Nonferrous Industry’s Twelfth Five Year Plan Has Taken Shape, The Industry Will Develop 10 10,000,000 yuan Groups

“By 2015, 3 - 5 nonferrous metal enterprises will join the ranks of world top 500 corporations; the number of enterprises with sales above 100 billion yuan will reach 10 or more.”Regarding the “Twelfth Five Year Plan” of the nonferrous metal industry which has not yet been formally unveiled, Kang Yi, former Chairman of the Nonferrous Metals Society of China, disclosed authentic info to “Economic Information Daily”.

He emphasized that, during the “Twelfth Five Year” period, through industry policy guidance, the industry will further optimize China’s nonferrous metal industry distribution, on the basis of effectively controlling over-fast growth of smelting production capacity, improve industry concentration degree and pricing right. At the general election of the Third Representative Conference of China Nonferrous Metals Industry Association (Nonferrous Association) which convened on the same day, Chen Quanxun was elected Chairman of Nonferrous Association, Kang Yi, who has served as Chairman of the Association for ten years, was engaged as Honorary Chairman.

“(The Plan) has basically taken shape, and should be released soon.” All attending government representatives and representatives of the Association told the reporter this news.

The reporter has learned that China is the largest nonferrous metal manufacturer and consumption nation in the world, but there are prominent deep-rooted contradictions in the nonferrous metal industry, some products have excessive production capacity, the industry dis-tribution urgently needs adjustment, with low industry intensive degree, low resource guarantee, weak ability in independent innovation,and poor level in regeneration utilization, the task to phase out backward production capacity is arduous.

In view of the status quo of excessive production capacity, and irrational industry structure in the nonferrous metal industry, the Adjustment and Rejuvenation Plan for Nonferrous Metal Industry” previously published by the Chinese government clearly indicted its intention to encourage copper, aluminum, lead zinc enterprises with substantial strength to organize restructuring in multiple ways, promote enterprise restructuring, optimize industry distribution, in order to fulfill scale development,group development, and enhance industry competitiveness.

“Growing bigger and stronger” has become a mission for the nonferrous metal industry during the “Twelfth Five Year” period. Chen Quanxun told the reporter frankly that China is the largest producer of nonferrous metal, its output of ten main varieties last year was 31,350,000 tonnes, however at the same time,the majority of global nonferrous metal mineral resources is controlled by a few countries, most of the nonferrous metal prices are manipulated by several oligarchs, most profits are retained in the hands of a few multi-national corporations, most technology patents are controlled by developed countries.

During the “‘Eleventh Five Year’ period,the annual investment growth rate of China’s nonferrous metal industry was 32.7%, growth of income from main business was 29.4%, but the profit growth rate was 18.2%, which falls far lower than investment growth, according to initial calculation, last year the return on sales of the whole industry was only around 4.8%,which differs greatly from the 10% since the founding of the People’s Republic of China.Return on assets was only 6%, which is equivalent to the interest rate of long term loan; it is the same with working for the bank.” Chen Quanxun said.

During the “Twelfth Five Year” period, the added value of the nonferrous metal industry(comparable price) will experience annual average growth of 10%, the annual average growth margin of ten types of nonferrous metals is kept around 8%. Kang Yi indicted that,during the “Twelfth Five Year” period, through optimizing industry structure, improving development quality and benefits, and effectively controlling the over-fast growth of smelting production capacity, it is intended to further increase the profit level of the nonferrous industry.

In the aspect of industry structure, Kang Yi disclosed that during the “Twelfth Five Year”period, nonferrous metal enterprises will adjust and restructure industrial chain and value chain, control key links of industrial chain and core technologies, promote the industrial chain to transform from low end to mid to high end,enhance core competitiveness. By 2015, above 90% of aluminum production capacity will have self-equipped power supply or directly purchased power supply, above 95% of copper smelting and aluminum equipment will reach world leading standard, above 85% of lead zinc smelting equipment will reach world leading standard.

“Through industry policy guidance, it is planned to further optimize the deployment of China’s nonferrous metal industry.” Kang Yi said. He told reporter that it is necessary to strictly control newly built smelting projects in regions with no guarantee in resource and environment capacity; aluminum production capacity will move to the west in an orderly manner

“In 2015, the percentage of the copper, aluminum output of enterprises with capacity above 200,000 tonnes in the national total output will respectively reach 90% and 95%, 3 to 5 nonferrous metal enterprises will rank among world top 500 corporations, the number of en-terprises with sales volume surpassing 100 billion yuan will top 10.” Kang Yi said. He emphasized that it is necessary to develop a group of enterprises to join the ranks of world top class companies, so as to become large corporations and large enterprise groups with selfowned intellectual property rights and international competitiveness.

It is worth noting that with the continual growth in nonferrous metal output, the foreign dependence of mineral resources is rising, serious shortage of resource can hardly be reversed fundamentally. The reporter has learned that at present the foreign dependence of nonferrous metal resources is very high, the import dependence percentage of copper has reached above 70%, that of aluminum has reached above 50%, that of lead and zinc both has exceeded 30%, that of nickel has reached 78%.

As a result, resource guarantee has also become one of the key points in the “Twelfth Five Year” of the nonferrous industry. Kang Yi indicated that during the “Twelfth Five Year” period it is necessary to further strengthen prospecting and exploration in possible domestic deposit formation areas, increase domestic backup nonferrous metal mineral resources. In particular, it is necessary to strengthen prospecting and exploration in key areas with potential of mine formation, pay attention to Tibet Gangdise metallogenic belt,Tianshan-Beishan metallogenic belt, “Sanjiang” metallogenic belt in the Southwest, and Daxing’anling metallogenic belt, develop a batch of important nonferrous metal reserve resources.

“Meanwhile the industry will intensify efforts to utilize oversea mineral resources, strive to develop new overseas mineral resource base,and strive to increase the resource guarantee of copper and aluminum to 55% and 75% respectively by 2015.” Kang Yi said.