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BHP Wins Cut in Copper Fees From LS-Nikko, Brook Hunt Reports

BHP Billiton Ltd., the world’s biggest mining company, won a cut in copper processing fees from LS-Nikko Copper Inc., according to researcher Brook Hunt.

BHP will pay $39 a metric ton and 3.9 cents a pound in treatment and refining charges, Brook Hunt said in a report to clients this week, citing unidentified people with knowledge of the accord. The figures were confirmed yesterday by Richard Wilson, chairman of metals at Addlestone, England-based Brook Hunt, a Wood Mackenzie company. A spokesman for Seoul-based LS-Nikko denied an agreement had been reached.

“We’ve not concluded any deal with BHP,” said Lee Joon, a spokesman of LS-Nikko, operator of the world’s third-largest copper refinery and smelter. Fiona Martin, a spokeswoman for BHP in Melbourne, declined to comment today. BHP owns the Escondida mine, the world’s biggest copper mine.

The fees are part of mid-year contracts, which typically cover about 5 percent of the annual global business, Brook Hunt’s Wilson said. The remainder is handled under annual contracts. Fees at the end of last year were set at $46.50 and 4.65 cents, he said.

The treatment and refining charges usually decline when there is a shortage of raw material and smelters have to compete for deliveries. Copper for delivery in three months on the London Metal Exchange rose as much as 2.1 percent to $6,459.75 a ton today.

Brook Hunt’s data is used in presentations by companies including BHP, Rio Tinto Group and Aurubis AG, the world’s second-largest producer of refined copper after Codelco.

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