PERTH, June 9: Australia's MIM Holdings Ltd has settled its 1998 zinc concentrate supply terms with Korea Zinc Co at $187.50 a tonne, basis $1,100, an industry source said on Tuesday."MIM has settled at $187.50 with Korea Zinc," the source said.
MIM officials could not be reached for comment, although traders have said they expected MIM to reach the agreement in line with most of the industry.
A Korea Zinc official on Monday told Reuters the company expected to settle with MIM by next week for the supply of 100,000 tonnes of concentrate. At $187.50, the fee largely coincides with the industry benchmark established by mining companies worldwide.
However, the fee is not universal.
Pasminco Ltd was the first of the major miners to reach agreements with Asian smelters, settling at $191 a tonne. Earlier on Tuesday, fellow Australian miner Western Metals Ltd said it had negotiated a premium of up to $8 a tonne to the benchmark for the supply of 150,000 tonnes of high-grade zinc concentrate to KoreaZinc.
This compares with a premium of $3 last year.
"Last year was the first year we've ever actually had a discount in the treatment charge. In other words, we got a premium for our concentrates," Western Metals managing director Rod Webster said.
The Western Metals contract will take up about 60 per cent of the company's annual output, which includes production from its new Pillara mine, scheduled to start production in about two weeks.
"We've been able to lock it in for up to $8 a tonne for the life of mine," Webster said.
Western Metals now hoped to conclude similar supply agreements with Savage Resources Ltd and India's Binani Industries Ltd, Webster said. Binani plans to build a smelter in the western Indian state of Gujarat capable of producing 100,000 tonnes of zinc and 70,000 tonnes of lead annually.
The company already smelts zinc at its plant at Binanipuramin the southern state of Kerala.
Savage is raising zinc output at its Clarksville refinery in the United States to 300,000 tonnesfrom 105,000 tonnes starting in the first quarter of 2000. Webster would not rule out shipping concentrates at a later date to Thailand's Padaeng Industry Plc. The two companies recently confirmed they had held discussions over Western Metals taking a possible equity stake in the Thai company's smelting business.
However, it would likely be another year before Western Metals supplied much concentrate to Padaeng, Webster said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
