By Yuka Obayashi
TOKYO (Reuters) -Japanese copper smelters face tough mid-year negotiations with global miners over treatment and processing charges (TC/RCs) as they wouldn’t be able to accept the very low terms that Chinese smelters agreed with suppliers, the Japan Mining Industry Association’s head said on Thursday.
Some Chinese smelters agreed TC/RCs of $0 per metric ton and 0 cents per pound with Chilean miner Antofagasta during mid-year talks last month. These rates are seen as an industry benchmark and compare with the 2025 annual charges at $21.25 a ton and 2.125 cents per pound agreed between the Chilean company and Chinese smelters.
Japanese smelters, by contrast, had secured TC/RCs of $25 a ton and 2.5 cents per pound for 2025 by around May, according to two industry sources. They are now engaged in mid-year talks to maintain higher margins than their Chinese counterparts, JMIA Chairman Tetsuya Tanaka said.
“Still, negotiations are proving very difficult, as the miners have proposed charges even lower than the 2025 annual levels,” Tanaka told a news conference.
Tanaka warned shrinking smelting margins are placing non-Chinese smelters under severe pressure.
Tanaka, also the president of Mitsubishi Materials, noted negotiations are conducted by individual companies, but said the terms accepted by Chinese smelters are unacceptable for his firm.
It was unclear whether the ongoing talks are for second-half semi-annual contracts or new annual agreements running from July through next June.
“Negotiations by the private sector alone cannot easily break the deadlock, so we are asking the Japanese government to act in unison,” he said, pointing to a possible collaboration with other non-Chinese consumer countries, but did not give details on what action he wanted governments to take.
An official at the industry ministry said the Japanese government aims to maintain and strengthen domestic smelting of key minerals, though no specific support measures for copper smelters have been decided.
Regarding China’s export restrictions on rare metals, Tanaka said Mitsubishi Materials is seeing some recovery in tungsten procurement, but supplies remain tight and insufficient to meet domestic demand.
Japan also aims to bolster national stockpiles of critical minerals by increasing volumes or expanding target items, but details are not disclosed for national security reasons, the industry ministry official said.
(Reporting by Yuka Obayashi; Editing by Susan Fenton)
