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In the News

Copper output to hit 16m tons by 2015

CHINA'S total annual copper processing capacity will reach 16 million tons by 2015 with the addition of another 3.15 million tons.

But Wang Biwen, head of the copper division under the China Nonferrous Metals Fabrication Industry Association, said the annual growth rate is seen to be lower than the double-digit gain in the five years through 2010.

"A weak export market, as a result of uncertainties in the global economy, means copper processors have to focus on the domestic market in the coming years,'' Wang told a conference yesterday on the sidelines of the 6th China International Exhibition for Copper Industry, Asia's largest copper industry show.

China's copper product output rose 17.8 percent to 10.28 million tons last year, or over half of the world's total. Consumption was flat at 10.56 million tons last year, the association said.

Web link: http://www.shanghaidaily.com/nsp/Business/2012/05/11/Copper%2Boutput%2Bto%2Bhit%2B16m%2Btons%2Bby

Steelmaker considers moving main factory out of Shanghai

BAOSTEEL Group Corp, parent company of China's biggest listed steelmaker, is considering moving the production capacity of its main factory out of Shanghai, Chairman Xu Lejiang said yesterday.

"There's not a doubt that the steel industry is a huge emitter of carbon dioxide. We are facing tremendous pressure from the government, society and ourselves to meet environmental protection standards," Xu said. "Moving may be our major task in the next few years."

Shougang Corp, a Beijing-based steelmaker, moved its main factory out of the capital after the government introduced measures designed to conserve energy and reduce pollution in China's major cities. Shougang, which was Beijing's major industrial polluter, moved its main factory to Hebei Province in 2008.

"Shougang's today is our tomorrow," Xu said. "We will take proactive actions in crossing the threshold. In the next 10 years, production in Shanghai will fall by 3 million tons. The forgone capacity will be supplemented by other factories."

According to industry insiders, Baosteel received government approval at the end of April for a 10 million ton plant in Zhanjiang, a port city in Guangdong Province. Xu confirmed the news, but said the official papers had yet to be received, web portal NetEase reported yesterday.

Baosteel's plan to expand in the southern region was phased in more than three years ago, but the steelmaker failed to get approval from the National Development and Reform Commission at a time when the global financial crisis slashed demand and there were strict controls on overcapacity.

"Steelmakers' profitability continues to deteriorate," the Workers' Daily reported last week citing Li Xinchuang, an official of the China Steel Industry Association. "According to the forecast made by the Ministry of Industry and Information Technology, the domestic demand for steel will reach 710 million tons by 2015, while the production stays around 810 million tons. The gap indicates oversupply."

Chinese steelmakers posted combined losses of more than a billion yuan (US$158.2 million) in the first quarter, the first industry-wide losses in 12 years, due to slowed demand on weakening exports and government curbs on property, Li said.

"The steelmakers were the worst performers among the industrial producers. Their profits fell the most compared to others in the first three months," he added.

"Overcapacity will be eliminated through mergers in the future."

NetEase said Wuhan Iron and Steel (Group) Corp also received approval for a 10 million ton factory in Fangchenggang, a port city in Guangxi Zhuang Autonomous Region that borders Guangdong.

Web link: http://www.shanghaidaily.com/nsp/Business/2012/05/09/Steelmaker%2Bconsiders%2Bmoving%2Bmain%2Bfactory

Lehman, Lee & Xu is a top-tier Chinese law firm specializing in corporate, commercial, intellectual property, and labor and employment matters. For further information on any issue discussed in this edition of China Mining Lawyers Alert or for all other enquiries, please e-mail us at mail@lehmanlaw.com or visit our website at www.lehmanlaw.com and Mongolia www.lehmanlaw.mn.

Lehman, Lee & Xu Mongolia is one of the first and only international law firms with a full time presence in Mongolia.  Our Ulaanbaatar office is staffed with resident foreign legal consultants having significant experience in Mongolia and qualified Mongolian attorneys. The firm’s foreign legal consultants and local attorneys are fully acquainted and experienced with Mongolia’s laws and legal system, business climate and political affairs. For any Mongolian legal matters please refer to our Mongolian website www.lehmanlaw.mn.

© Lehman, Lee & Xu 2012.
This document has been created for educational purposes for clients, potential clients and referrers of services to Lehman, Lee & Xu, and to alert readers to the services provided by Lehman, Lee & Xu. It is not intended to serve as definitive professional or legal advice, and should not be relied upon as such. Lehman, Lee & Xu does not endorse any personal opinions which may be contained herein.
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