Antofagasta and Jiangxi Copper Agree to Sharply Lower Processing Fees for 2025
Chilean miner Antofagasta and China's Jiangxi Copper have agreed to significantly lower processing fees for copper concentrate in 2025, according to four sources with knowledge of the matter. The agreed treatment and refining charges (TC/RCs) of $21.25 per ton and 2.125 cents per pound represent a steep 73.4% drop from the $80 per ton and 8 cents per pound benchmark set for 2024. This dramatic reduction highlights growing concerns over the availability of copper concentrate in the spot market next year.
The fees, known as TC/RCs, are paid by miners to smelters for processing copper concentrate into refined metal and are a major revenue source for smelting companies. These charges generally decrease when copper ore supply is limited and increase when more ore is available. The significantly reduced charges indicate a tight copper concentrate market, with disruptions at mining operations and increased smelting capacity contributing to a supply squeeze.
The TC/RCs agreed by Antofagasta and Jiangxi Copper are below the estimates of a recent Reuters poll, which had predicted charges would be between the high-$20s and mid-$30s per ton—a 15-year low. This agreement, which typically sets a benchmark for other players in the industry, may influence further negotiations, although some Chinese smelters are reportedly looking to negotiate their own deals with slight variations.
The copper concentrate market has experienced tightening supply conditions due to unexpected disruptions at mines and increased demand from new smelting capacity. Analysts at Benchmark Mineral Intelligence (BMI) forecast a widening copper concentrate deficit, from 1,600 tons in 2024 to 950,000 tons in 2025, underscoring the expected strain on availability.
Antofagasta declined to comment on the agreement, and Jiangxi Copper was not immediately available. The first agreement between a major copper miner and a Chinese smelter often sets the tone for the broader market, and these newly agreed charges may shape the dynamics for the coming year.
