China plans to raise its self-sufficiency in nonferrous metals by stepping up domestic exploration and overseas acquisitions during the 12th Five-Year Plan (2011-2015), said an industry official on Thursday.
Jiang Mingxing, vice-chairman and secretary-general of the China Nonferrous Metals Industry Association (CNMIA), said companies in the sector want greater control over upstream resources and higher profits.
Mining companies' profit margins stood at 14 percent from January to May. The figure for mid-sized and large nonferrous metal companies was 4.5 percent in the same period, with smelting and processing firms' profit margins even lower, according to a statement released on the conference.
"China aims to build up an internationally leading nonferrous industry. Significantly enhancing the self-sufficient supply of mining resources is essential," Jiang said.
Kang Yi, former chairman of the CNMIA, previously told China Daily that the nation's self-sufficiency rates for copper would reach 55 percent and aluminum would be 75 percent, during the plan period.
"Three to five Chinese nonferrous metal companies will be ranked among Fortune 500 companies, while more than 10 companies will have annual revenues exceeding 100 billion yuan ($15.3 billion)," he said.
Chinese nonferrous metal companies have been actively pursuing domestic and overseas resources to secure steady upstream supplies and become mining conglomerates with complete industrial chains.
A recent example is Aluminum Corp of China Ltd, which received a permit to build the Toromocho copper mine in Peru. It is on track to start mining in 2013, with annual capacity of 250,000 tons of fine copper, the company said in a statement last Friday.
The country's largest aluminum producer also won government approval last July to expand into other sectors including copper, coal and rare earths, and it aims to become one of the top 10 global mining companies.
China Minmetals Corp President Zhou Zhongshu told China Daily earlier that the company would speed up its overseas mining projects to bolster its raw material supplies, with overseas subsidiary Minerals and Metals Group serving as an international investment platform.
China Minmetals paid $1.39 billion for Australian zinc producer OZ Minerals Ltd in June 2009 to expand its presence overseas.
Jiang also said the nonferrous industry will make more investments in western China. From January to July, the nonferrous industry invested 194 billion yuan, up 28.2 percent from a year earlier, while fixed investment in the western region reached 81.7 billion yuan, up 35.7 percent.
The industry will strictly control new smelting capacity in regions that don't have resources and encourage electrolytic aluminum capacity transfers to western China, the Ministry of Industry and Information Technology said earlier in a report.
China will also control the capacity expansion of the nonferrous metals industry, with the annual growth rate of the top 10 metals reaching less than 8 percent during the next five years, according to the association.
Source:China Daily