November 15, 2018 / 12:11 PM / 10 months ago

UPDATE 1-Jiangxi Copper, Antofagasta agree lower treatment charges for 2019

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LONDON, Nov 15 (Reuters) - Chinese copper smelter Jiangxi Copper and miner Antofagasta have agreed 2019 copper treatment and refining charges (TC/RCs) at $80.80 a tonne and 8.08 cents a pound, three sources familiar with the matter said.

This is the first major deal for the coming year, which typically sets the benchmark for the sector.

The charges agreed between Jiangxi and Antofagasta are down from the 2018 benchmark of $82.25 a tonne and 8.225 cents a pound.

Miners pay the TC/RCs to smelters to process their concentrate into refined metal, offsetting what the smelters pay the miners for the concentrate.

No one at Jiangxi Copper or Antofagasta was immediately available to comment.

TC/RCs typically fall when concentrate supply declines or smelting capacity rises, with the level agreed playing a large role in the profitability of both sides.

China is bringing on a lot of smelter capacity next year, just as a flood of mine supply funded during the boom years starts to subside. The nation is the world’s largest consumer of copper.

The fall marks a fourth consecutive drop in the annual TC/RC benchmarks since it was agreed at $107 a tonne for 2015. (Reporting by Pratima Desai, Melanie Burton in Melbourne and Tom Daly in Shanghai; Editing by Veronica Brown and Mark Potter)

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