Chinese smelters agree with Antofagasta to zero processing fee instead of negative

Some Chinese smelters have agreed to process copper from Chilean mining company Antofagasta for free. This marks a record low for the industry, but it is still better than expected.

Antofagasta has set the refining fee for copper concentrate at $0 per ton, according to sources familiar with the situation who spoke to Reuters. This agreement reflects a shortage of raw material supply for smelters amid declining global ore production and increasing processing capacity in China.

Benchmark Mineral Intelligence estimates that the global deficit of copper concentrate will reach 1.1 million tons in 2025 and 2.6 million tons in 2026.

According to Reuters, the zero processing fee is currently advantageous for smelters, as current market rates hover around -$43 per ton. This means that smelters are required to pay mining companies for refining their concentrate.

Such contracts will exacerbate the losses for copper smelting enterprises in China, as processing fees are a key source of their revenue. Over time, this may force some smelters to cut production, Reuters projects.