HONG KONG, 10 June, 2012 – The Hong Kong Mercantile Exchange (HKMEx), China’s global marketplace, today signed a memorandum of understanding (MOU) with Jiangxi Copper Corporation (Jiangxi Copper), the largest copper producer in China, to jointly promote base metals trading and help establish benchmark pricing in Asia.
Under the terms of the MOU, Jiangxi Copper will become an HKMEx Industry Associate and, together with its subsidiaries, use the Exchange’s state-of-the-art commodity futures trading platform for the hedging and physical delivery of their precious and base metal products. Meanwhile, HKMEx will support Jiangxi Copper’s competitive positioning in the international base metals market by leveraging its extensive global contacts. HKMEx and Jiangxi Copper will also cooperate on training and further explore mutually-beneficial business opportunities.
The MOU was signed by HKMEx Chairman Barry Cheung and Jiangxi Copper President Li Yihuang at a ceremony held during the Jiangxi-Hong Kong Investment Promotion Week. The signing was witnessed by Lu Xinshe, governor of Jiangxi Province; Hong Lihe, vice-governor of Jiangxi Province; and officials from various departments of the Jiangxi provincial government.
“HKMEx is strategically located to help develop China as the centre of world copper trading, as well as to establish benchmark pricing of the industrial metal that will truly reflect the supply and demand conditions in Asia. We believe the MOU signed today with HKMEx will help Jiangxi Copper raise its competitive edge as we continue to further expand into the global marketplace,” said Jiangxi Copper’s Mr Li.
HKMEx’s Mr Cheung said, “HKMEx is honored to have Jiangxi Copper as its first Industry Associate. We are excited to have the support and participation of China’s largest copper producer as a partner in jointly developing metal futures trading in mainland China and beyond.”
“Partnering with a leading mainland commodity producer like Jiangxi Copper adds a new, important dimension to HKMEx’s strategic development. This MOU enables the two parties to leverage on each other’s competitive strengths, further deepening market liquidity in Greater China and facilitating benchmark pricing in Asia,” said Wang Lili, Senior Executive Vice President of ICBC - a core shareholder of HKMEx.
Jiangxi Copper is China’s largest copper producer and one of the world’s biggest and most advanced copper mining enterprises. In addition to its operations in copper mining, milling, smelting and refining, Jiangxi Copper is also a major producer of precious metals including gold and silver, as well as sulphide chemicals.
HKMEx currently offers a 32 troy ounces (1 kilo) gold futures contract and a 1,000 troy ounces silver futures contract. Both are denominated in US dollars with physical delivery in Hong Kong. Going forward, the Exchange plans to launch gold and copper contracts denominated in renminbi, followed by other products in precious and base metals, as well as energy, agriculture, and commodity indices.