The sagging Chinese nonferrous metals industry could be revitalised under a three-year plan that aims to help it overcome the effects of the global economic downturn.

The plan, released by the Chinese Government, calls for consolidation and restructuring among nonferrous metal companies and technology innovation in the industry to achieve sustainable development by 2011.

The government plans to create new nonferrous metals corporations that can benefit from the latest production facilities through consolidation.

According to the plan, it will also encourage companies investing in exploration of nonferrous metals, especially in overseas operations.

China’s top ten domestic companies will be responsible for producing 90% of the country’s copper, 70% of aluminium, 60% of lead and 60% of zinc.

Obsolete smelting operations, however, will be shut. China plans to close down 300,000 tons of copper smelting capacity, 400,000 tons zinc and 600,000 tons lead and aims to increae this to electrolytic aluminium (800,000 tons) by 2010.

New projects to develop electrolytic aluminium will not be permitted until 2012 and about 800,000 tons capacity will be closed.

China plans to save 1.7 million tons of coal and 6 billion kWh of electricity annually and reduce sulphur dioxide by 850,000 tons every year.

The industry’s profit fell 45% to $11.73bn in 2008, according to China Nonferrous Metals Industry Association estimates.