en.Wedoany.com Reported - Mining company Antofagasta has reached an agreement with some Chinese smelters to sell copper concentrate based on spot index-linked pricing, with a minimum price guarantee clause. This sales mechanism was introduced against the backdrop of ore supply shortages and ongoing fluctuations in treatment and refining charges (TC/RC).

According to industry information provider Shanghai Metals Market (SMM), this agreement marks a shift in copper concentrate sales models from traditional long-term supply contracts. Under the traditional model, miners and smelters negotiate fixed TC/RC, which are often used as a global market benchmark.

When asked about the agreement, Antofagasta stated that the relevant negotiations are confidential and declined to comment on the specific terms agreed with the Chinese smelters.

In the copper market, miners typically pay TC/RC to smelters to convert copper concentrate into refined copper. However, ore shortages over the past few months have driven spot TC/RC into negative territory, forcing smelters to bear the cost of processing materials themselves.

This situation has increased pressure on the 2026 benchmark reference price (set at zero) and prompted some miners to seek alternative sales solutions.

During mid-year negotiations, Chinese smelters initially opposed Antofagasta's proposed spot index-linked pricing, arguing that the mechanism would reduce revenue predictability and increase pricing uncertainty.

However, according to SMM, the two sides ultimately reached a compromise. The agreement stipulates that TC/RC will be linked to market indices but includes a minimum price guarantee, thereby limiting the possibility of selling copper concentrate below a specific threshold.

This mechanism aims to balance market volatility risks with a minimum level of protection for commercial operations, though the report did not disclose the specific value of this threshold.