Economy

Lingering drought threatens SW China non-ferrous metal production

(Xinhua)
Updated: 2010-04-10 17:19

NANNING - Output by some non-ferrous metal producers in southwest China's drought-plagued Guangxi Zhuang autonomous region has plunged sharply and could stop altogether if the dry weather continues.

In Nandan County, which boasts more than 11 million tons of verified non-ferrous metal reserves, companies had cut production by 30 percent, said Miao Zhilong, head of the county's economic and trade bureau.

"If the drought continues for another month, they are very likely to suspend production," Miao said.

The non-ferrous metal industry, despite its high power and water consumption, had long been a major contributor to the economy in Guangxi and neighboring Guizhou and Yunnan provinces, he said. "We estimate that local revenues in Nandan will drop 25 percent in April year on year."

A major manufacturer of electrolytic zinc in China, the Nanfang Non-ferrous Metal Smelting Co Ltd, in Hechi city, has shut down two production lines at its zinc plant this year.

"We need 20 tons of water to electrolyze 1 ton of zinc. Since March, our daily water supply has shrunk from 10,000 cubic meters to 3,000 cubic meters and our daily output has dropped by 40 percent from 600 tons to 380 tons," said plant director Yang Youping.

As of Thursday, the severe drought in Yunnan, Guizhou, Guangxi, Chongqing and Sichuan had caused drinking water shortages for 20.88 million people and 13.68 million head of livestock, according to the Office of State Flood Control and Drought Relief Headquarters.

However, the drought would not cause significant fluctuations in non-ferrous metal prices at home or abroad, said Zhu Rujun, a senior investment consultant with China Merchants Securities Co Ltd.

"The drought-stricken regions account for a small proportion of the country's total non-ferrous metal output. There is ample non-ferrous metal stock in both the domestic and global markets," Zhu said.