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China Daye Non-Ferrous Metals Mining said on Friday its subsidiary would take a majority stake in a 5.7 billion yuan ($803.63 million) plant that will produce 400,000 tonnes a year of refined copper in its home province of Hubei from 2021.
The announcement comes at a time of uncertainty over the prospects of copper demand in China, the world’s biggest consumer of the metal widely used in power and construction, amid a bruising trade spat with the United States.
Daye Non-Ferrous, which produced 500,400 tonnes of copper cathode in 2018, said its Daye Metal unit would stump up 1.3 billion yuan, or 52% of the equity in a joint venture (JV) company that will set up the plant in the city of Huangshi, central China, according to Hong Kong stock exchange filing.
Trading in Daye’s shares has been suspended since Aug. 28 pending the announcement.
The other partners in the JV company, provisionally named Daye Non-Ferrous (Xingang) Copper Co Ltd, are Huangshi state-owned Assets Management on 8%, subsidiary Huangshi Xingang on 16%, and China No. 15 Metallurgical on 24%. Daye Metal will nominate three of the JV’s five directors.
Like Daye Non-Ferrous, China No. 15 Metallurgical is controlled by state-owned Chinese miner China Nonferrous Metal Mining Group (CNMC).
The plant “is expected to commence construction in the second half of 2019, with … commencement of production of copper cathode in the first half of 2021,” the filing said, adding that the plant was expected to generate annual revenue of more than 20 billion yuan.
The partners are looking for a “suitable piece of land” for the project, which will have a site area of 1,500 mu (247 acres), in a Huangshi Xingang industrial park, the filing said.
($1 = 7.0928 Chinese yuan)
(By Tom Daly; Editing by Sherry Jacob-Phillips)
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