China Top Copper Producer Halts Output After Pollution Order

(Bloomberg) -- Jiangxi Copper Co., China's largest producer, is halting all output in the province after the local government ordered the curbs to reduce pollution, a company official said Tuesday.

The smelter received the order on Monday evening to stop production for at least a week before a further assessment based on local pollution levels, the official said, asking not to be identified because of company rules. The firm, which has 1.02 million metric tons of annual capacity in the southeastern province, remains in talks with the government to halt only smelting and not refining operations to minimize losses, according to the official.

China is intensifying its campaign against air pollution by extending its winter manufacturing curbs in 28 northern cities to other provinces. Tongling Nonferrous Metals Group Co., the nation's second-largest copper producer, said earlier this month that it's halting as much as 30 percent of smelting capacity at its main production hub in the eastern province of Anhui after a similar order.

Calls to the Jiangxi provincial government and environmental protection bureau weren't answered Tuesday. The cuts come as China's smelters plan to resume talks with overseas miners on 2018 processing fees next month. The output curbs would reduce smelters' demand for concentrate and support their position in the annual negotiations.

Copper on the Shanghai Futures Exchange surged as much as 0.8 percent to 55,160 yuan a ton before trading at 55,080 yuan as of 1:50 p.m., extending gains from the the highest close in two months on the prospect of improving global demand amid supply constraints.

To contact Bloomberg News staff for this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net, Alfred Cang in Singapore at acang@bloomberg.net.

To contact the editors responsible for this story: Jason Rogers at jrogers73@bloomberg.net, Jake Lloyd-Smith

©2017 Bloomberg L.P.

With assistance from Winnie Zhu, Alfred Cang