There are serious differences between miners and smelters on the cost of copper concentrate processing and refining.

Published: Dec 1, 2020 15:30

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SMM: three sources familiar with the negotiations said that copper miners and smelters will be very late to finalize next year's copper concentrate processing fees, smelters hope to postpone, while miners point to the tight spot market.

The processing and roughing fee (Treatment charges,TCs) and the refining fee ((Refining charges,RCs) are paid by the concentrate seller to the smelter and then deducted from the purchase price paid by the smelter. When concentrate supply falls or demand rises, this cost falls as smelters compete for raw materials.

TC/RCs is suitable for clean, standard grade concentrates.

Annual pricing negotiations between large copper miners and Chinese smelters usually take place in November and will serve as the price benchmark for the coming year.

In 2020, the copper concentrate TC/RCs of Jiangxi Copper and Freeport McMullen was set at US $62 per tonne and 6.2US cents per pound.

Freeport McMullen owns the Grasberg copper mine in Indonesia, which is the second largest copper project in the world.

However, spot roughing fee TCs is currently at an eight-year low of $50.50 a tonne. Once the copper concentrate market tightens, TCs falls. )

A source involved in the negotiations said: "the smelter wants to finalize the roughing fee at more than $60, while the smelter's proposal." It's about fifty-five dollars. "

Another source who works for the miners, who spoke on condition of anonymity, said the difference in roughing fees between the two sides was more than $10.

Chilean miner Antofagasta (Antofagasta) and Freeport are usually the first copper miners to finalise processing fees.

However, according to a third source involved in the negotiations, the problem facing Freeport is that the fluorine content in the copper concentrate produced by the Grasberg copper mine may exceed the maximum limit of 0.1 per cent allowed in China.

"the Grasberg project has higher production, but the concentrate also has a high fluorine content," the source said.

He added: "Chemical impurities basically limit shipments of the Grasberg copper mine, putting them at a disadvantage in the negotiations."

Freeport didn't respond to requests for comment.

The Grasberg copper project is shifting from open-pit mining to underground mining.

Tony Wenas, chief executive of Freeport Indonesia, said in June that daily production of copper concentrate would be 160000 tons in 2021.

Warm Tip: once the result of TC negotiation of long order processing fee between mining enterprises and smelter is landed, SMM will be released as soon as possible! Please follow ~

Processing fees copper smelting mining

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