Japan Copper Smelters Keep Rejecting End of PP System

Hirokazu Yoshikawa, chairman of Japan Mining Industry Association and chief executive officer of Dowa Mining, declared the insistence again at a regular press conference of the Association on Thursday that Japanese nonferrous metal smelters would not accept abolishment of price participation system in price negotiation with copper ore suppliers for ore shipment from July 2006 to June 2007. He showed the concern that next price negotiation for ore shipment in 2007-2008 might be impacted if the smelters and the ore suppliers cannot reach an agreement in the present negotiation, while he said the negotiation should be based on world supply and demand balance of copper ore at present and in future. Along price participation system, Japanese copper smelters and offshore ore suppliers distribute profits gained from the surge of copper price. The smelters take 10% and the ore suppliers the rest of the profits. Mr. Yoshikawa said price participation system should be maintained since the smelters could make use of the gain to advance their equipment, productivity, technology development, environmental measures and cost reduction and these reinforcements could generate benefits for the ore suppliers consequently. Mr. Yoshikawa explained the smelters would become to treat low grade ore with much impurity or to utilize slag from smelting processes thanks to the business reinforcement. Utilization of low grade ore and slag could have much relation with ore suppliers businesses.