The Shanghai Gold Exchange is set to launch a gold trading platform in the city’s free trade zone (FTZ) open to foreign investors. Rules on the gold exchange’s international board are being reviewed by the People’s Bank of China (PBOC) and the State Administration of Foreign Exchange (SAFE), and an imminent approval is expected, according to exchange officials. The platform, likely to get under way in the second half of this year, will mark a major breakthrough in the development of the FTZ. The trading platform and the warehouse will be run separately from the existing trading system in Shanghai’s downtown Huangpu district, and the products will be denominated in yuan, part of Beijing’s efforts to internationalize the currency. Spot and forward gold trading will be conducted on the international board and a large turnover is expected. Domestic individual investors would not be allowed access initially. China became the world’s largest gold consumer last year, overtaking India, after large falls in global prices prompted bargain hunting across the country. Domestic gold consumption reached 1,176.4 tons last year, up 41.4% from 2012. The country produced 428.1 tons of gold last year, remaining the top gold producer for a seventh consecutive year.

Aluminum Corp of China (Chalco) posted a net profit of CNY975.2 million for last year, reversing an CNY8.2 billion loss the previous year, mainly due to asset disposals, including a stake in a bauxite project in Guinea. The firm also cautioned that smelters in the central and eastern regions of China might be squeezed out of the market by more competitive plants in western areas. Smelters would continue to cut output amid low aluminum prices, which favors smelters in the west with lower energy costs. The operating loss of its alumina operation narrowed by 52% to CNY1.8 billion and that of its aluminum operation shrank 9.5% to CNY27.9 billion. Inventory write-down fell to CNY1.38 billion from CNY1.4 billion in 2012. Chalco said it aimed to turn around its loss-making units this year by “phasing out, restructuring, transferring and digesting” them, without giving details. Output of aluminum fell 9% last year to 3.84 million tons, while that of alumina grew 2% to 12.1 million tons and that of bauxite rose 14.4% to 16.2 million tons.

Chinese state-owned MCC has been renegotiating a huge copper contract with the Afghan government to reduce its exposure to the country in a move that threatens Kabul’s plans to use revenue generated by its mineral resources to bankroll development. MCC has a USD3 billion deal to mine and process copper south of Kabul. With copper prices falling and the Chinese economy slowing, and security in Afghanistan deteriorating, the company has yet to begin production on the site and, according to mining industry and other sources, no longer wants to abide by the terms of the contract it signed in 2007. The company wanted to renege on building a railway, power plant and processing factory, as stipulated in its deal to mine at Mes Aynak, site of one of the world’s biggest copper deposits, the sources said. MCC also wanted to renege on paying the remainder of a bonus worth USD808 million to the Kabul government, having already paid USD133 million, one source close to the Afghan Ministry of Mines said. It also wanted to cut the royalty payments, currently set at 19.5%, about double the worldwide average. Mining industry executives and sources close to the Afghan government said that MCC was in a position to dictate terms, having secured a 30-year lease on the mine, which contains 5.5 million tons of high-grade copper ore. “The Chinese have the mine, they can hold it for as long as they want,” said Javed Noorani of think tank Integrity Watch Afghanistan. “As long as it is not viable, or the security situation is not favorable, they see no point in doing anything there.” MCC said it would not proceed with the processing plant because it could not source phosphate locally. Phosphate is essential to the refining process. Instead, MCC said it wanted to recruit locals to build roads so the ore could be trucked overland to China for processing. As MCC seeks to shelve much of the Mes Aynak deal, it also threatens a USD10.8 billion deal with an India-backed consortium to mine iron ore in the central highlands of Bamiyan province, the South China Morning Post reports.

Valin ArcelorMittal Automotive Steel Co (VAMA), a 51-49 joint venture between Valin Steel Co in Hunan and ArcelorMittal, debuted its lightweight automotive project “S-in motion” in China－a series of solutions to optimize the body weight of cars, while ensuring continued high-safety standards and increased levels of energy efficiency. With rapid growth in China’s automotive market, demand for automotive steel－particularly high-end products－continues to rise. However, domestic manufacturers can only supply steel with strength up to 1000 MPa, and China’s automakers are dependent upon imported very-high-strength steel above 1000 MPa, as well as Usibor steel. In recent years, China imported 1.5 million to 2 million tons of automotive steel annually. VAMA aims to replace the imported products demanded by the local market. “We are very confident in our ability to turn VAMA into a premier automotive steel manufacturer in China,” said Sanjay Sharma, CEO of VAMA. Through involvement in the early stages of automotive design, VAMA hopes to be able to offer product customization. The company plans to adopt ArcelorMittal’s most advanced third-generation automotive steel production standards. The “S-in motion” project integrates more than 60 diverse solutions, including press hardened steel and advanced high strength steel. “S-in motion” also includes body-in-white, door and chassis solutions based on cutting-edge laser welded blank and hot stamping technology so as to minimize vehicle weight and reduce energy consumption. “S-in motion” reduces the weight of 43 auto parts in a typical C-class vehicle to achieve a total weight reduction of about 19% compared to conventional technology and cut down carbon emissions by 14% in the entire life-cycle of a vehicle, the China Daily reports.

Policymakers have again promised to make it easier for steel mills to merge and consolidate, but they appear to have ditched a long-standing target to bring 60% of the sector under the control of its 10 biggest enterprises by 2015. A new industry consolidation plan published by the Ministry of Industry and Information Technology (MIIT) said authorities would continue to simplify approval procedures and make it easier for firms in sectors like steel, cement and aluminum to finance acquisitions. But the plan did not include the target, last mentioned in official documents in January last year, to put 60% of the country’s steel production capacity in the hands of its top 10 mills by 2015, up from about 40%. The target was part of a state strategy to help state-owned steel firms become more competitive by encouraging them to swallow smaller rivals, and led to a series of high-profile mergers in the sector, but the approach has been heavily criticized within the industry, with big firms increasingly reluctant to take on more unprofitable capacity. The focus on size rather than efficiency encouraged smaller private players, backed by local governments, to expand quickly to avoid being taken over by bigger rivals, worsening the supply glut and further eroding sector profit margins.