Chilean mining company Antofagasta and China’s Jiangxi Copper have reached an agreement to lower copper concentrate processing fees for 2025. Sources familiar with the matter reported that the treatment and refining charges (TC/RCs) will be set at $21.25 per ton and 2.125 cents per pound, marking a substantial decrease of 73.4% from the $80/8 cents industry benchmark established for 2024.
Key Highlights:
Significant Fee Reduction:
The agreed TC/RCs represent a dramatic drop, reflecting growing concerns regarding the availability of copper concentrate in the spot market for 2025.
Market Context:
Antofagasta declined to comment on the agreement, while Jiangxi Copper was not immediately available for a statement. The TC/RCs are crucial for smelters, serving as a primary revenue source when miners sell their semi-processed ore for refining.
Supply Dynamics:
Typically, TC/RCs decrease when ore supply is limited and increase when there is ample concentrate available. This year’s tight copper concentrate supply has been attributed to unexpected disruptions in mining operations and increasing smelting capacity.
Industry Benchmark:
The agreement is significant as it sets a precedent for fees among other industry players. Historically, agreements between global copper miners and Chinese smelters have established benchmarks for processing fees.
Future Negotiations:
Other Chinese smelters are reportedly open to negotiating their fees, with slight variations from the agreement reached between Antofagasta and Jiangxi.
Projected Supply Deficit:
Analysts at Benchmark Mineral Intelligence (BMI) predict that the copper concentrate deficit will widen to 950,000 tons in 2025, up from just 1,600 tons in 2024, indicating a tightening market.