Bartek Sadowski/Bloomberg
Miners drive a machine through an underground tunnel of rock salt ore at a copper mine in Polkowice, Poland. Copper gained for a second day in London yesterday.
Miners drive a machine through an underground tunnel of rock salt ore at a copper mine in Polkowice, Poland. Copper gained for a second day in London yesterday. Photographer: Bartek Sadowski/Bloomberg
Sterlite Industries (STLT) (India) Ltd. and Hindalco Industries Ltd. (HNDL) won a 13 percent increase in copper ore processing fees from Freeport-McMoRan Copper & Gold Inc. (FCX) for next year, said two people familiar with the accord.
The two companies, which refine almost all of the nation’s output, will charge the world’s largest publicly traded copper producer $63.50 a metric ton to process concentrate into metal, said the people, declining to be identified because the talks are private. Refining charges will increase to 6.35 cents a pound from 5.60 cents, they said.
Pan Pacific Copper Co., Japan’s largest producer, won a similar increase in fees from Freeport for next year, two industry executives familiar with the matter said on Dec. 3. Smelters in Japan, China and India are seeking higher treatment and refining fees in anticipation of greater output as new projects start production and strikes end at copper mines in Indonesia, Peru and Chile.
“Higher copper fees and a weakening rupee will cushion Hindalco and Sterlite from waning demand due to the economic slowdown,” said Jatin Damania, an analyst at SBI Capital Markets Ltd. in Mumbai, who has a “buy” rating for Hindalco. “The increase in fees will have a positive impact on their profitability.”
The Indian rupee, the worst performer against the dollar among Asian currencies and the so-called BRIC nations in 2011, plunged to a record of 54.305 on Dec. 15 and is poised for a third straight quarter of decline, data compiled by Bloomberg show.
Workers at Freeport’s Grasberg mine in Indonesia agreed to end a three month strike on Dec. 14. Miners at the Collahuasi copper mine, a venture between Anglo American Plc (AAL) and Xstrata Plc (XTA) in northern Chile, last month agreed to end a strike over job dismissals, while Grupo Mexico SAB’s unit in October began talks with Peru’s government to restart its Tia Maria copper project.
Sterlite and Hindalco, which will use about 30 percent of their capacity for Freeport ore, are expected to seek more than $60 a ton to process ore from Chilean producers this week, one of the people said, without giving details.
Hindalco spokeswoman Pragnya Ram declined to comment about next year’s fees, while Sterlite spokesman Pavan Kaushik didn’t answer three calls to his mobile phone.
Sterlite fell as much as 2 percent to 89.4 rupees and traded at 90.45 rupees as of 10:16 a.m. in Mumbai. Hindalco declined as much 2.4 percent to 120 rupees. The benchmark Sensitive Index fell 0.5 percent.
Copper in London gained as much as 0.3 percent to $7,474.75 a metric ton. Three-month copper on the London Metal Exchange traded little changed at $7,461.75 a ton by 12:13 p.m. in Tokyo.
Sterlite and Hindalco, which smelt concentrate mined mainly in Chile, Peru and Australia, had won a 20 percent increase in fees for 2011.
Treatment fees are expressed in dollars per ton of concentrate received and refining fees in cents per pound of copper in the ore. The fees are deducted from the price paid by smelters to mining companies for the raw material.
To contact the reporter on this story: Abhishek Shanker in Mumbai at This e-mail address is being protected from spambots. You need JavaScript enabled to view it
To contact the editors responsible for this story: Rebecca Keenan at This e-mail address is being protected from spambots. You need JavaScript enabled to view it ; Andrew Hobbs at This e-mail address is being protected from spambots. You need JavaScript enabled to view it
 |
"Simply a Must Read for Every Serious Forex Beginner" Available at Amazon Now also for Kindle
|
