Smelter Schedule

What is a Smelter Schedule?

An agreement scheme between a
concentrator and a smelter for the
sale or purchase of concentrates

The price of the raw materials shall be

the sum of the values of the
payable metals less the sum of the
deductions
What is a Smelter Schedule?
Considers economic and operational
factors to determine the most
agreeable rates for:
Payment schemes for the contained
metals
Deductions for hazardous materials
Other charges
Concentrator + Smelter

ROM
Concentrates

Payments
Concentrator Smelter

Deductions
+ Charges Metal
+ Penalties Ingot
Mine/Mill Custom Smelter
Relationship

COPPER Concentrate COPPER

MINE Contract SMELTER

Shipment Quantity
Shipment Terms
Assays
Payable Deductions
Quotational Period
TC/RC
PP/RPP
Penalties
Payment Terms
 Typical Copper Concentrate
Contract Terms Part 1
Quality : Cu 26%, Gold 40 g/DMT, Silver 60 g/DMT
Moisture 9.5%
Quantity : 30,000 DMT annually ex Philippine Port
Delivery : CIF, Saganoseki
Treatment Charge : $45/DMT
Refining Charge : 4.5 /lb payable copper
Pricing : Copper 26% 1.0 unit
> 26% but less than 31% 1.1 units
> 31% but less than 40% 1.2 units
> 40% 1.3 units
Quotational Period : 3MAMA
Payment : L/C
 Typical Copper Concentrate
Contract Terms Part 2
Credits : Au Refining Charge $5.00/troy ounce payable gold
Below 1.00 g/DMT no payable
1.00 2.99 g/DMT 90.00%
3.00 4.99 g/DMT 94.00%
5.00 9.99 g/DMT 95.00%
10.00 14.99 g/DMT 96.00%
15.00 19.99 g/DMT 97.00%
> 20.00 g/DMT 97.50%
Ag Refining Charge $0.40/troy ounce payable silver
Below 30.0 g/DMT no payable
> 30.0 g/DMT 90.00%
Penalties : Arsenic $3.00/DMT
for every 0.1% over 0.1%
Antimony $3.00/DMT
for every 0.1% over 0.1%
Bismuth $1.00/DMT
for every 0.01% over 0.02%
Price Participation :
None
Duration : one year
Business Cycle of Metals
Definition of Terms
Wet Assay: Assay of the concentrate, with
moisture content
Unit: a pre-determined amount of mass;
usually 10kg (1% of 1 Mt)
Impurity Allowances: limits imposed
either by GIAs or by market requirements
Labor Adjustment: charges imposed on
difference of labor rates
Price Participation: Escalators / De-
escalators
Sample Problem
A concentrator treats 100,000 MTD of
copper ore containing 0.25 % Cu. The
concentrate produced contains:
54.6% CuFeS2
1.2 grams of Au/kg of CuFeS2
0.016% Bismuth
0.3% Arsenic
The tails contains 0.025% Cu.
Determine the following:
1. the amount of concentrate and
tailings
2. overall Cu recovery of the plant
3. concentration ratio
4. profit or return from the sale of
concentrate produced per day
Smelter Schedule: Payments
Copper:
- Deduct 1.5 units from wet Cu assay, and
pay for 97.5% of remainder at published
price less a deduction of 26.4 cents per kg
of Cu
Gold:
- Deduct 0.7 gm per Mt of concentrate and
pay for 92.5% of remainder at published
price less a deduction of 3.2 cents per gm
Smelter Schedule: Charges
Treatment charge: $ 66.00 per Mt

Labor Adjustment:
- Smelter charge is based on an average
hourly cost of labor of $10.00. Increase or
decrease the charge by 13.75 cents for
each 1 cent per hour labor.
Smelter Schedule: Deductions
Arsenic:
- If 0.5 units or more, charge for all at $
1.00 per unit

Bismuth:
- Allow 0.05 units free; charge for excess at
$0.50 per unit.
Smelter Schedule: Addtl Notes
Metal prices:
- Cu = $ 1.50 / kg
- Au= $ 10.20/ gm

Labor rate= $ 20.5/ hr

CuFeS2 = 65% Cu
1Mt = 1 Metric Ton = 1000kg

Unit is 1% of a Mt, i.e., 10 kg

Total Profit / Return

Payments
- Charges
- Deductions
Net Profit
 Revenue Drivers

MINE / MILL SMELTER

Revenue Cost Revenue

Metal Prices Payable Deductions Free Metal
TC/RC TC/RC
PP PP
Penalties Penalties