LONDON – Global trader and miner Glencore has struck a deal with its Canadian subsidiary Noranda Income Fund on the terms of zinc treatment charges for the coming year, but did not disclose the fees, the fund said on Friday.
Noranda, whose operations include a zinc processing facility in Quebec, last year agreed to buy zinc concentrate from Glencore and sell refined metal back to the miner under a four-year agreement where terms will be negotiated each year.
The market terms of the deal were not disclosed.
However, Noranda said it had negotiated a combination of 50% of the concentrate feed at a fixed treatment charge and the rest at a variable charge that will reflect market movement during the period.
Benchmark treatment charges - the fees miners pay smelters to process their ore - are usually settled between major smelters and miners at the International Zinc Conference, which took place last week.
Supply of feed is rising as can be seen in spot treatment charges, which have risen above $200/t on the spot market from $30 early last year.
"Over the last several months, treatment charges have rebounded in favour of smelters but the pricing environment threatens to continue to be volatile," Noranda said in a statement.
The deal covers the agreed annual treatment period which runs from May 1, 2019, to April 30, 2020.
Glencore is a major producer of zinc, which is used to galvanise steel.