Canadian mining company Teck Resources has reached an agreement with Korea Zinc to pay $165 per metric ton, marking a three-year low, for the conversion of its zinc concentrate into refined metal, as reported by two sources familiar with the situation.
These fees, known as treatment charges (TCs), are paid by miners to smelters for processing raw materials into zinc metals. When mine production decreases, smelters must compete for concentrate, resulting in a decline in these charges.
Korea Zinc opted not to provide a comment on the matter, while Teck Resources stated that it refrains from commenting on commercial negotiations.
Teck and Korea Zinc are prominent entities in the zinc market, particularly in the production of zinc utilized for galvanizing steel in the construction sector. Their annual agreement on processing charges, which miners pay to smelters for supply from Teck’s Red Dog mine in Alaska, often serves as an industry benchmark.
The fee agreed upon by Teck and Korea Zinc has decreased by 40% from $274 per ton last year, representing the lowest level since 2021.
The downturn in zinc prices in recent months has led to mine closures, including operations such as Boliden’s Tara mine in Ireland and Glencore’s McArthur River zinc and lead mine in Australia, which suspended activities due to severe weather conditions.
Korea Zinc, recognized as the world’s largest producer of zinc and lead, procures concentrate in bulk for a group of smelters, including the Seokpo facility operated by Young Poong Corp, this year.