zinc offtake stuff

Seems to fit with Aim's timing on offtake finalisation.
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SEOUL, April 1 (Reuters) - Korea Zinc Co.
the world's largest zinc smelter, is in talks with zinc ore suppliers including Canada's Teck Cominco on treatment charges, a source at the South Korean company said on Tuesday.

"Some of the negotiations have been already settled but we are still in talks with many others," said the source.

He said some discussions may be prolonged until the end of April, although differences over the terms of the agreement had been narrowed.

Treatment charges, commonly referred to as TCs, are the fees miners pay smelters to process raw materials into refined metal.

Metal Bulletin reported last week that Korea Zinc could have reached a TC deal with Teck at around $300 per tonne based on a London Metal Exchange zinc price MZN3 of $2,000 per tonne coupled with an escalator of 10 cents a pound and a de-escalator of around six cents a pound.

This compares with last year's benchmark TC of $300 a tonne based on an LME zinc price of $3,500 a tonne.

Escalators and de-escalators are extra charges which protect smelters from rises or falls in zinc prices.

The source declined to comment on the report.

Traditionally TC deals are settled at the American Zinc Association Conference in February, but this year no general agreement was reached amid deep uncertainties about the supply outlook.

Sources with companies involved in the discussions said in February that there remained a wide gap on price ideas, with smelters proposing a rise in fees to between $320 and $360 a tonne on an LME basis price of $3,000 per tonne, while miners seek a cut.

LME zinc closed at $2,320 a tonne, down $30 on Monday.
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