Concept note on secondary copper smelter in Saudi Arabia.

1.0 Introduction Proposal envisages setting up a Copper Smelter with Copper waste and scrap as the raw material in two phases Phase I and Phase II. The plant will graduate progressively into a cluster in Phase III using profits from the initial seed investment of around 120 illion. The initial seed capital would !e used to set up a "0#000 t per year of copper smelting# refining and CC $od plant unit. The plant would !e supplemented !y more plants to produce value added products with glo!al mar%et in focus. &vaila!ility of scrap 'Saudi &ra!ia and other gulf countries( is very good. Plenty of scrap of various grades availa!le is e)ported which are !eing recycled overseas# This scrap can !e utili*ed for producing + , -rade Copper and related downstream products. This site can !e developed as a cluster for production of semis 'li%e .rass sheet(. Ca!les# agnet wires. Tu!es etc. for international mar%et in Phase III. The technologies are well proven and e)pertise is availa!le for setting up the plant and operating the same efficiently. 2.0 Raw Materials The raw materials shall !e Copper scrap of various grades# .lister copper from Primary smelters. Copper .lister from Congo and other copper !earing materials. There would !e a provision to add another special smelting unit to produce .lister from very low grade materials containing around /0 0 Copper# the limit !eing differential !etween cost and discount. $aw aterial for Phase I

$aw material for Phase I would !e essentially metallic scarp sourced from iddle ,ast and surrounding countries. The scrap after grading would !e purchased 'or graded after receipt !y a scrap sorter to !e installed in Phase II( and would !e processed as under1 The higher grades of scrap would !e melted in CC $od Plant directly in a melting furnace. &fter melting this metal would !e refined in the same furnace through an o)idation reduction cycle where most of the impurities are removed. The metal would !e cast# rolled and pic%led in a Continuous $od Plant. &fter production# typically 2 mm rod would !e coiled in coils of weights a!ove 2 t and sold to wire drawing mills which produce coarser wires. The lower grade raw materials would !e melted and cast in the form of anodes after preliminary refining# these anodes are then electro refined to produce + , -rade & Cathodes. In addition to scrap# we would !e a!le to use materials li%e .lister from Primary smelters# .lister from Congo and other dirty metallic materials. The process recovers -old# Silver# 3ic%el etc. present in the feed in various sala!le forms. aterials for Phase II

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Phase II involves one more !ac%ward stage of smelting and refining in another specially designed furnace. 4ith this additional furnace the system would !e a!le to use a lower grade of raw materials with high impurity contents and still produce + , -rade & Cathodes.

$aw materials for Phase II would include# !esides those indicated in phase I the following

a( !( c( d( e( f( g(

5)ide concentrates Secondary materials from Primary smelters Copper !earing residues from +ead and 6inc Smelter Irony copper scrap '+i%e fractional 7orse power electric otors( Spent catalysts containing copper 8irty Copper !earing materials li%e ,TP Ca%es with copper ,lectronic Scrap

Specially# ,lectronic scrap is getting a ma9or source for various metals li%e -old# Silver and other precious metals. There is a disposal pro!lem for electronic scrap. Conse:uently the company can get a lead over others in gaining e)perience and gain ;early !ird< !enefits. 3.0 Market for products In the initial stage# till Phase III is planned and implemented# we will have to mar%et the following products1 a( !( Cathodes 4ire rods

There is an e)cellent demand for !oth these products in Saudi and 4orld over and no pro!lem is envisaged in selling these items. !.0 Capital Costs The !all par% figures for capital costs are as under1 a( Phase I !( Copper CC $od Plant '100#000 t=year( > 20 illion ?S@ Copper smelting plant and $efinery '"0#000 t=year( > 100 illion ?S @ Phase II Smelting furnace for residues and -as Cleaning etc. > A0 illion ?S@

Phase III estimates are depended upon mar%et demand and supply and needs to !e wor%ed out after identifying specific needs of the mar%et and value addition= margins. ".0 #usiness model and profitability The !usiness model would involve sale of Cathodes at a premium to + , Cathode price. ,mphasis would !e on :uality and relia!ility $aw material procurement would form a ma9or section of operation and would !e operated as a separate S.?. The prices of finished products are decided !y + , or Come). The premium on these prices depend upon :uality. Since we plan to go for state of art plants# the :uality would !e e)cellent and we should !e a!le to command a very good premium.

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aterial Costs

The raw materials are sourced from Saudi &ra!ia and neigh!oring countries. Since there would !e no

transporation costs the raw material is e)pected to !e much lower than what other secondary smeters pay for the same material. The starting point of a feasi!ility study would involve the prices of scraps and wastes as lin%ed to + ,. 5perating costs The cost of operation in a comparison to similar plants overseas would !e much lower due to the following reasons. a. ,nergy prices are very low this is essentially an energy intensive operation. !. Capital costs are low due to lac% of -ov. Ta)es c. +a!or costs would !e low per unit of productivity 'due to medium 5utput per men shift coupled with low manpower costs( d. +ow wor%ing capital costs. Profita!ility ?nless more detailed specifics are %nown# it would !e difficult to wor% out the profita!ility. 7owever# the set up has tremendous competitive advantage over plants operating overseasand hence has a case for detailed study# ".0 Conclusion The proposed copper smelter at Saudi &ra!ia could add considera!le value to the industry glo!ally at large and Saudi &ra!ia in particular due to easy availa!ility of raw materials# low cost of energy as well as la!or and wor%ing capital. The set up could start as a recycling plant which could grow into a large comple) manufacturing semis on a glo!al scale.

Copper Cluster $ Conceptual %lowc&art

Scrap Sorter

7igh -rade S crap

edium -rade Scrap

+ow -rade Scrap

SmeltingB C onverting Curnace Blister elting and $efining elting B $efining elting B $efining

&node Casting

&node Casting

Anodes

Anodes

,lectrorefining

Cathodes

CC$ od plant

Tu!e ill Phase I Phase II

CCRods

C opper Tubes

Phase III

C ables

Winding Wires

Telecomm C ables