London 10/04/2016 - Daye Qiansheng (Hong Kong) Investment, a subsidary of Chinese top copper smelters Daye Non-ferrous Metals has taken the first steps into starting a copper concentrates blending business in Malaysia, according to a source familiar with the matter.
The company has rented a warehouse in Port Klang in Malaysia and plans to buy the machinery needed to blend copper concentrates, the source said.
In starting a blending facility, Daye can make its own blends of copper concentrates, before importing into China, rather than buying from traders.
Currently the maximum level of arsenic allowed for copper concentrate imports into China is 0.5 percent.
Accordingly, mining companies and commodities traders blend high-arsenic concentrates with lower-arsenic 'clean' material, to bring the ratio down to an acceptable level and potentially make lucrative margins throughout the process.
The Chinese government previously granted a license to blend material to Xiangguang Copper in Qingdao port for blending, but this has been suspended since July last year.
Several other Chinese smelters such as Jiangxi Copper, and Chinalco have also expressed considerable interest in entering blending market, in order to secure consistant future supply at a time when imports of concentrates into the country are on the rise in line with higher smelting capacity.
Treatment and Refining charges (TC/RCs), the fees paid to smelters to cover the cost of turning concentrate into refined copper, were quoted around $100-110 per tonne/ 10.0-11.0 cents per pound for blended material, according to FastMarkets data in early April.
This was higher than the TC/RCs for clean, standard grades, which ranged at $85-91 / 8.5-9.1 cents for sales to smelters and $77-87/ 7.7-8.7 cents as an overall global number.
Dajiang International Investment Co., Limited, wholly-owned by the Daye Non-ferrous, will be the principal shareholder of Daye Qiansheng with capital contribution of 20 percent.
(Edited by Archie Hunter)