COPPER CONCENTRATE PAYABLE CALCULATION
Smelters don't pay 100 % of contained copper. This page walks through the standard payable formula used in copper concentrate term sheets and shows where each deduction comes off.
The standard payable formula
Net payable USD = DMT × (Cu% − deductible%) × payable% × Cu price − (TC × DMT) − (RC × payable Cu oz) − impurity penalties − freight allowance.
Typical clean-concentrate terms
Clean ≥25 % Cu concentrate: 96–96.65 % payable, 1.0–1.1 percentage-point deductible, TC ~ $70–90/dmt, RC ~ $0.07–0.09/lb of payable copper.
Impurity penalties
Smelters penalise concentrate for arsenic (>0.2 %), antimony, bismuth, lead, zinc, fluorine, mercury and chlorine. Each is priced per 0.01 % over a threshold.
Worked example
1,000 dmt at 27 % Cu, 1 % deductible, 96.5 % payable, $9,200/t Cu, $80 TC, $0.08 RC → gross 250.59 t payable Cu × $9.20 = $2,305,425, less TC $80,000, less RC $44,170 → ~$2.18 m net.
Key assumptions
- DMT = dry metric tonne (moisture removed)
- Standard 1 % unit deductible on contained Cu
Frequently asked questions
What is TC/RC?
Treatment Charge (TC) is per dry tonne of concentrate; Refining Charge (RC) is per pound of payable copper. They are the smelter's processing fee, set annually in benchmark negotiations.
What is the 1 % deductible?
Industry standard — payable copper is calculated on (grade − 1 %), reflecting smelter losses. Some Chinese smelters use 1.1 percentage points.