China’s Source Countries of Copper Concentrate Likely to Change

According to statistics of China customs, between January and August 2011, Chile remained the biggest source of China’s copper concentrate imports. However, the proportion has dropped significantly since Chilean copper mines were hit by successive strikes of workers and severe weather this year. Analysts believe that the situation is probably changing due to the great dependence of China copper enterprises on foreign copper mines and recent accelerated overseas prospecting activities.

China has increased its import of copper concentrate from Mongolia, which ranked No.4 in 2010. On March 31, 2011, Mongolian government approved an agreement for joint exploitation of Oyu Tolgoi Gold-Copper Mine, which was signed by Mongolia, Ivanhoe Mines (from Canada) and Rio Tinto (from Australia) on October 6, 2010. As one of the world’s largest gold-copper mines, Oyu Tolgoi Gold-Copper Mine is located in South Gobi, Mongolia (less than 100km to Mongolia-China boundary).

With a preliminary estimation of potential copper reserves of 31,100,000 tons and estimated lifetime of 50 years, the mine is expected to be put into operation in 2014. Therefore, China is likely to import more copper concentrates from Mongolia.

China also raised the proportion of copper concentrates imported from Peru to some extent,and moreover, CHINALCO Mining Corporation of Peru (MCP) has obtained construction permit on the main project of Toromocho copper mine from Peruvian Energy and Mining Ministry. Therefore, China is expected to further increase import of copper concentrate from Peru after Toromocho copper mine has been officially put into production by the end of 2013.

In addition, China has raised remarkably its copper concentrate import from Canada, which has risen from No.10 in 2010 (2.85%) to the current No.7 (accounting for 4.16%) partially attributed to the acquisition of 96.9% shares of Coriate Resources Company of Canada Copper Company by China Railway Construction Corporation (CRCC) and Tongling Nonferrous Metals Group (TNMG) at a price of RMB 4.274 billion in 2010.

With Chinese copper enterprises speeding up its exploitation of overseas resources, although it’s hard to enhance the position of Chile and Peru as China’s source countries of copper concentrates, the ranking of other source countries of copper concentrates will surely change.