Indonesia's exports of copper concentrate, which had been severely affected by a six-month tax dispute, had finally turned the corner after the indonesian government had given in。
On 4 august, the united states freeport, mcmurlen copper gold corporation (hereinafter referred to as freeport), stated in indonesia that exports of copper concentrate would resume by wednesday (6 august), with the first 10,000 tons exported to china. The freeport owns and operates the largest open-air copper mine in indonesia, grasberg。
In january this year, the minister of finance of indonesia stated that import and export tariffs on copper concentrate would rise to a peak of 60 per cent of exports of goods by the second half of 2016, with the intention of enhancing the country's refining capacity. This, however, has caught up with newmont mining, the de facto controller of the country's two giant copper mines, the freeport and the large shareholders and operators of the batuhijau mine。
Newmont is known to have delivered 81,000 tons of its inventory this year because of difficulties in supporting the continued operation of the batu hijau mine. The mine was closed for maintenance in june. For its part, the freeport reduced the daily grinding of the grasberg mine by about half to accommodate the digestive capacity of indonesia's only copper smelter. The freeport has a share in the refinery。
The daily economic news journalist learned that after weeks of negotiations, newmont announced in early july that it would seek international arbitration. On 8 july, the freeport side indicated that it had agreed to a draft memorandum of understanding but had not yet signed it. At that time, the company did not provide a timetable for the resumption of exports. Subsequently, an official from the ministry of mines of indonesia indicated that the government expected to issue a permit for the export of copper concentrate to the freeport within a period of one to two weeks。
Public information indicates that, following a dispute settlement agreement with the indonesian government, free ports are expected to export 756,000 tons of copper concentrate in the second half of this year。
Domestic copper refiners believe that once indonesian copper concentrates enter the market, sellers will be forced to pay more spot processing fees to smelters. In the copper refining industry, processing fees are paid by the seller to the copper smelter and are deducted from the final sale price based on the price of copper at the london metal exchange (lme)。
According to lee xiaobyu, an analyst in the creteau and copper industry, processing fees are usually higher when supplies are increased or the capacity to operate smelting is reduced。
One of the domestic copper smelters also stated that “the resumption of exports in free ports will have a significant impact. Once exports have resumed, processing refining fees may jump to $110 per ton immediately.”
According to lee, the first concentrates were shipped to china and, for domestic smelters, the supply of copper would be relaxed and the refining of copper concentrates would follow positively, but the price of copper would be under pressure in the short term。
However, a researcher of non-ferrous metals in international futures indicated that china imported nearly 1 million tons of copper concentrate a month, and that the relatively small changes in supply resulting from the above-mentioned news would not change much in the pattern of refining copper supply and demand in the short term。
Responsible editor: zhang dei
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