TEPCO’s Hike to Cost 5 Billion Yen for Japan Nonferrous Metal Industry

Japan Mining Industry Association’s chairman Nobumasa Kemori said at regular press conference on Thursday higher electricity cost could increase the member companies’ cost by 5 billion yen per year in their activities in power supply area of Tokyo Electric Power Company (TEPCO). The president of Sumitomo Metal Mining said TEPCO explained the logic and term for the price hike but the members don’t agree with the proposed electricity hike. He emphasized the industry seeks additional effort to TEPCO.

The industry calculated the impact for the members’ activities including nonferrous metal smelting, recycling and processing. Mr. Kemori said other power companies could increase electricity price when other power companies’ cost also increase due to lower nuclear operation rate.

Japanese smelters’ copper treatment and refining charge improved by 13% from a year earlier at the talk with Freeport McMoRan Copper & Gold. Mr. Kemori said the smelters margin is still narrow when yen exchange rate already increased by more than 10%.

Mr. Kemori said the firm canceled new copper ore contract with BHP Billiton when the firm cannot get reasonable condition. He emphasized smelters should seek better margin when the charges is still less than US$ 300 per tonne compared with US$ 600 of cost based on former exchange rate.

Mr. Kemori warns zinc ore supply will decrease toward 2014 and zinc ore supply situation could be similar to tight copper ore when Century zinc mine in Australia will close the operation.