BEIJING – Jiangxi Copper, one of China's biggest copper producers, will receive "financial assistance" to the tune of 1.5-billion yuan ($213.10-million) from its parent to repay loans and cut financing costs, the company said.

The support from controlling shareholder Jiangxi Copper comes after the State-run company said this week it would pay $1.1-billion for an 18% stake in Canadian miner First Quantum Minerals, to be part-funded by a syndicated loan of up to $700-million.

Smelters are also facing tough operating conditions amid tepid growth in copper demand in China, the world's top consumer of the metal, and low treatment and refining charges (TC/RCs) paid by miners to process ore.

The financial assistance "can only be used by the company to supplement its working capital or repay bank loans," Jiangxi Copper said late on Wednesday in a statement to the Hong Kong stock exchange.

Using the funding for other purposes required the written consent of its parent, it added.

The interest rate on the six-month loan, due June 4, 2020, is 2.35%, said the company, based in Nanchang, the capital of southeastern Jiangxi province.

Unlike other smelters, Jiangxi Copper also has a trading business that requires a lot of working capital, or money for day-to-day trading operations, said Helen Lau, an analyst with Argonaut Securities in Hong Kong.

"The banks do not have much liquidity themselves - that's why they have to go to the parent to ask for their help," Lau said.

Not including the latest loan, Jiangxi Copper has received seven rounds of financial assistance totalling 4.9-billion yuan from its parent since June, the statement said. The interest rate on the latest loan is the lowest so far.

Jiangxi Copper last month agreed TC/RCs of $62/t and 6.2c/lb with miner Freeport McMoRan for 2020, setting the lowest annual miner-smelter benchmark in nine years - a day after a Jiangxi Copper executive put the company's breakeven TC at $75.

Lau, however, thinks it is unlikely that Jiangxi Copper's smelting business is in trouble given its low production costs.

Spot TC/RCs are currently at $57.50/t, having fallen sharply this year on a tight copper concentrate market.

Jiangxi Copper had total current liabilities of just over 72-billion yuan as of September 30, according to its third-quarter report.