A report from Huasheng Online, a provincial government website, said this month the company will invest in new smelting technology that eliminates the discharge of industrial wastewater.
China Minmetals plans to invest in facilities in the Shuikoushan area, located in the south of Hunan, Huasheng Online reported.
The move follows the Chinese Ministry of Environmental Protection’s accusation that nonferrous metals producers in Hunan are “big corporate bullies” that have failed to address a series of environmental violations. Most of the producers are China Minmetals subsidiaries.
Scientists estimate that more than 100,000 Chinese firms have relocated in the past 16 years, abandoning mines and smelting plants and leaving behind huge amounts of dangerous waste.
Many experts believe that base metals prices will rise as China repairs that and other environmental damage. That is the case for John Kaiser of Kaiser Research, who explained in a recent interview why he believes these metals have potential upside. Click here to listen to the full interview.
Copper prices rallied on Monday to their highest level since November 2014, reaching $6,623 a tonne. Prices have been supported in part by hopes of Chinese infrastructure spending.
China, which accounts for almost half of the world’s copper consumption, has posted better-than-expected economic growth figures so far this year, but some analysts remain cautious as a second-half slowdown could pressure prices.
“In our opinion, this price level is not justified,” Commerzbank analysts wrote in a note. “Metals prices only seem capable of moving in one direction just now — namely upwards,” they said.
Similarly, FocusEconomics analysts expect that copper prices will dip this year after getting slightly ahead of fundamentals in recent months. They project that prices will average $5,749 in Q3 and $5,722 in Q4.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.