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Sources say that Antofagasta's copper smelters have won a better than expected $0 TC/RC contract from China.

Four sources familiar with the matter said that Antofagasta, a Chilean miner, had agreed to a new record-low processing fee for copper concentrates. The fees will be $0 per ton of copper concentrate and $0 cents per pound.

The low prices reflect the shortage of copper concentrate and are compared to the benchmarks for 2025, which were $21.25 per ton and 2.125cents per pound as agreed by the Chilean company with Chinese smelters.

Two analysts and one smelter who spoke on the condition of anonymity said that it was "better than anticipated".

Antofagasta didn't immediately respond to an outside office hour request for comment.

Spot charges hover around $43 - meaning smelters will have to pay the copper miner for processing their concentrate.

The contracts will still result in smelter losses, especially for China, which is the largest refiner and consumer of copper. These fees are the main source of income. Analysts, smelters, and traders all said that the new low would eventually force some smelters into cutting production.

This year, the shortage of concentrates has increased as more smelter capacities are coming on line in China.

(source: Reuters)