By Tom Daly and Zandi Shabalala

(Reuters) – Copper miners and smelters are late agreeing prices for processing focus for subsequent yr, three sources with data of the talks mentioned, with smelters in search of a rollover whereas miners are pointing to a decent spot market.

Miners pay smelters remedy and refining prices (TC/RCs) to course of copper focus into refined metallic.

The primary settlement between a serious copper miner and a Chinese language smelter within the annual mating season is often throughout negotiations in November and serves because the benchmark for the yr forward.

For 2020, it was set at $62 a tonne and 6.2 cents per lb by China’s Jiangxi Copper and Freeport-McMoRan Inc, whose Indonesian unit operates Grasberg, the world’s second largest copper mine.

Nevertheless, spot TCs, which fall when the focus market tightens, at the moment are at an eight-year low of $50.50 a tonne.

“Smelters are aiming for a settlement within the low $60s and miners are proposing … mid $50s,” mentioned one supply concerned within the discussions, declining to be recognized.

A second supply, working for a miner and likewise declining to be named, mentioned the 2 sides had been greater than $10 aside on prices.

Chile’s Antofagasta and Freeport are usually the primary to agree prices.

Nevertheless, a 3rd supply concerned within the talks mentioned the issue for Freeport is that Grasberg’s focus will danger exceeding the utmost permitted fluorine content material of 1,000 elements per million, or 0.1%, in prime copper client China.

“Grasberg will produce much more however the concentrates include excessive fluorine,” mentioned the supply, including that the chemical impurity primarily limits locations for Grasberg’s focus. “That places them in a weaker negotiating place.”

Freeport didn’t reply to a request for remark.

“It’s a massive problem for Freeport. (It is) hanging over the negotiations,” mentioned CRU analyst Hamish Sampson.

Grasberg is transferring from open pit to underground mining. Freeport Indonesia Chief Government Tony Wenas mentioned in June it will produce 160,000 tonnes of ore per day in 2021.

(Reporting by Tom Daly and Zandi Shabalala; extra reporting by Shivani Singh; modifying by Pratima Desai and Marguerita Choy)