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Paranapanema aims to up copper output to boost market share in Brazil

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Brazilian refined copper producer Paranapanema aims to increase output in a bid to to reduce Brazil’s dependence on imported raw materials.

“Brazil has the chance to become a great player in the future,” Paranapanema president Luiz Antonio Ferraz Jr told Metal Bulletin.

He believes foreign companies are able to take advantage of tax benefits in Brazil.

The country currently imports more than $1.8 billion of copper concentrates each year, with more than 70% coming from Chile. “I want that money to be spent locally,” said Ferraz.

Brazil ranks 19th in the world’s largest copper producers. Paranapanema currently produces 98% of the country’s refined copper and about 60% of its output is sold on the domestic market, giving it a market share of about 38%. The remaining 40% is exported.

According to a study released by the Brazilian ministry of mines and energy, the country has reserves of 21.7 million tonnes of copper.

At the beginning of 2011, the company unveiled a 505 million Reais ($ 272.7 million) investment plan for 2012, aimed at expanding its market-share. 

The objective is to raise installed capacity of refined copper output to 280,000 tpy by 2013 from the current 230,000 tpy.

Part of the investment has been channelled into the company´s copper smelter in Bahia, which is expected to be operating at full capacity in May.

Another hot rolled copper unit is also planned for the state of Espírito Santo.

The company also plans to invest in small and medium mining deposits with lower operational costs.

However, the expansion of Paranapanema’s cold rolled copper unit in Sao Paulo, initially planned for this year facing a slight delay.

“We just postponed the expansion project of rolled products in Sao Paulo to 2013, but it is not a significant delay,” said Ferraz Jr.

Paranapanema produced about 212,000 tonnes of refined copper in 2011, down 5.8% from 2010.

The company´s investment comes from its own assets, as well as special financing provided by institutions including Brazil’s social development bank, BNDES. 

Key facts: Grupo Paranapanema

  • Established: 1961
  • Refined copper output: 212,000 tonnes
  • Revenue in 2011: 4.09 billion Reais ($2.2 billion)
  • Loss in 2011: 47.7 million Reais ($25.7 million)
  • Plants: Dias D’Ávila (primary copper) in Bahia state; Utinga and Capuava in Sao Paulo; and Serra (semi-manufactured copper products) in Espírito Santo state
  • Brands and subsidaries: Eluma, Caraíba Incorporated, Caraíba Energia, CDPC (distribution), Cibrafértil (fertilizers), Paraibuna Agropecuária, PMA Minerals, PMA Importadora e Exportadora e PMA Empreendimentos Imobiliários
  • Employees: 2,245 (2011)

Carolina Guerra
cguerra@metalbulletin.com
Twitter: @cguerra_mb


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