Japan Copper Smelter Wins Better Ore Purchase Condition

Mitsubishi Materials said on Tuesday the firm agreed with Freeport-McMoran Copper & Gold to improve the ore purchase condition by around 70% for 2009-2010 shipment compared with previous condition. The annual major negotiation is getting to settle for smelters under oversupply of copper ore.

Mitsubishi Materials rejected to reveal the detail. However, the treatment charge and refining charge, which was US$ 45 per tonne and 4.5 US cents per pound respectively for 2008-2009 shipment, apparently increases to US$ 75 and 7.5 US cents for 2009-2010. The improvement is the first time since mid-year negotiation in 2005, when the treatment charge was US$ 112.5 and the refining charge was 11.25 US cents.

The new condition represents 19.3 US cents per pound of processing charge when the smelter can earn 96.5% from copper concentrate with 30% of purity. The smelter pays 120.7 US cents for miners when copper ingot price is 140 US cents.

The copper ore purchase condition was less than US$ 45 per tonne for treatment charge and 4.5 US cents per pound for refining charge at negotiation in mid-2008 under tight supply for ore due to strong demand for China and India.