Inspenet, November 3, 2023.
Could copper production be drastically reduced?
Beijing is considering plans and has sought industry input to impose restrictions on the world’s largest copper processor to reduce excess capacity and carbon emissions, according to people familiar with the matter. These restrictions could come into force by the middle of the decade .
This measure could alter global trade in the metal. China is importing copper ore at a record pace to fuel its expansion, which is beginning to reduce purchases of refined metal and raise concerns that smelters are overly reliant on foreign suppliers.
At the same time, a shortage of mined copper is looming as smelters around the world ramp up operations to produce a metal seen as crucial to the energy transition. Declining grades and rising exploration costs are other obstacles to supply.
China has put in place restrictions to control supply and reduce emissions in other leading global raw materials sectors. Since 2017, a 45 million tonne cap on aluminum capacity has been implemented, and oil refining capacity will be capped at 1 billion tonnes in 2025.
Starting in 2021, the Chinese steel industry must limit its annual production to the previous year’s level or below that level. So far, the National Development and Reform Commission, China’s top economic planning body, has not responded to requests for comment.
The goal: reduce emissions
Instead of setting a fixed limit on copper production, consideration is being given to smelters finishing their ongoing projects before the restrictions come into force, expected in the middle of the decade. Subsequently, any additional capacity would be subject to emissions regulations administered by individual provinces.
The Chinese base metals industry, which includes copper production, has expressed its commitment to peak emissions before 2025. In this context, the plan would allow smelters to expand after 2025 as long as they close the most polluting operations. In addition, it could lead to an increase in capacity in the next two years or incentivize smelters to expand abroad, following the example of the aluminum industry.
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