China's Daye to double refined copper output by 2015

By Polly Yam WUHAN, China, Nov 7 - Daye Nonferrous Metals Co Ltd, the fifth-biggest copper smelter in China, plans to double refined copper production to 500,000 tonnes by 2015 and is eyeing an initial public listing, the smelter's president said. "We are trying to speed up the pace for the listing," Zhang Lin told a copper conference in Wuhan city in Hubei province on Saturday. Zhang did not provide a timeframe for the IPO. Daye has annual 400,000 tonnes of smelting capacity and 250,000 tonnes of refining capacity in China. Refined copper production is expected to stay at the 260,000 tonnes level this year and next year, surpassing the refining capacity. It also has 160,000 tonnes of annual capacity to turn refined copper into semi-finished copper products and plans to boost the output to 400,000 tonnes by 2015. In addition, the smelter holds a stake in products producer Chinalco Central China Copper Co, which is majority owned by Chinalco, the parent of the country's top aluminium producer Aluminum Corp of China Ltd <2600.HK> <601600.SS>. Chinalco Central has 130,000 tonnes of annual capacity. Daye, demanding more concentrates and scrap for its expansion of copper production, hopes the Chinese government will help domestic copper smelters cut the cost of production and source more concentrates, the semi-processed ores for copper production. "Following rising smelting capacity in China, the deficit of copper resources is getting obvious. Competition for the resources are fierce," Zhang said, referring to concentrates. He urged Beijing to strengthen exploration of copper mines and set policy to give local proven copper reserves to state-owned companies, such as Daye, in their locations. Beijing is being urged to set up a fund to help Chinese firms develop overseas resources. The government should reduce the value-added tax for imports of copper concentrates and cut the tax on exports of refined copper as that would give flexibility to Chinese smelters in international trade, Zhang said. Currently, imports of copper ores and concentrates do not carry import taxes and are subject to 13 percent value-added tax. Exports of refined copper is subject to a 10 percent export tax and does not carry tax rebate for the VAT.