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China stops output at zinc smelter
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12th September 2001
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China’s biggest zinc producer, Huludao Zinc, has stopped production at one of its smelters due to dismal global prices, plant officials said last week.

Production at Huludao’s number three smelter, with a yearly electrolytic zinc production of 130 000 tons, had been halted for maintenance in July and that shutdown would be extended further pending a recovery in prices, stated a Huludao spokesman “We have arranged a production halt, and resumption of operations will depend on world zinc prices,” he told Reuters.

However, the largest mining company, BHP Billiton, said China’s staging of the Olympic Games in 2008 may boost Asian demand for metals used in construction, such as copper and zinc.

Beijing plans to spend 180-billion yuan ($22-billion) on roads, subways and stadiums for the Olympics and has started construction. That is likely to mean increased demand for metals, such as zinc, used to galvanise steel, and copper, at a time when slowing world growth is weighing on prices.

Huludao’s other two zinc smelters with total yearly production capacity of 200 000 tons of distilled zinc will continue to operate, the spokesman said. The volatile zinc market is also having an effect on zinc producers in South Africa.

Anglo American has officially deferred its investment decision with regard to the $850-million Gamsberg zinc project in the Northern Cape, citing structural problems in the zinc market as the key reason.

 

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