Feb. 24 (Bloomberg) -- Zinc-processing fees will probably rise almost 10 percent from last year, as increased ore supplies enable smelters to charge miners more, said Duncan Hobbs, an analyst at Macquarie Group Ltd.
Smelters including Korea Zinc Co. and mining companies such as Teck Resources Ltd. are in annual negotiations at an International Zinc Association conference in Cancun, Mexico, over treatment charges that mining companies pay to have their semi-processed ore turned into finished metal. The talks will probably be completed in the next two or three days, Hobbs said.
The fees are likely to settle at about $210 a metric ton, based on a zinc price of $2,000 a ton, Hobbs said in an interview in Cancun. The were $191 a ton last year on a zinc price of $2,000 a ton. The fees to refine semi-processed ore, also known as concentrate, generally rise when supplies of ore increase.
“The balance in this year’s negotiations is with the smelters,” Hobbs said. “There’s still likely to be a surplus market this year.”
The price of zinc, used to rust-proof steel, is up 0.4 percent this year on the London Metal Exchange.
Nyrstar NV, the largest producer of the refined metal, is “reasonably confident” that zinc treatment charges will rise, Chief Operating Officer Greg McMillan said on conference call Feb. 7.
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