In an effort to boost industrial production and exports, the mainland, the world's biggest consumer of metals, will allow tax-free imports of copper concentrate and other raw materials for processing into export-bound products, reversing a two-year-old policy of taxing these flows. The 17 per cent value-added tax on imports of copper, nickel and cobalt concentrates for processing into refined copper, unwrought nickel and cobalt powder for re-export would be lifted from February 1, the Ministry of Commerce said in a statement on its website yesterday. A 10 per cent tariff on exports of such products, called tolling trade, would also be dropped, according to the statement. The tolling trade for textiles, plastics, wood and hardware products would be exempt, the commerce ministry said. The move could enhance the competitiveness of mainland metals producers and boost exports of copper and nickel, as it could reduce producers' cost of financing imports, said Heng Kun, an analyst at Essence Securities. 'As China needs to import large amounts of minerals for its industrial production, the new policy could help to improve the profitability of those companies that have an export business,' Mr Heng said. Copper producers such as Jiangxi Copper and Yunnan Copper may benefit from the duty-free policy, as both of them need to import 60 to 70 per cent of their copper concentrate to feed their smelting capacities. Pan Qifang, the company secretary of Jiangxi Copper, the mainland's largest integrated copper producer, said the major advantage of the duty-free policy was that it would increase companies' flexibility in deciding whether to sell the products locally or overseas. 'When international copper prices are higher than domestic prices, we would choose exports, and it would eventually narrow the price gap between the two markets,' Mr Pan said. Zhang Junjie, a joint company secretary of Xinjiang Xinxin Mining, the mainland's second-largest nickel producer, said the company would not benefit from the new policy. All the nickel concentrate it needs are produced from its own mines or bought domestically, and all its products are slated only for domestic sale. In 2006, China ended the tolling practice for some metal raw materials as part of an effort to curb expansion in energy-intensive and polluting industries. Shares of Jiangxi Copper jumped 8.77 per cent and Xinxin Mining gained 5.43 per cent yesterday on the back of the new policy.