Tongling Nonferrous Metals (Group), China's second-largest copper producer, has agreed to lower copper processing fees with Chile's Escondida mine, an official from Tongling said on Tuesday.
Yang Jun, a Tongling manager, told Reuters it had settled on copper treatment charges of $US73.5 ($A97.68) a tonne and refining charges of 7.35 US cents a pound in their mid-year negotiations for cargoes to be shipped between July 2006 and June 2007.
This compared with the refining and treatment charges of more than $US110 ($A145.84) and 11 US cents, respectively, for the previous year ended June 2006.
Yang is export-import manager at Tongling, which is also the majority owner of Jinlong Copper Co, a joint venture between the Chinese company and Japan's Sumitomo Metal Mining Co Ltd.
In the spot market, Chinese smelters had demanded treatment charges of $US100 (A$132.60) a tonne and refining charges of 10 US cents a pound, and said that they were willing to cut production if they could not get enough of the raw material.
A 25-day strike at Escondida forced majority-owner BHP Billiton to declare force majeure last month. The mine, also partly owned by Rio Tinto Plc, is seen ramping up to full production this month.
The fees in the spot market have fallen 40 per cent since June, partly due the strike at Escondida, the world's largest mine. A supply fall usually encourages sellers of concentrate to pay less in processing fees.
Tongling is a member of the China Smelters Purchase Team, a group of smelters that negotiate together processing fees for imported spot concentrate. The eight members negotiate fees for term contracts separately with foreign suppliers.
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