UPDATE 2-China to scrap taxes on re-export of some metals

(Recasts, adds comments)

By Polly Yam

HONG KONG, Jan 5 (Reuters) - China will eliminate taxes on imports of copper, nickel and cobalt concentrate, as well as on exports of the finished metals and aluminium products, from Feb. 1, in a move that promises to boost the country's metals exports.

China, the world's top consumer of copper and aluminium, will reverse a two-year old policy of taxing these flows, in a bid to spur domestic demand, analysts and smelter officials said on Monday.

The policy will allow selected smelters, such as Jiangxi Copper (0358.HK) (600362.SS), to import concentrates duty-free as long as they export the finished product.

Copper and nickel concentrate imports are currently subject to a 17 percent value-added tax, and exports of refined copper and unwrought nickel are taxed at 10 percent and 15 percent respectively.

China will allow duty-free exports of refined copper, unwrought nickel, semi-finished aluminium products such as profiles, rods, bars and billets, and cobalt powder, the Ministry of Commerce said on its website (www.mofcom.gov.cn).

"The policy is reflecting the year-long request by smelters," said Yang Changhua at Antaike, a state-owned research group in Beijing.

"It would help smelters that currently import concentrates and sell the finished metal at below-cost prices at home."