COMMUNIST CHINA: PROGRESS IN COPPER

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001700010078-3
• Release Decision: RIPPUB
• Original Classification: T
• Document Page Count: 14
• Document Creation Date: December 21, 2016
• Document Release Date: February 25, 2004
• Sequence Number: 78
• Publication Date: April 30, 1998
• Content Type: IM

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Top Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
Communist China: Progress In Copper
Top Secret
ER IM 71-126
July 1971
Copy No.
52
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CENTRAL INTELLIGENCE AGENCY
Directorate of Intelligence
July 1971
INTELLIGENCE MEMORANDUM
COMMUNIST CI-IINA: PROGRESS IN COPPER
Summary
1. Communist China has made impressive strides in building up the
productive capacity and output of copper, a key material in hundreds of
industrial and military uses. Domestic production of refined copper is
estimated at 280,000 tons in 1970, or about one-seventh of US production,
one-fourth of Soviet production, and two-fifths of Japanese production.
Domestic production is supplemented by annual imports of more than
100,000 tons, mainly from Zambia and Chile. Continued progress in the
technology of alloying copper and fabricating copper products has resulted
from the accumulation of domestic experience and from the import of
Western materials and technology.
2. In any industrializing nation, the demand for copper increases
at a much faster pace than general economic activity. In China, the
importance of the electrification and modern weapons programs intensify
this pressure on copper supplies. Campaigns for the careful recovery of
copper scrap and the substitution of other materials for copper are two
indicators of a marked tightness in supply, which the large increases in
production and imports have not eliminated. Prospects for 1971-75 are for
further substantial increases in domestic capacity and output of copper and
for increases in imports depending on the general availability of foreign
exchange. Demands by users almost certainly will continue to press against
the increased supply.
Note: This memorandum was prepared by the Of'ice of Eco)iomic Research
and coordinated within C/A.
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Introduction
3. Communist China is experiencing the disproportionate demand
for copper typical of newly industrializing, newly electrifying nations. This
demand is further intensified by China's vigorous efforts to build a modern
military establishment. The result has been a rapid increase of both domestic
production and imports of copper in the I960s. Long-term projects for
the construction of mining, smelting, and refining facilities were initiated
and carried on even during the Cultural Revolution. With the return of
more systematic planning in 1970 and the announcement of a new economic
plan for 1971-75, investment in the copper industry is being pushed even
more strongly to meet ever rising industrial and military demands.
4. This memorandum presents estimates of China's total copper
supply in 1952-70, including domestic production and imports. It describes
the allocation pattern for China's supplies of copper and copper alloys and 25X1
attempts to project the supply situation for 1971-75. The memorandum
indicates a considerably larger increase in China's supply
of copper than was judged in previous estimates.
Discussion
Copper as a Key Industrial Material
5. Copper must be judged an indispensable material to an
industrialized society. Of all commercial metals, only silver has a greater
ability to carry electric current. And copper's outstanding thermal
conductivity renders it difficult to replace in heat exchangers for heating,
cooling, and refrigeration systems. It is unaffected by a magnetic
environment and highly resistant to damage by corrosion. An exposed
copper surface quickly oxidizes forming a thin tarnish which protects the
metal from deeper damage, an important property for a material used in
ships or plumbing. Copper's strength and machinability make it the best
choice in many structural applications, especially those requiring precision
in shaping, as in gears for wristwatches or valves for fuel systems.
6. These inherent properties of copper have been enhanced by
alloying copper with other metals. One alloy, free-cutting brass, has been
chosen as the standard for machinability while certain other alloys of copper
are stronger than some steels. Other characteristics that prompt industry
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to use copper and its alloys include resistance to fatigue, abrasion, and
wear; workability; ease of joining and finishing; and superior properties at
cryogenic (ultra-low) temperatures.
7. Copper's distinguishing properties thus make it the first choice
for many important industrial uses. Yet it does not have a monopoly on
these properties. Substitutes can be found for most copper products if
allowances are made for losses in technical efficiency, costs, and quality.
For example, aluminum has 63% of copper's electrical conductivity per
cross-sectional area so that, where bulk is not an inhibiting factor, large
aluminum wires can be used instead of smaller copper ones. On the other
hand, electric motors and generators require copper wire in large quantities
and substitution of other metals has not yet proven practical. Even though
much substitution for copper has taken place in the manufacture of
ammunition, large quantities will continue to be considered a necessary
input. Other metals are seldom substituted for copper in the conductors
used in electronic equipment because the amount of copper required is
not great (heavy currents are seldom employed in electronics), its cost is
low compared with the value of the end item, and the facility with which
small copper conductors can be bent, joined, and plated is superior to that
of other metals. Also one of the most widely used materials for heat
exchangers, copper is difficult to replace in many of its applications.
China's Ore Reserves
8. Total known reserves of copper ore in Communist China are
estimated to be in excess of 6 million tons of recoverable copper. Copper
occurs widely throughout China. The most important known deposits lie
in Yunnan Province in the southwest, Anhwei and Hupeh Provinces in the
Yangtse River Basin, Kansu Province in the northeast, and Kirin and
Liaoning Provinces in Manchuria. The ores being mined range from 0.5%
to 5% copper, with most under 1.0%. Small quantities of silver and gold
often occur with the copper and are recovered in the processing of the
ores.
Production Facilities
9. China's productive capacity in the copper industry has been built
in the last 20 years with the exception of 13,000 to 15,000 tons of capacity
inherited from the pre-Communist era.
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Copper Production
11. Production of refined copper in Communist China has expanded
nearly thirtyfold over the small 1952 base and now amounts to more than
one-quarter of a million tons
Imports
12. Imports of copper rose steeply during the Great Leap Forward
(1958-60), only to fall back to inconsequential amounts in the post-Leap
retrenchment (see the table). In the late 1960s, imports revived with the
biggest jump occurring in 1967-68, a time of falling domestic production
and a new stockpiling program. Imports have subsequently leveled off at
roughly 100,000 tons presumably because the government's policy is to
push domestic production hard while conserving foreign exchange resources.
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producers in the future, but such purchases will not alter China's overall
ability to procure copper. As for exports, China does not export significant
quantities of either refined copper or copper ores.
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Allocation of Copper
15. In spite of the substantial increases in domestic production and
imports, indications are that copper is in unusually tight supply in China.
Copper is one of the leading targets in the public campaigns to collect
more scrap. And several examples of the substitution of other metals for
copper have come to light. For example, small arms ammunition produced
in China will often have cartridge cases of steel whereas normally brass
would be used, and electrical transformers are being made of aluminum.
16. The supply situation has been further tightened by stockpiling.
The growing Soviet threat seems to have led to a national strategic
stockpiling program in 1967-68.
17. From the beginning the government has identified copper as one
of the materials that are critical for industrialization and therefore must
be strictly controlled at the center. The structure of control is similai to
that employed in the USSR, the USSR having helped the Chinese
Communists set up their "command economy" in the 1950s. A Central
Ministry for the Allocation of Materials controls the flows of key materials.
Imports of these materials are brought into the pattern via the Ministry
of Foreign Trade, which has a shopping list based on the need for various
materials. The level of these imports is constrained icy the general availability
of foreign exchange.
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Technological Level
Even though
a few of the copper mines may have up-to-date equipment and methods,
most of the newspaper stories on copper mines imply that the typical mine
employs large gangs of workers with little modern equipment. This squares
with the philosophy Premier Chou En-lai recently expressed to a visiting
Japanese delegation, "In China we have enough hands."
Copper in 1971-75
20. By 1975, domestic production of copper probably will be 100,000
to 150,000 tons above the 1970 level of 280,000 tons. An advance of
100,000 tons could be achieved by the re-activating of the old 10,000-ton
refinery at K'un-ming, the pressing of more output out of existing facilities
and the commissioning of one new large refinery.
21. For the Chinese to raise output by 150,000 tons by 1975, a
second large refinery would seem to be required. The minimum time for
construction of a copper refinery is three years so that a new project would
have to be under way, or about to be launched, if it is to contribute to
production in 1975.
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22. Another consideration in estimating the rate of increase in
domestic production is the relation between the total requirements for
copper and the prospects for imports for copper. Over the next five years,
the government almost certainly will want to hold down imports of copper
as close to the present 100,000-ton level as possible. Increases in exports --
which are the sina qua non of increases in imports so long as the regime
takes a puritanical attitude toward incurring foreign debts - are not likely
to grow rapidly since agriculture is doing well just to feed the additional
population let alone supply more export goods. Moreover, the government
is serious about its emphasis on self-reliance and self-sufficiency in industrial
raw materials, machinery, and technology.
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