CANCUN, Mexico Teck
Resources Ltd. and Korea Zinc Co. Ltd. have narrowed their
discussions on the zinc treatment charge (TC) benchmark to
around $209 per tonne, industry sources told AMM.
This would swing the terms in
favor of the smelters after a benchmark of $191 per tonne was
reached between the companies last year.
Neither Teck nor Korea Zinc have
confirmed the benchmark, and it is still possible the terms
wont be concluded until after the International Zinc
Association (IZA) conference in Cancun ends later this
A source familiar with the talks
said the companies have been in "very tough negotiations."
A higher benchmark would reflect
a looser market for zinc concentrates.
Miners have been negotiating
from a base of around $186 per tonne, while smelters were
pushing for a much higher $230 per tonne.
Analysts had expected the
companies to settle at around $210 to $215 per tonne.
The terms reached between the
Canadian miner and Korea Zinc are based on a zinc price of
$2,000 per tonne, sources said.
There was no information on the
de-escalators and escalators being negotiated.
These reflect the percentage
decrease or increase in the base treatment charge for every
dollar decline or rise in the London Metal Exchange zinc price
above the basis price.
Other miners and smelters
attending the IZA conference are expected to settle contracts
on similar terms once the Teck-Korea Zinc benchmark has been