Base Metals Concentrate Sales Contracts - Change Pavlov and the Dog

The commonly traded base metals concentrates of copper, lead, tin and zinc are sold by miners to custom smelters using contracts whose terms were generally established at the beginning of the 20th century or even earlier. Technical clauses in these concentrates for items such as payable metals and penalty elements do not reflect current realities of extractive metallurgical technologies and hygiene/environmental issues.It is an axiom that the miners and smelters have a symbiotic relationship. While the existing antique and arcane commercial arrangements serve the purpose of transferring money from the buyer to the seller, they are not likely to result in the industry achieving better overall technical and economic outcomes. By examining the cases for copper concentrates and zinc concentrates in particular, it will be shown that the practical application of these antiquated technical clauses does not drive the miners to produce the better quality concentrates that should be desired by the smelters. This is despite development of mineral beneficiation and hydrometallurgical technologies that would allow the miners to make better products.The adage that any extractive metallurgical problem in the smelter is cheaper to solve in the concentrator still generally holds.While nickel concentrates are only touched on lightly in this discussion because sales terms are more opaque than those for the other base metals, it is expected that the same conclusions will apply.CITATION:Munro, P D and Munro, S E, 2015. Base metals concentrate sales contracts – change Pavlov and the dog, in Proceedings MetPlant 2015, pp 46–60 (The Australasian Institute of Mining and Metallurgy: Melbourne).