Emerging Markets: Rise In Copper Prices Puts Shine On Chinese Producer

Company To Watch: Jiangxi Copper/China

Rise in Copper Prices Puts Shine on Chinese Producer

Jiangxi Copper, based in Guixi City in China’s inland Jiangxi Province, is the country’s largest producer of the red metal. It owns all five of China’s biggest copper mines and also has mining projects in Peru and Afghanistan.

Signs of recovery in the global economy are lending support to the price of copper, which rose to its highest level of the year in August. Copper will outperform other metals, such as aluminum and nickel, due to rising emerging market demand and limited spare production capacity worldwide, according to a report by Goldman Sachs. Many new mine development projects were postponed or canceled during the recession.

Jiangxi Copper, with shares listed in Shanghai and Hong Kong, as well as London, is seeking permission from the Chinese government to buy electricity directly from power companies in an effort to reduce its costs. The company employs 34,000 people and is China’s largest producer of copper products. It also is a major producer of gold, silver and other precious and rare metals that are mined along with copper.

The State Reserve Bureau of China has imported large amounts of copper in the first half of this year to rebuild its strategic stockpiles, which has contributed to the rising price of the metal. Recent reports of rising home sales in the US have also boosted the price of copper, which is used in construction and power industries.

Jiangxi Copper has an annual copper ore production capacity of 900,000 metric tons. Some 120,000 tons of that output comes from the company’s Dexing Copper Mine, the largest open-pit copper mine in China.