| HONG KONG
HONG KONG Aug 23 Jiangxi Copper Co Ltd
, the top producer of the metal in China,
has set up a wholly owned subsidiary in Hong Kong to reduce
financing costs for imports and potential acquisitions, company
spokesman Pan Qifang said on Thursday.
Jiangxi Copper Hong Kong Co Ltd would finance the company's
imports of copper concentrate, trade in metals and acquisitions
of resources in the global market, Pan said.
"It is cheaper to borrow dollars in Hong Kong than in the
mainland," he said, adding that the time needed for trade and
project financing in Hong Kong was shorter.
Financial Controller Gan Chengjiu said in March that Jiangxi
Copper planned to increase imports of copper concentrate this
year by 13 percent to 1.02 million tonnes, from about 900,000
tonnes last year.
Jiangxi Copper previously processed the bulk of its copper
concentrate financing via its headquarters in Guixi city in the
southeastern province of Jiangxi and its metal trade through
Jiangxi Copper International Trading Co Ltd set up last year in
Shanghai, he said.
Companies in China typically require weeks to process dollar
loans for imports as the yuan is not fully convertible and the
government restricts currency outflows.
In Hong Kong, borrowing rates for the dollar are typically
set between banks and borrowers. An executive at an
international trading firm said local banks offered about 2-3
percent on copper trade financing for 1-2 months, with
documentation including a bill of lading and warrant that
confirms the location of the copper.
A senior executive at a large metals trading company in
Shanghai said mainland banks offered about 3-4 percent above
Libor for dollar loans.
(Editing by Chris Lewis)