Stricter environment laws hit lead smelters
(Reuters)
Updated: 2005-11-01 07:11

China's stricter environmental regulations are delaying construction of a 80,000-tonne-per-year lead plant in Henan, but are encouraging small lead producers in Yunnan to merge their operations, industry officials said on Monday.

Privately held Dongfang Gold and Lead Co. would start building its new lead plant by late December this year, having delayed construction by more than a year, an official said.

The construction was originally planned to have begun in July 2004.

"They have been doing the environmental assessment for the project," the official said, referring to the environmental authority of the Henan provincial government in south-central China.

Dongfang also operates another 60,000-tonne-per-year lead plant, which has smelting and refining capacity.

Emissions from Dongfang's 60,000-ton lead plant exceeded levels set by the government when the plant ran trials in April 2004, a report posted on the web site of the State Environmental Protection Administration said.

The official said Dongfang had already spent more than 10 million yuan to upgrade the 60,000-ton plant in Jiaozuo city and it now met requirements of the provincial environmental authority. He added that emission violation would not affect the approval for its new lead plant.

LEAD PRICE RISES

Lead, used in car batteries, cable covers and solder for pipes and plumbing, rose 1.7 percent in value so far this month to $961 a ton on Monday for delivery on the three months of the benchmark London Metal Exchange.

China is a major lead supplier in the world but its exports are falling due to strong domestic demand.

In September its refined lead exports fell to 21,962 tons, down 37 percent from August and 51 percent from July of 2005.

Small lead producers in Gejiu city in China's southwestern Yunnan province struggle to pay big bucks to upgrade their smelters as the local environmental authority monitor their emissions closely.

Three small lead producers in the city have merged to become Zhen Xing Lead Co. in face of the stricter regulations, that require stronger financing ability. Zhen Xing has capacity of 60,000 tons refined lead a year.

"The environmental authority monitors smelters' emissions 24 hours a day," said a senior executive for Zhen Xing, which is the largest lead producer in Gejiu city.

More than 20 lead smelters, including Zhen Xing, are operating in Gejiu with combined smelting capacity at about 200,000 tons a year.

"Others will have to do the same," the executive said, referring to mergers.

China produced 1.7 million tons of refined lead in the first nine months this year, up 24.5 percent from a year ago.