China Copper Refineries Win 70 pct Rise in Pocessing Charges

[2009-02-03]

China's top nine copper refineries have closed their talks with Rio Tinto, striking a deal to raise their processing charges by 70 percent on year to 75 US dollars/ton in absence of price sharing treatment.

The Chinese enterprises got copper processing charges of 44.5-47.2 US dollars/ton from suppliers last year, without enjoying price sharing treatment (Miners offer subsidies to refineries when copper price is higher than the production cost, and receive subsidies from refineries when the price is lower than the cost.)

A source with a refinery said that the processing charges had dived persistently in the past three years to go under the production cost of 90 US dollars/ton for domestic enterprises.

China's refineries managed to go through the unfavorable conditions last year when the processing charges were so low, thanks to the sharp rise of sulfuric acid price that offset losses from smelting, said Yang Jun, head of the negotiation panel.

An analyst with the First Capital Futures held that the surge of processing charges would exert limited impact on the domestic copper smelting firms, as the price of sulfuric acid plunged in recent months.

Currently, the price of sulfuric acid stays around 200 yuan/ton, down 90 percent from the peak last year.
Source: www.chinamining.org
Keywords:Copper
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