Pan Pacific Copper Gains Higher Treatment/Refining Charge

Japanese copper smelters concluded copper ore purchase price negotiation with major offshore miners for 2011 shipment. Pan Pacific Copper agreed with Freeport McMoRan Copper & Gold of USA to increase the smelter’s treatment and refining charge by 20% for 2011-2012 shipment from 2010-2011 shipment. The firm agreed with BHP Billiton of Australia to increase the charge by 50% for half year term.

Pan Pacific Copper agreed with Freeport McMoRan Copper & Gold, which has Grasberg mine in Indonesia, to increase the charge to US$ 56 per tonne for treatment charge and 5.6 US cents per pound for refining charge for 2011-2012 shipment. The total charge of US$ 317 per tonne is 20% higher than total US$ 263 settled a year ago.

Pan Pacific Copper already agreed with BHP Billiton, which has controlling share in Escondida mine of Chile, to increase the charge to US$ 70 per tonne for treatment charge and to 7 US cents per pound for refining charge for half year term totaling US$ 396 per tonne of charge. The half year term allowed the smelter to get better charge than charge with other miners.

Pan Pacific Copper also got US$ 80 per tonne for treatment charge and 8 US cents per pound for refining charge totaling US$ 453 per tonne of charge with other miner in South America.

The smelter can get only around 5% of around US$ 10,000 per tonne of copper ingot price. Despite of the higher charge for smelters, the miners control major part of the value for the copper chain.