chinese copper fees down 37 pc in 2007

Smelters unhappy as copper treatment fees plunge 37 pct in 2007.

Chile's Escondida copper mine will pay Chinese smelters copper treatment charges of no more than 60 U.S. dollars a metric ton in 2007, a brutal 37% drop on this year's fee of 95 dollars per metric ton.

Chinese smelters import copper concentrate from abroad and then process it. The nine biggest copper smelters -- which account for 80 percent of the country's total copper concentrate imports -- have a purchasing group called the China Smelters Purchase Team (CSPT).

Australian mining giant BHP Billiton has a 57.5 percent stake in Escondida, the world's biggest copper mine.

CSPT said here Tuesday that in the new deal with BHP Billiton also removed the 30-year old price participation clause, which allows smelters to share mining profits if copper prices increased above an agreed level.

"Tight copper concentrate supply is the main reason for BHP Billiton's tough position in the negotiation", said a CSPT negotiator.

China's copper smelting sector depends heavily on the global copper concentrate supply with 60 percent of raw materials having to be imported.

"Smelters will be under great pressure in terms of profitability in 2007," said the negotiator.

CSPT said the country should encourage big copper enterprises to invest in overseas copper mines and adopt measures to exploit domestic copper resources more effectively.

Source: Xinhua

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