Chinese-owned Sino-Metals Leach Zambia Ltd has started producing copper from tailings from one of the country's oldest dumps and plans annual output of 8,000 tonnes of copper cathode, a company official said on Monday.
Sino-Metals Company Secretary Sun Chuanqi said trial copper production at the new $15 million plant in Chambishi, 400 km (240 miles) north of the capital Lusaka, began in July. Sun said copper oxide ore and tailings were from Chambishi Mine, which is owned by NFC Africa Mining Plc, a subsidiary of China Non-Ferrous Metals (Group) Co Ltd.
NFC Africa bought the tailings from the state Consolidated Copper Mines (ZCCM) Investment Holdings, which ran the country's copper mines until they were privatised in 2000. "We have started producing copper from tailings left by ZCCM and we are also getting copper oxide ore from NFC Africa. Our plans are to produce 8,000 tonnes of copper cathode per year," Sun told Reuters, saying the tailings would last up to 10 years.
"If we want to increase production, we will have to buy new equipment and the project is looking very good and promising at the moment," he said, adding higher copper prices would also encourage production.
Sun said full production would be reached in 2007 and that 140 tonnes of copper cathode had already been produced by the company, which employs 220 Zambians and 30 Chinese expatriates. The Sino-Metals project comes amid growing concern over Chinese investments in Zambia, prompted by media reports that Beijing fears opposition candidate Michael Sata - who has been critical of Chinese business methods in the country - may win September 28 presidential elections.
China has denied that its investments in Zambia are on hold. Data from the Chinese embassy indicates that Chinese firms have invested more than $300 million in Zambia, including in its Chambishi copper mine, controlled by China Non-ferrous Metal Mining (Group) Co Ltd Sino-Metals Leach Zambia is a joint venture of China Non-ferrous Metals Mining (Group) Co Ltd, Sino-Africa Mining Investments Ltd, NFC Africa Mining Plc, and China Hainan Construction Company Ltd.
The new fee is on exports of secondary aluminium alloy ingots, produced from scrap metal, for processing trade from which Chinese alloy plants import the material duty free as long as they export the finished product.
"It is better not to take new orders," a manager for a large secondary aluminium alloy maker in Shanghai said. She added that industry bodies and alloy producers were lobbying Beijing to cancel the fee. Exporters, who do not receive a rebate for the local 17 percent value-added tax on aluminium alloy, previously were required to pay the VAT for the difference between the price of the imported material and the export price.
But the State Administration of Taxation from July 1 has required those exporters to pay fees equal to 6 percent of the export price to replace that VAT, boosting such payments, industry officials said. The exporters had not been informed about the new fee until mid-August and were required to repay fees for exports made in July and August.
Industry officials said the new policy was not applied to exports under tolling trade from which overseas buyers provided the imported material and took the alloy, while Chinese producers received charges. "We are trying to turn processing contracts into tolling contracts to avoid extra payments," an official for an alloy plant in Zhejiang, said.
China's exports of aluminium alloy surged 216 percent to 233,783 tonnes in the first seven months of this year. The country, a major importer of scrap aluminium, bought 925,346 tonnes of the material in the first seven months, down 0.5 percent from a year earlier.