Copper Boom sees Zijin mining unit ramp up expansion plan
(Bloomberg) – Chinese firm Zijin Mining Group Co. is ramping up expansion of its copper business in Serbia, one of the few signs to date of the metal’s recent surge to a record encouraging plans to faster supply.
Serbia Zijin Copper, which operates four mines and a smelter in the Balkan country, has a target to complete the expansion of capacity within a year until 2024, said Jason Zhang, deputy general manager of the operation at Bor. Zijin took over the assets in 2018 and is more than halfway from a $ 1.26 billion investment that will more than double production to 180,000 tonnes in 2024.
Copper has jumped more than 60% in the past year – hitting a record high in May – amid a recovery from the pandemic and as the transition to green power supports long-term demand prospects. Yet producers face challenges in rapidly increasing supply due to declining ore grades, regulatory hurdles and rising costs. Goldman Sachs Group Inc. said earlier this year that prices needed to rise further to entice more offers to cope with the shortages.
“The production capacity in the mines will increase relatively slowly compared to the needs they have in the green energy industry,†Chief Engineer Benjamin Jiao said in an interview on the outskirts of Bor. “In the long term, copper prices will remain at a high level but may stabilize soon. “
At the time of the takeover, Zijin’s plans centered on a copper price of $ 6,000 per tonne. The metal peaked at nearly $ 10,750 in May, but has since declined to around $ 9,360 as stimulus is expected to be reduced and China prepares to calm the surge in commodity prices.
The Serbian government is under increasing public pressure to improve environmental standards in operations such as Zijin and the country’s only steel producer led by the Chinese group HBIS. A Serbian court fined the Zijin unit last year for two spikes in emissions from the smelter.
With the cleaning of the smelter, residents will be able to breathe “much cleaner air” from August, said Qiu Weijun, deputy general manager for security at the mining complex.
The pollution is “not very good now, but it’s still better than when I was young,” said Branislav Mitric, a 72-year-old second-generation retired miner, who has lived in Bor for most of the time. of his life.
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