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BHP agrees to 70% copper fee hikeJanuary 15, 2009 - 6:22AM
BHP Billiton, the world's biggest mining company, agreed to pay Pan Pacific Copper 70% more in raw material processing fees in 2009, the first increase in three years.

"Fees are about 70% higher than last year,'' Masatoshi Kawada, spokesman at Nippon Mining & Metals Co, said by phone from Tokyo, without specifying the new rates. "BHP reached a deal with us today,'' he said. Pan Pacific, Japan's top copper smelter, is a joint venture between Nippon Mining and Mitsui Mining & Smelting.

The higher fees are set to raise costs for BHP and boost earnings for Pan Pacific Copper. They are a benchmark for Asian smelters and follow similar gains for Jiangxi Copper, Sterlite Industries Ltd. and Mitsubishi Materials in negotiations this month with Freeport-McMoRan Copper & Gold, the world's second-largest copper producer.

"The increase will help Japanese smelters which have suffered from plunging copper prices and the yen's sharp increase against the dollar,'' Takashi Murata, Tokyo-based analyst at Daiwa Institute of Research, said today by phone.

Copper has plunged by more than half from a record $US8,940 a ton in July as the global economic slowdown reduced demand for the metal used in pipes, tubes and cables, driving producers in Japan and China to cut output and pushing global inventories to the highest level in five years.