The Peoples’ Republic of China bought up vast stocks of copper before the credit crunch hit and now it’s about to tighten its grip on the important metal as it contemplates opening a vast copper mine in Mongolia.
Just a few days ago, Mongolian legislators said they would relax the country’s three year windfall tax on both gold and copper. That will take effect from the 1st of January 2011.
Mongolia has vast reserves of copper, and other important commodities and Rio Tinto and Ivanhoe Mines are pressing ahead with the development of a mine just north of the Chinese border.
Copper currently trades at over $6,000 a ton and has shown a steep rise during this year. The Rio Tinto/Invahoe Oyu Tolgoi mining project will come onstream in 2013 but this is only the first of a series of other projects in which China is taking an immense interest.
According to Tom James, an expert on mining and minerals, China will essentially own copper production by 2012, indicating its long term plan to capture important segments of the supply chain market for the IT and other industries.