Mitsubishi Materials to cut primary copper smelting volume by 30% to 40% by 2035

By Yuka Obayashi

TOKYO, Nov 26 (Reuters) - Japan's Mitsubishi Materials 5711.T plans to cut its primary copper smelting volume by 30-40% by the 2035 financial year as it shifts toward secondary smelting to improve profitability, it said on Wednesday.

Japanese copper smelters are grappling with tumbling treatment and refining charges (TC/RCs) and shrinking smelting margins due to tight concentrate supply and expanding smelting capacity in China.

Mitsubishi Materials said in October that it would reduce refined copper output at its Onahama Smelter & Refinery by a quarter year-on-year in the October-March period.

It also plans to integrate its copper concentrates procurement and copper product sales with domestic rival Pan Pacific Copper, which is owned by JX Advanced Metals 5016.T, Mitsui Mining and Smelting 5706.T and Marubeni 8002.T.

Announcing a new 3-year business plan starting from April, Mitsubishi Materials said it will shift its primary copper operations to secondary smelting using electronic waste and will explore building new secondary smelters in Europe and the United States to drive growth.

Secondary smelting produces copper from recycled materials rather than mined ore.

"The current low TC/RCs are expected to persist, making the shift to profitable e-scrap processing essential for our sustainable growth," President Tetsuya Tanaka told a news conference. E-scrap refers to electronic waste such as discarded computers, smartphones and home appliances.

"We'll rapidly shift our focus from quantity to quality, transitioning our revenue structure from copper concentrate processing to secondary smelting and optimising production systems and our business portfolio," he said.

The company aims to double secondary smelting capacity by 2035, but its refined copper output will fall by 20-30% from the current annual level of around 400,000 metric tons due to reduced primary smelting, Tanaka said.

Mitsubishi Materials will also accelerate the global expansion of its tungsten business, expanding recycling capacity in Europe and building new U.S. recycling sites for the rare metal, used in batteries and defence.

"By achieving a 100% recycled material rate at our tungsten manufacturing sites outside China by 2030, we'll meet rising demand while enhancing profitability," Tanaka said.