Treatment Charges

Treatment charges are standard for base metal concentrates, semi-refined metals and iron ore (for example, USD/t for copper concentrate). Treatment charges are associated with the process that the buyer of a raw material (for example, base metal concentrates) performs to refine the metal. It is expressed as a charge per tonne of material or, as is standard in concentrates, per dry tonne of material.

The main difference between treatment charges and refining charges is that treatment charges are related to the entirety of the product (the analyte involved is not specified), whereas refining charges relate to a specific analyte (for example, silver) and relate to the metal units (for example, troy ounce).

Treatment charges can have escalating tiers, where additional charges are made depending on the base price for the main product.

Example: For a zinc contract:

• Treatment Charge: 100.00 per USD/dmt
• Base Price: 1000 USD
• Escalating tier:
  • Below 1000 USD: -0.145 USD
  • Above 1000 USD but less than 1100 USD: +0.15USD
  • Above 1100 USD: +0.16 USD

In this case, the treatment charge is provided given a base price of zinc of 1000 USD (as given by the price series). The escalating tier specifies that if the average price is below 1000 USD, then 14.5 cents will be deducted from the treatment charge per tonne. If the price is between 1000 USD and 1100 USD then 15 cents will be added, and if the price is above 1100 USD then 16 cents per tonne will be added to the treatment charge.