Ivanhoe Mines (TSE: IVN) founder Robert Friedland warns that copper miners and smelters may fail to agree on a 2027 benchmark for processing fees, which he says would be a first. Talks normally start during LME Week, which opens October 19.
Treatment and refining charges (TC/RCs) are fees miners normally pay smelters to turn copper concentrate into refined metal. Friedland puts spot terms more than $250 per tonne below the 2026 benchmark, so smelters are paying for ore instead of charging to process it.
The most recent weekly assessment, published October 9, put typical spot treatment charges at about minus $235 to minus $240 per dry metric tonne.
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The 2026 benchmark, set in a deal between Antofagasta and Chinese buyers, is $0 per tonne and 0.0 cents per pound. That compares with $21.25 and 2.125 cents for 2025, and the report calls it the lowest level on record.
Friedland blames a concentrate deficit and says miners hold the leverage. Limited mine output has failed to keep pace with a smelter buildout concentrated in Asia, a separate analysis says. Unless the deficit changes, Friedland adds, TC/RCs will stay “deeply negative.”
Without a benchmark, Friedland says concentrate contracts would track a running spot-price index. Antofagasta already agreed in July to price some term sales to Chinese smelters off a spot index, with a minimum fee guaranteed.
Another analysis called it “too early to conclude that the fixed annual benchmark will disappear” and floated a benchmark covering fewer tonnes.
