March 3, 2020 / 11:55 AM / in a month

UPDATE 1-China's Western Mining has force majeure application accepted

* Group’s Qinghai Copper unit has application accepted - official

* Would be 2nd Chinese smelter to declare force majeure amid virus (Adds background, request for comment)

By Tom Daly

BEIJING, March 3 (Reuters) - A copper smelting arm of China’s Western Mining has had its application for a force majeure certificate accepted after operations were affected by the coronavirus outbreak, an official from a regional trade body said on Tuesday.

Qinghai Copper, a wholly owned subsidiary of Western Mining in northwest China’s Qinghai province, is one of three Qinghai firms so far to have a force majeure application approved by the China Council for the Promotion of International Trade (CCPIT), an official from council’s Qinghai branch said.

The CCPIT had issued over 4,000 certificates to Chinese companies affected by the virus who are seeking to invoke force majeure - a clause which allows companies to suspend their obligation to fulfil contracts after unexpected events such as strikes and natural disasters.

It was not immediately clear which aspect of its business Qinghai Copper, which sources most of its concentrate supply from Western Mining’s copper mine in Tibet, was looking to declare force majeure on.

It would be the second copper smelter in China, the world’s biggest consumer of the metal, to declare force majeure after Guangxi Nanguo in southwest China made the move last month due to an inability to take delivery of concentrate.

Western Mining did not immediately respond to a request for comment on whether it would go ahead and declare force majeure.

Local media reported last month that Western Mining and Qinghai Copper were among four Qinghai companies to apply for the certificate as the coronavirus epidemic, which has killed more than 3,000 people globally, caused logistical problems and delayed firms’ return to work after the Lunar New Year holiday.

The CCPIT Qinghai official said earlier Western Mining and Qinghai Copper had made one joint application.

Western Mining, an integrated metals producer that operates both mines and smelters, has 160,000 tonnes of annual copper smelting capacity, the first 100,000 tonnes of which were only launched in 2018.

The group also has capacity to produce 100,000 tonnes per year of both refined zinc and lead, according to its website. (Reporting by Tom Daly; Editing by Louise Heavens and David Evans)

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