Beijing refuses overseas listing by nickel supplier for strategic reasons
Beijing will not allow Jinchuan Non-ferrous Metals Co, the third largest nickel supplier in the world, to be listed overseas because of 'strategic' reasons.
Gansu province vice-governor Guo Kun said the local government had applied to the China Securities Regulatory Commission (CSRC) for the company to be included in the fourth batch of overseas listings.
The application was turned down because the state did not want to put the country's largest nickel supplier in the hands of public shareholders, he said.
Mr Guo said Gansu's application on behalf of Jinchuan was the only one it made for the fourth batch of overseas listings.
Jinchuan meets more than 95 per cent of the country's demand for nickel, which is necessary for steel refineries.
It is the world's third largest supplier after Canada and Australia. It produces 40,000 tonnes of nickel and 20,000 tonnes of copper a year.
The company is a wholly owned subsidiary of China National Non-ferrous Metal Corp.
Last year, it made a profit of 400 million yuan (about HK$372 million) on a turnover of three billion yuan.
While it has reported spectacular profits in the past decade, the company is facing mounting pressure from imports.
A company official said the company planned to reduce the price of nickel from about 74,000 yuan a tonne to 70,000 yuan to counter foreign competition.
It previously had cut the price from about 80,000 yuan a tonne.
Nickel is quoted at about US$6,000 a tonne on the London Metal Exchange.
The official said the company was considering controlling output of the metal for the rest of the year to stabilise the price. He said the government had no plans to control imports.
The company's profit target this year is 460 million yuan, of which about half is expected from nickel.
The official said the company planned to invest more than a billion yuan to expand production capacity to 60,000 tonnes a year by 2000.
'If we have a shortage of raw material [after the expansion], we may import from western Xinjiang and Shanxi.' in the future.' As with most state enterprises, Jinchuan has the problem of looking after retired workers. The official said that about five workers were needed to support every two of the 30-year-old company's retired workers.
TRATEGIES State rejects overseas shareholder stake in main nickel producer Jinchuan may limit production to control prices
