Freeport McMoRan Inc. looks forward to breaking away from the benchmark pricing system, thereby underpinning the global sales of mined copper ores so as to protect the profitability of smelters, the top commercial executive of the company said in an interview.
The global copper industry has long depended on a single benchmark pricing system when it comes to sales of semi-processed ores called concentrates. Copper smelters happen to receive the processing fees called treatment and refining charges, or TC/RCs, in order to turn the concentrates into metal.
These fees which then get deducted from the value of the metal that is contained in concentrates – are critical to keep the furnaces running, as they typically comprise almost one-third of smelters’ revenues.
However, unprecedented supply disruptions, smelting expansions, and also robust buying interest from traders have pushed the standard TC/RCs to record lows in 2025.
According to the senior vice-president for sales and marketing with Freeport, Javier Targhetta, in the last 35 years, he has never seen anything like this, and they at Freeport are not happy that their customers are losing money.
There are many who expect the benchmark to dip even further in 2026, therefore potentially turning negative; that would effectively mean that the charges get added to the concentrates’ cost and not get deducted from them.
Due to such an outcome, Freeport would most likely elect not to follow this standard in 2025 and would rather strike individual supply deals that would better protect the margins of the smelters, said Targhetta.
He further added that the market is evolving away from the standardized system more than ever now, speaking at an interview as the benchmark negotiations when it comes to TC/RCs kicked off in the LME Week in London.
Apparently, these comments stand out since for more than three decades, Targhetta happened to be in charge of signing massive supply deals along with the smelters, which have routinely gone on to provide the international TC/RC benchmark.
It is well to be noted that the company stepped back from the process in deals for 2025 after building another smelter of its own, which left fewer concentrates that were available to other buyers. Antofagasta Plc, the Chilean miner, took the helm and went on to set a record low benchmark with a treatment charge amounting to $21.25 per ton of ore processed as well as a refining charge of 2.125 cents per pound of metal that’s produced.
Interestingly, Targhetta also happens to be the chairman of the Atlantic Copper smelter of Freeport in Spain, which goes on to source concentrates from the own mines of Freeport as well as third parties. All this does add to Targhetta’s concerns pertaining to the steep decline in the processing fees.
In one of the recent tenders, traders were offering TC/RCs of less than $100/-10 so as to secure supplies in 2026, said people familiar with the matter.
According to Targhetta, they don’t call those numbers the benchmark, as they are nonsense, referring to the recent spot transactions. He added that Atlantic Copper would never accept a zero-tolling fee.