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Report: Codelco may end supply agreement with Chinese copper giant

Chilean state-owned copper miner Codelco may not renew a deal to supply copper concentrate to troubled Chinese smelter Shandong Fangyuan this year, Reuters reported Jan. 13, citing three sources with knowledge of the matter.

Codelco was in negotiations to supply Fangyuan, a long-term customer, with 20,000 to 40,000 tonnes of copper concentrate in 2020, but talks stopped in December 2019 when rumors of Fangyuan's bankruptcy surfaced, sources told the newswire.

The smelter had denied that it had filed for bankruptcy and said operations were running normally, according to Reuters.

Fangyuan, located in China's Shandong province, has an annual production capacity of 700,000 tonnes of refined copper and accounts for 3% of global output. One of the sources said the smelter is running at 25% to 35% of capacity.

The smelter also depends on trading houses such as Trafigura Beheer BV for copper concentrate supply, Reuters added.

Fangyuan did not respond to Reuters' email seeking comment. Codelco said in a statement to Reuters that it renewed a supply contract with Fangyuan in 2019, adding that "for now, we are not in any negotiation."

Trafigura declined the newswire's request for comment.