Metal Stew Anyone ...Chinese smelters begging
By David Bond
November 01, 2005
www.silverminers.com
Lijiang, China – If you’ve got a silver, lead, copper or zinc mine anywhere in the world, the Chinese smelting industry would like a word with you: They have cash.
Smelters here are paying a premium for mine concentrates and even advancing payment for future shipments of cons – a market phenomenon unheard of in the North American mining industry, where miners wait months for smelter payments following shipment.
“China is short of silver concentrate supply and has to import a large amount of silver concentrates contained in lead, zinc and copper concentrates. In 2005, China will import 20,000 tonnes of silver concentrates and will import hundreds [more tonnes] of silver contained in lead, zinc and copper concentrates,” said Sun Youping of the China Non-Ferrous Metals Industry Association.
There are some 30 large non-ferrous smelters operating in China, compared with just two in the United States, and they are hungry. North American miners operating over here are enjoying this seller’s market. Myles Gao, president of Silvercorp, which has opened the world-class Ying silver mine in central China, said nearby smelters are advancing payments for raw ore shipments at the rate of about 75 percent of net ore value.
Smelters – Chinese or otherwise – really only have two speeds: full-tilt or shutdown. Running at fractional capacity reduces income for the smelter, but the costs remain the same as for full production. Thus premiums and advanced payments are there for the offering.