LONDON Maike Metals Group and Jinchuan Group Co. Ltd. have established a framework agreement for a metals trading joint venture.
The trading company, which likely will be based in Shanghai, is expected to trade nickel and 2 million tonnes of copper per year both inside and outside China.
The joint venture, capitalized with 1 billion yuan ($160 million), will be an independently operated, international trading company, and wont affect Maikes current 1 million tonnes in annual copper trading, Maike Metals chairman Jinbi He told AMM sister publication Metal Bulletin Thursday.
"The senior executives of both companies have reached a consensus to expand both companies resources, presence and market share and status in China," He said.
The registration of the company, which hasnt yet been named, should be completed by year-end.
The new venture between Jinchuan, which has the capacity to produce around 150,000 tonnes of nickel and 600,000 tonnes of copper annually, and Maike will source nickel and copper from outside the country.
The ventures significant ambitions in copper will be outstripped by those in the nickel market, according to He. "Simultaneously, the joint venture will have an even bigger impact on the nickel market," said He, whose Xian-based metals group spans aluminum and copper refining, physical base metals, steel and futures trading. The company also plans to establish a commodities exchange.
There has been no decision yet on how the companys ownership will be split.
"Currently, both parties are concentrated on the initial preparations," He said. "In due course, it will focus on business developments and investments in international mining resources."
A version of this article was first published by AMM sister publication Metal Bulletin.