Miners pay treatment and refining charges (TC/RCs) to smelters to turn ore into refined metal and the agreed rate plays a big role in determining the profitability of both sides.
The Santiago-based company and representatives from the Chinese smelters are said to have agreed on treatment charges averaging the mid-$50s.
The Chilean copper miner is said to have inked deals with China Copper, Jiangxi Copper, Tongling Nonferrous and Jinchuan Group.
TC/RCs go down when supplies of copper concentrate tighten.
The deals follow contracts signed at similar levels in 2020. It’d be the third year in a row Jiangxi and Tongling have moved early to secure supply from Antofagasta for the following year
Smelters are keen to lock in supply in advance amid rising competition for concentrate and with fresh risks of supply disruptions rising in South America due to rising resource nationalism and yet a new wave of covid-19 triggered by the Delta variant.
Smelting uses about 4% of the world’s energy and produces roughly 7% of global greenhouse-gas emissions. This does not include downstream emissions that occur when metals are melted again and formed into materials or products.
Antofagasta committed in May to achieve carbon neutrality by 2050. The company vowed to reduce Scope 1 and Scope 2 greenhouse emissions by 30%, or 730,000 tonnes of carbon equivalent, by 2025 from a 2020 baseline.
