Oct 21 (Reuters) - Shandong Fangyuan Nonferrous Metals Group, China's biggest private-sector copper smelter by capacity, has fired up its 300,000 tonnes per year refined copper production line after a long shutdown, three sources with knowledge of the matter said.

The restart of a significant chunk of smelting capacity comes as copper smelters and miners prepare for negotiations on treatment and refining charges (TC/RCs) for 2022. Greater operational smelting capacity means higher demand for copper concentrate, which pushes TC/RCs lower.

The line was switched on on Wednesday, the sources said on Thursday, declining to be identified as Fangyuan has not yet announced the development. Two of the sources said Fangyuan planned to produce refined copper from the restarted line next month, while the third said the ramp-up would depend on funding.

Fangyuan declined to comment on Thursday.

The company, in eastern China's Shandong province, can produce 700,000 tonnes per year of refined copper, or around 3% of global output. However, it has recently only been operating its other 400,000 tonne production line, at a relatively low rate, after encountering liquidity problems https://www.nasdaq.com/articles/china-copper-smelter-shandong-fangyuan-denies-bankruptcy-speculation-2019-12-12 in 2019.

A supply chain tie-up with state-controlled Xiamen ITG Group Corp is aimed at turning the smelter's fortunes around. (Reporting by Tom Daly Editing by Mark Potter)