London 05/05/2016 - Teck Resources has concluded initial annual deals with some Chinese smelters for the supply of low-silver lead concentrates from its Red Dog mine in Alaska with treatment charges (TCs) of around $130-140 per tonne, several well-informed sources said.
The agreement is believed not to include lead base prices. Silver refining charges (RCs), meanwhile, were agreed at between $1.20 and $1.50 per ounce for different smelters.
"TCs are down from $180 per tonne for 2015 annual deals to reflect a tighter lead concentrates market," a smelter source in China said.
Canadian miner Teck previously concluded deals with Korean smelters with a TC of $193 per tonne for 2016 supply deals on a lead base price of $2,000 per tonne.
The disparity in the TCs between the different smelters mostly reflect the zinc content in the concentrates - some of the deals with Chinese smelters do not include zinc payment terms, meaning they could recover the zinc metal from the lead concentrates for free, sources said.
"If there were zinc payment terms in the contracts, the TCs would be higher," the first source said. "They have around 15-16 percent of zinc content at Red Dog, which is equivalent to $50 per tonne to be added on TCs. In essence, it would be a similar TC to the Koreans or Japanese."
(Edited by Mark Shaw)