Less sulphuric acid could impact SXEW plants
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Ortonowski said in the event that copper concentrate flows from mines in Democratic Republic of Congo to smelters in Zambia were reduced, it would cut the amount of sulphuric acid produced by the smelters shipped to SXEW plants in both countries, potentially impacting their ability to produce copper cathodes.
"The 5% import duty will increase raw material cost increases for smelters so may choose to reduce their concentrate consumption. The smelters will produce less copper blister, anode and cathode and much less sulphuric acid, which could lead to less SXEW cathode production in the region too," he said.
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Ortonowski said the copper concentrate market in Zambia was currently in a moderate to mild deficit that he qualified as a market in balance, but the 5% royalty could "plunge into extreme deficit especially in 2019 and 2020", with potential to see 100,000t of copper in concentrates not exported from DRC.
Supporting his argument, Ortonowski said Africa was the most responsive region of the world to copper price drops. "Mined copper loss was 422,000t of production in 2017 due to the copper price fall," he said.