Pan Pacific Copper to Resume Saganoseki Smelter by Mid-February

Japanese largest copper smelter, Pan Pacific Copper (PPC) tries to resume operation at Saganoseki smelter and refinery in Oita by mid-February after the smelter stopped operation due to fire on January 7. The firm utilizes idled facilities in the group for the repair to minimize the lead time for early restart.

The smelter has annual 450,000 tonnes of crude copper output capacity. The smelter makes 230,000 tonnes of electrolytic copper and ships remaining metal to Hitachi refining plant with 220,000 tonnes of output capacity in Ibaraki.

The fire damaged crude copper making facilities. With the damage, the smelter cannot make crude copper impacting on the downstream of electrolytic copper making operation.

PPC planned 182,400 tonnes of copper production at Saganoseki and Hitachi plants in second half of fiscal 2011 ending March 2012 as of October 2011. The production loss could reach 30,000 tonnes for one month idle. The firm tries to minimize the delivery impact on contract users at home and abroad by cutting spot based shipment for offshore buyers. The firm will keep the delivery schedule even through spot purchase from third parties.

The firm canceled ore purchase from Escondida mine of Chile for planned purchase volume in 2012 while PPC negotiated with BHP Billiton to set the ore purchase condition. PPC will keep talking with other mining companies for the ore purchase terms while PPC already agreed with Freeport McMoRan Copper & Gold at US$ 63.50 per tonne of treatment charge and 6.35 US cents per pound of refining charge for 2012-2013 shipment, which represent total US$ 359 per tonne of margin for the smelter.