12/06/26
No value in making copper cathodes in Brazil: Vale
Brasilia, 12 June (Argus) — There is no value in making copper cathodes in
Brazil, as producing red-metal concentrate already aggregates most of the gains
a producer can have, a spokesperson for Vale Base Metals (VBM) said at a market
event on 10 June. Concentrate aggregates 90-94pc of the value in copper's supply
chain, leaving little gains in moving further downstream and producing copper
cathodes, said VBM's corporate affairs director José Luiz Marques at the event
organized by Brazil's mining institute Ibram. Marques explained that, especially
in a high-price environment such as today's, VBM is already maximizing value
through copper concentrate production. "When copper demand rises, treatment and
refining charges (TC/RC) plunge, which is good for concentrate producers,"
Marques said, explaining that VBM prices its concentrate based on a formula
consisting on London Metal Exchange figures, minus TC/RC fees and specific
discounts depending on impurities. This means that the lower the processing
fees, the higher the price of the concentrate. "It is a great time to be a
copper miner these days," he said during a panel at the Ibram event. The costs
to implement a smelter are very high, so there is not enough value added over
the concentrate to make an investment worthwhile, according to Marques. "The
aggregated value of copper concentrate needs to be around 60-65pc to make copper
cathodes a valuable addition to Vale," he said, noting that few jurisdictions
are able to profit from smelting. Criticism of Brazil's critical minerals bill
Brazil's critical minerals bill , which considers all mineral resources and
commercial partners equal, should have looked at copper through a different
lens, Marques argued. Marques argued that copper has a much more established and
liquid market than all other critical minerals, which should have been accounted
for in the bill. Half of the bill's financial benefits are contingent on
companies "processing and transforming" critical minerals in Brazil. As VBM and
other local copper producers stand to gain little value in doing so, they could
be prevented from accessing over R5bn in tax credits in a five-year period. VBM
is slated to invest $10bn in the next 10 years in Carajás, its flagship copper
asset. VBM's Marques also argued that the bill does not cover the most-needed
improvement for Brazilian critical mineral producers: celerity. "It takes an
average of 17 years to start-up a copper project in Brazil, and in 15 years the
world will be in a supply deficit, so the numbers don't match," he said. "Only
with celerity and agility in bureaucratic processes will Brazil be able to
compete in the global copper industry." He noted that China added one-third of
its smelting capacity in the last 10 years as a successful example of agile
processes. Marques echoed the criticisms of fellow panelists at the Ibram
conference, who pointed to slow environmental licensing and little
predictability with bureaucratic processes, especially regarding timelines. By
Pedro Consoli Send comments and request more information at
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