China's domestic antimony prices are being driven up by rumours that Hunan province will force antimony miners to consolidate in the wake of the Hsikwangshan Twinkling Star accident in early October.
Grade II antimony in the Chinese free market was quoted at 42,000-43,700 yuan ($6,151-6,400) per tonne this week.
"The prices are going up these days, and most of the offers have settled above 43,000 yuan per tonne," said an analyst at Minmetals in Beijing.
Hunan's provincial government may try to restructure antimony mining in the area by reducing the number of companies in operation from 80 to just six through mergers and shutdowns of smaller producers, sources said.
Twenty-six miners died earlier this month when their transport cage plunged down a mineshaft, an accident that once again highlighted dangerous conditions in China's mining sector.
The provincial government wants fewer and bigger companies to ensure mine safety can be monitored more effectively, source said.
"Once the government meddles with the accident [investigations], the nearby smaller miners may be asked to shut down for safety reasons," said an analyst from a Securities Company in Shanghai.
Market participants did not know when Twinkling Star would resume production, and the company could not be contacted.
"Definitely, the accident will cause output losses for Twinkling Star, but what's worse, it will spread supply concerns all over Hunan province and the country as a whole," he added.
Hsikwangshan is a subsidiary of Hunan Nonferrous and is also the top antimony producer in the world.
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"We have no idea when the mine will resume operation in Hsikwangshan Twinkling Star, but it will for sure take some time," said a Chinese trader, adding that prices would likely rise further.
Published by samjiefu@gmail.com
"Antimony prices were already in line with other non-ferrous metals and the strong performance of gold, which began to surge even before October," she said.
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