China's Preferential Tax Policy on Alumina Scrapped Amid Global Mining Boom

Strategic Insights -

China ended a preferential tax policy on alumina imports and aluminum exports, citing the country's top economic planning agency, the National Development and Reform Commission. This move comes as global mining companies, including Rio Tinto and Freeport-McMoRan, report strong production and revenue growth due to rising demand from China. Meanwhile, Asarco is set to restart copper concentrates production despite a labor dispute, and Southern Peru Copper expects continued strong financial results.

Key Takeaways:

  • China's scrapping of the preferential tax policy on alumina imports and aluminum exports is expected to impact global mining companies that rely on China's large market.
  • Rio Tinto reported that most operations continued to produce at or near capacity in the second quarter, driven by strong Chinese demand.
  • Asarco's president announced the restart of copper concentrates production at its Mission Mill, despite a strike by over 1,500 union workers.
  • Southern Peru Copper's CEO predicts continued strong financial results for the rest of the year due to improved ore grades in Peru and Mexico.
  • Freeport-McMoRan's CEO stated that the company's debt has been reduced by $170 million this year due to high gold and copper prices and access to higher-grade ores.
  • Freeport-McMoRan swung to a second-quarter profit as production rebounded from year-ago interruptions.
  • Chilean copper giant Corporacion Nacional del Cobre de Chile, or Codelco, plans to hold its production costs steady until 2007 and then begin lowering them.
  • Copper futures on the Comex division of the New York Mercantile Exchange made steady gains on Tuesday, bouncing from near the unchanged level at the start of the session.

Statistics:

  • China ended a preferential tax policy on alumina imports and aluminum exports, starting July 20th.
  • Rio Tinto reported most operations producing at or near capacity in the second quarter.
  • Asarco's strike involves over 1,500 union workers.
  • Southern Peru Copper's CEO predicts continued strong financial results for the rest of the year.
  • Freeport-McMoRan's debt has been reduced by $170 million this year.
  • Freeport-McMoRan swung to a second-quarter profit, with production rebounding from year-ago interruptions.
  • Codelco plans to hold production costs steady at $0.80 a pound until 2007.
  • Copper futures on the Comex division made steady gains, settling up from near the unchanged level at the start of the session.

Sources:

  • Dow Jones Commodities News via Comtex, July 20, 2005
  • China Daily
  • Rio Tinto PLC (RTP)
  • Asarco Inc. (ASX.XX)
  • Grupo Mexico SA de CV (GMEXICO.MX)
  • Southern Peru Copper Corp. (PCU)
  • Freeport-McMoRan Copper & Gold Inc. (FCX)
  • Corporacion Nacional del Cobre de Chile, or Codelco
  • Dow Jones Newswires
  • COMTEX (http://www.comtexnews.com)