More good news..From FT.com, no less. Things are looking distinctly rosier.
Trafigura buys into China copper smelter Jinchuan Group
By Lucy Hornby in Beijing
©AFP
Trafigura, the commodities trading house, will take a minority stake in a new copper smelter in southern China, marking only the second time that a foreign company has made a large investment in the Chinese non-ferrous metals industry.
Trafigura on Friday said it had agreed to buy a 30 per cent holding in a copper smelter belonging to state-owned Jinchuan Group, China’s top nickel miner and one of its largest copper producers.
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Although the group did not disclose a price, a person familiar with the matter said that Trafigura had agreed to pay $150m for the 30 per cent stake.
The smelter is in Fengchengang, a newly developed industrial area in Guangxi province on China’s southern coast. The investment – Trafigura’s first major investment in the country – still requires government approval.
The purchase follows a policy, first proposed in 2012, of introducing private capital investment in Chinese infrastructure while keeping control in the hands of state groups.
Earlier this week, state-owned oil Sinopec said that it would allow outside capital to invest in its sales and marketing network – a move that is likely to involve a restructuring of that unit to allow direct equity investment, although the specifics are yet to be decided.
China’s non-ferrous metals industry has little direct foreign investment, with the exception of the joint venture copper smelter in Anhui Province run by Tongling Nonferrous Metals Group and Sumitomo of Japan.
The smelter investment comes as Trafigura awaits a major new stream of copper concentrate supply from the mammoth Oyu Tolgoi mine in Mongolia.
Trafigura, which is already one of the biggest traders of Mongolian copper concentrate, said late last year that it would help finance the second phase of the mine in return for the right to purchase an unspecified amount of the mine’s output.
Oyu Tolgoi began production last summer, but development of the second phase is on hold while developer Rio Tinto and the Mongolian government wrangle over the terms of the investment.