Pan Pacific Copper Wins Better TC/RC for 2H 2011

Japanese largest copper smelter, Pan Pacific Copper agreed with BHP Billiton to increase treatment and refining charge by around 30% for July-December from January-June. The smelter won the better margin when international copper ore supply gets loose after the damage outage for some Japanese smelters due to the major earthquake.

The treatment charge is US$ 90 per tonne and the refining charge is 9 US cents per pound for July-December compared with around US$ 70 per tonne and 7 US cents per pound of charges for January-June. The total margin for the smelter increases from US$ 306 per tonne to US$ 509.

Japanese copper ore demand decreased when Pan Pacific Copper and other smelters reduced the operation and the quake stopped operation at Onahama smelter. The ore demand decreases significantly to reduce the ore purchase price level or increase the smelters’ margin.

Japanese smelters and offshore miners usually set the ore purchase condition for 2 years term. However, BHP Billiton set the condition only for half year term at 2010 end talk while Freeport-McMoRan Copper & Gold set total US$ 317 per tonne of margin for 2 years.