JX Advanced Metals to cut copper output and boost recycling

Planned cuts to refined copper production at JX Advanced Metals Corp. will run to the tens of thousands of tons, a spokesperson for the Japanese company said Thursday, declining to give a more precise number.

JX said on Tuesday it’s considering reducing output due to tight supplies of concentrate, the feedstock for the refined metal. The company owns 48% of Pan Pacific Copper Co., the biggest producer in Japan with total annual refined copper capacity of 650,000 tons.

Production cuts are just one element of JX’s strategy, though. While the firm is scaling down smelting operations, it’s also strengthening its recycling business, including the extraction and sale of niche metals from electronic devices, the spokesperson said.

The world’s copper smelters are grappling with a shortage of ore, which has pushed the spot fees they charge for processing concentrate deeply into the red. Half-yearly treatment charges are currently being negotiated, and given the shortage of ore it’s global miners that are firmly in the driving seat.

Miners began the talks by proposing negative fees, a first for longer-term deals that would severely affect profits at smelters. The JX spokesperson confirmed the company has been presented with tough terms, declining to elaborate further while the negotiations are ongoing.

JX’s cuts are in line with expectations, given the industry’s clash over fees, and are likely to be followed by other smelters, said Zhao Yongcheng, an analyst with Benchmark Minerals Intelligence Ltd. “This is an ongoing process of eliminating excess smelting capacity as the market re-balances,” he said.

(By Reina Sasaki)