Wedoany.com Report-Dec.20, Chilean mining company Antofagasta has reached an agreement with a Chinese copper smelter on treatment and refining charges (TC/RCs) for 2026 deliveries, setting terms at $0 per metric ton and 0 cents per pound, according to two sources familiar with the negotiations on December 19, 2025.

This outcome follows extended discussions and represents the lowest annual benchmark charges ever recorded. For comparison, the 2025 terms established in December 2024 stood at $21.25 per ton and 2.125 cents per pound. The new zero-level agreement aligns with mid-year spot market conditions observed earlier.

Under standard industry practice, miners pay TC/RCs to smelters to process copper concentrate into refined metal. Lower charges typically emerge when concentrate supply becomes constrained, prompting smelters to accept reduced fees to secure material. In extreme cases, terms can reach zero, meaning no payment from miners, though smelters still avoid outright costs for processing.

Negotiations between Antofagasta and Chinese smelters proved particularly demanding this year, one source noted. The identities of the smelter and sources remain undisclosed due to the confidential nature of the talks. Antofagasta did not provide an immediate response to inquiries.

Supply disruptions at major operations worldwide, including Grasberg in Indonesia and Kamoa-Kakula in the Democratic Republic of Congo, have significantly tightened concentrate availability in 2025. These interruptions contributed to spot treatment charges turning negative at times, shifting the usual revenue dynamic for smelters.

The timing of the settlement came later than typical annual benchmarks. Jiangxi Copper, a leading Chinese smelter often involved in initial agreements, had scheduled discussions with Antofagasta. Other prominent Chinese smelters include Tongling Nonferrous, China Copper (part of Chinalco), and Jinchuan Group.

Earlier attempts to finalize terms during Asia Copper Week in Shanghai in November 2025 did not succeed. At that event, representatives from the China Nonferrous Metals Industry Association expressed reservations about processing concentrate without compensation or at negative rates.

Subsequently, the China Smelters Purchase Team (CSPT), comprising major Chinese copper producers, announced plans to reduce refined copper output by over 10% in 2026. This measure aims to help restore balance between concentrate supply and smelting capacity.

The concluded zero TC/RC terms for 2026 reflect current market realities shaped by limited concentrate availability and ongoing adjustments across the supply chain. Such benchmarks serve as reference points for other contracts globally, influencing pricing dynamics in the copper industry.