PERTH, June 5: Copper concentrates from Australia available on the spot market remain in short supply as long-term agreements and internal consumption have tied up the bulk of ouptut, metals dealers said."There have been some spot deals down around the mid 50's($50 a tonne), which is down further than it had been," one dealer said.The availability of local concentrates for export on spot terms has declined in step with rising production at Australia's two big smelting complexes and efforts by overseas buyers to shore up longer-term agreements.
As a result, multi-year frame settlements have also slipped from the benchmark fee established by Freeport McMoran Copper and Gold Inc with Japan's smelting pool of a $102.50 a tonne treatment charge and 10.25 cents a pound refining charge.
The 1997 benchmark price was $105 a tonne and 10.5 cents a pound.
"The significant thing about the frame term settlements is that they have actually been settled at fairly divergent terms," an industry source said."Some ofthe frame terms were as low as ninety and ninety ($90 treatment and $0.90 refining)," he said.
Two key suppliers of concentrates from the region, Papua New Guinea's Broken Hill Pty Co Ltd-run Ok Tedi mine and the North Ltd-owned Northparkes mine have taken "holidays" on long-term agreements, preferring to sell direct into the spot market.
Australia's largest copper mining companies, MIM Holdings Ltd and WMC Ltd are both in the middle of expansion programmes to lift smelting capacity in line with higher mine output.
MIM is lifting annual output capacity rates at its Mount Isa smelter in Queensland to 270,000 tonnes annually from 180,000 tonnes.
In South Australia, WMC is building a new smelter to take annual copper production 200,000 tonnes from 85,000 tonnes starting at the end of 1998.The expansion tracks the widening of WMC's Olympic Dam copper and uranium lode.
Australia's exports of ores and concentrate are forecast to decline by nearly 20 per cent to 753,000 tonnes in 1997/98 (July/June) from940,000 tonnes in the previous 12 months, analysts forecast.
Longer-term the trend is for more copper to be refined domestically.Mineral Commodities NL is studying development of a new copper smelter in Queensland to service local mining operations, which currently ship their raw material overseas.
Negotiations with suppliers of concentrates and other related parties over possible involvement in the project are in final stages of negotiations, Mineral Commodities has said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
