London 01/06/2016 -
BHP Billiton and Chinese smelters have concluded some initial deals for its Escondida copper concentrates supply contracts for the second half of this year at treatment charges and refining charges (TC/RCs) of $100 per tonne/10.0 cents per pound, sources familiar with the case told FastMarkets.
This is up from $83-85 per tonne/8.3-8.5 cents per pounds for second quarter contracts with smelters.
Miners pay TC/RCs to smelter to turn concentrate into refined metal, with the charges deducted from the smelters' sale price.
Spot TC/RCs have increased during the past month - it has climbed to $97-102/9.7-10.2 cents from $94-99/9.4-9.9 cents at end-May due to a rise in raw material supply, according to FastMarkets' assessment last week.
BHP offers a mixture of annual, half-year and quarterly contracts to smelters.
The miner has been trying to move away from annual supply contracts for years, preferring to sell under shorter-term contracts - by the quarter or the half-year. Consequently, it does not follow the industry benchmark, which for 2016 has been set at $97.35/9.735 cents - following a key agreement in last December between miner Antofagasta and Chinese smelter Jiangxi Copper.
(Editing by Vivian Teo)