China, Please Pass the Copper

According to the Legal Redux, copper thievery has become a worldwide phenomenon driven by the resource’s rising value due to high demand from China and hits to supplies caused by labor disputes at BHP Billiton and Codelco copper mines in Chile, which produce 25 percent of the world’s copper.

China imports 80 percent of its copper, some from the United States but mostly from Chile and Peru. The government stockpiles some of that copper. So, when copper prices hit a peak of $8,800 per metric ton on the London Metals Exchange, China responded by dropping refined copper imports by nearly 40 percent, raising domestic production by 21 percent and increasing exports by 182 percent. With the stockpiles getting smaller, China is expected to double its demand for copper to a rate of 8 percent in 2007, which according to Credit Suisse Group will lead to a supply shortfall of 252,000 tons.

China is now negotiating with Codelco to build a coastal smelter capable of producing 100,000 metric tons of copper a year and is revising its national laws to allow foreign companies to explore for new domestic mining possibilities. What is not officially reported, however, is China’s possible use of stolen copper from abroad. For example, police in Naples, Italy, recently seized 20 shipping containers of stolen copper destined for China.

However, China is proud of the fact that nearly one-third of its copper consumption is recycled, as reported by Xinhua News last July in an article about how recycled copper is cheaper and greener than new products. EC

© Information Inc.

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