China

Daye Nonferrous’ new 400ktpa copper smelter and refinery located in Huangshi is under construction and is expected to start operations in the December quarter, lifting Daye’s total refining capacity to 1Mtpa. Total investment is estimated at CNY5.71bn (US$883m).

In 2022, Jiangxi Copper’s 65%-owned 180ktpa Guoxin Copper is planned to complete construction and commence production. Jiangxi Copper acquired a 65% stake in Guorun Copper in January 2019 and changed its name to Guoxin Copper. Jiangxi Copper started construction of the Guoxin in December 2020 with an estimated capital investment of CNY1.885bn (US$273.23m).

Also in 2022, Zhongtiaoshan Nonferrous’ new Houma smelter and refinery is expected to come online. The old 50ktpa Houma stopped production in 2018 for relocation and expansion. Zhongtiaoshan's original plan was to build a new Houma with the refining capacity expanded to 350ktpa. However, the plan has been scaled back to 180ktpa. Investment for the new plan is estimated at CNY2.294bn (US$332.46m).

In 2021 and 2022, refining capacity additions from smelter expansions include 300ktpa at Hechi Nanfang Nonferrous’ Guangxi Nanguo Copper, 200ktpa at Shuikoushan Nonferrous’ Shuikoushan Copper, and 100ktpa at Zijin Mining’s Zijin Copper.

Three-staged development is planned for Guangxi Nanguo Copper. Stage one commenced production in 2019, producing 300ktpa of copper cathode. Stage two is planned to start up by the end of 2022, with capacity expanded to 600ktpa. Stage three is scheduled by the end of 2023 taking total capacity to 1Mtpa. However, stage three is not included in AME’s base case supply forecast as it is in the feasibility study stage.

Shuikoushan began operation in 1982 and upgraded to be capable of producing 100ktpa in 2016. Further expansion to 300ktpa is planned in 2021.

Zijin Mining plans to boost Zijin Copper’s capacity to 400ktpa by adding 360 new electrolytic cells and improving other critical pieces of smelter infrastructure. The upgrades are expected to be completed in 2021.

Looking at Tongling Nonferrous, the company completed the construction of its Ausmelt Expansion Phase II Project at its Jinguan plant in June last year. Refining capacity has been lifted by 140ktpa to 640ktpa. Meanwhile, Tongling Jinjian’s Relocation and Expansion Project Stage One was put into operation in October 2020, taking its refining capacity from 130ktpa to 200ktpa and adding an additional smelting capacity of 60ktpa. The ramp-ups from the above two expansions underpin the 2021 Tongling Nonferrous’s group refined copper production target of 1.51Mt, 6% higher than its 2020 production of 1.42Mt. AME forecasts Tongling Jinguan and Jinjia to complete their ramp-ups from the expansion projects by 2022.

Indonesia

In connection with PT Freeport Indonesia’s (PT-FI) 2018 agreement with the Indonesian government associated with the extension of its mining rights from 2031 to 2041, PT-FI committed to construct a new domestic smelting capacity by December 2023, which will have a total processing capacity of 2Mtpa of copper concentrate.

Covid-19-related disruptions have deferred the schedule for the new smelter. PT-FI also discussed with the Indonesian government alternatives to its commitment to build a new smelter. PT-FI is now planning to expand its existing smelter and refinery in Gresik, East Java, by lifting the concentrate treatment capacity by 300ktpa (a 30% increase). This reduces PT-FI’s new smelter development commitment from 2Mtpa of concentrate to 1.7Mtpa.

After talks between PT-FI and China’s Tsingshan Steel over the construction of the new smelter on the eastern Indonesian island of Halmahera collapsed, PT-FI will now go ahead with plans to build the new smelter near its existing copper smelting and refining operations in Gresik, with a processing capacity of 1.7Mtpa of copper concentrate. PT-FI signed an engineering, procurement and construction (EPC) contract with Japanese engineering company Chiyoda in July this year to build the new Gresik smelter with an estimated contract cost of US$2.8bn.

In Indonesia, a combination of policies ranging from investment incentives for metal refiners to outright bans on the export of unprocessed ores will be implemented in order to direct investment into higher value-added mineral activities and away from exporting raw minerals. Indonesia planned to bring forward the full ban of nickel ore to January 2022, however, events around the pandemic have seen this pushed back to June 2023. Copper is also expected to eventually face restrictions on exports of unprocessed ore to encourage more domestic smelting capacities.

Rest of World

In the DRC, the government also attempted many times to introduce similar bans in order to strengthen the country's domestic smelting and refining operations. However, insufficient smelting capacity forced the government to reverse the decisions. The most recent ban ended in April 2021 and has now been replaced with waivers that will be issued on a case-by-case basis, which require the affected companies to submit applications.   

Chinese investors are making a big play in the DRC’s mining sector, particularly dominant in the copper-and-cobalt-rich Haut Katanga and Lualaba areas of former Katanga province. The Lualaba Smelter is 60%-owned by China Nonferrous Metal Mining Group with the remaining 40% owned by Yunnan Copper of Kunming, China. The smelter, which began operations in early 2020, will treat up to 150,000 wet metric tonnes of copper concentrates from the recently-launched Kamoa-Kakula Mine and produce copper blister containing approximately 99% copper that will be returned to the mine, and collected by CITIC and Zijin.

China Nonferrous Metal Mining and Yunnan Copper aim to double the Lualaba’s smelting capacity with the Kamoa-Kakula’s phase two scheduled to start operation in the second half of 2022. According to Kamoa-Kakula PEA, the project will expand by phases and finally reach the processing capacity of 19Mtpa of ore. The construction of a new smelter is also included in the 19Mtpa scenario.

Chinese players continue expanding their global footprints in the mining and smelting sectors. Zijin Mining acquired 63% of Serbia’s state-owned RTB BOR copper mining and smelting company in 2018. Zijin plans to invest approximately US$1.26bn within six years for technological upgrade and expansion of RTB BOR’s four mines and one smelter. Zijin aims to lift refining capacity to 150ktpa of copper cathode from the smelter at the end of its two-phase development plan.

Grupo Mexico is looking at a multi-billion investment in smelting and electricity development in the Baja California peninsula in Mexico. The company’s investment plan plots out the next six years and includes US$2.3bn for expanding smelting capacity in Sonora and US$815m to develop electricity infrastructure on the peninsula.