Treatment charge

A treatment charge is the fee a smelter deducts from the price it pays a mine for concentrate, covering the cost of processing it into refined metal.

When a mine sells concentrate rather than refined metal, it is selling an intermediate product that still needs to go through a smelter. The smelter charges a treatment fee for that service, deducted from what it pays the mine for the metal content of the concentrate, which is why concentrate producers receive less per tonne of contained metal than a refined-metal seller does.

Treatment charges move with how much smelting capacity is available relative to the concentrate on offer. When many mines are producing concentrate and few smelters are competing for it, smelters can charge more; when smelting capacity is scarce, mines gain the upper hand and charges fall. Copper treatment charges are negotiated between miners and smelters, often referencing benchmark terms agreed annually or renegotiated more frequently when the market is volatile.