Glencore International says it will re-start operations at the Philippines’ only copper refinery by June this year, six months after a major fire tore through the facility.
The Philippine Associated Smelting and Refining Corporation (PASAR), which is majority-owned by Glencore, closed its doors in January when fire destroyed anti-pollution devices at the central Leyte province site.
“Our people are now busy refurbishing the plant because we want it to be in top shape when we operate by the middle of this year, in June or July,” says PASAR assistant vice-president J Paul Tan.
He says the company has bought new anti-pollution devices from Chinese suppliers to replace damaged equipment. “The smelter could currently be operated but could cause atmospheric pollution, so Glencore decided not to operate it because we will be breaking (environmental) laws in the Philippines,” says J Paul Tan.
The company has suffered significant lost revenue from the halt in copper processing and exports. The smelter annually processes 720,000 tonnes of copper concentrate and the refinery has an annual capacity of 215,000 tonnes of cathodes, which earned the company $1.8 billion in 2010 from copper exports. In addition to lost revenue PASAR is also spending $4 million a month for employee salaries, electricity expenses and other costs.
Market sources reported in February that Glencore had been caught short by the shutdown, and was buying material to deliver against its commitments from ports in Europe as well as New Orleans. However, Chinese demand has not been as strong as expected due to Europe’s economic slowdown hurting its export markets.
PASAR has been producing copper cathodes for export since 1976 from its 80-hectare site and was acquired in 1999 by Glencore from the Philippine government. PASAR buys and refines copper concentrates from mines in Australia, Canada, South East Asia including Papua New Guinea, and South America.