairly modest so producers are unlikely to be significantly affected by a new tax.
Liu Qiang, board secretary of Aluminium Corp of China Ltd (Chalco, said supplies of the metal on the domestic market would increase because the new tax would hurt exports.
"The new tax will not affect Chalco much because we export very little," said Liu for Chalco, China's largest producer of aluminium and alumina, the key raw material for the metal.
Chalco does not disclose aluminium export figures.
The smelters already face abolition of an 8 percent tax rebate for aluminium exports, expected by many in the industry to occur on January 1.
Average monthly aluminium exports are expected to double in December as smelters rush to export before the rebate is revoked.
A new export tax is unlikely to have much impact on copper or nickel producers, since China ships relatively little of either metal overseas, an analyst from Minmetals, China's top metals trading firm, told Reuters.
Huang Dongfeng, company secretary of China's largest copper producer, Jiangxi Copper Co Ltd said the tax would have minimal effect on his firm as most of its metal sales were domestic.
Sources for Jiangxi Copper said the company would export about 15,000 tonnes of copper this year for processing trade through which the company imported copper concentrate, its key raw material, and exported the metal duty free.
They said Beijing had already reduced a tax rebate on copper exports to 5 percent from 13 percent, in January this year.
Industry sources said most copper, aluminium and nickel were exported for tolling and processing trade.

Copyright Reuters, 2004

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