Miners and Smelters should Share Profit, Japan Official

Japan Mining Industry Association’s Chairman Hirokazu Yoshikawa, who is CEO of Dowa Mining, said at regular press conference on Thursday that Escondida of Chile is wrong and lost balanced mind when the Chilean firm seeks termination of price participation system, in which miners and smelters share profit from metal price increase. He said miners and smelters should share the market impact for better or worse.

BHP Billiton controlling Escondida is seeking termination of the system for the mid-year ore purchase price negotiation with smelters. The system allows smelters to get 10% of gap between base copper price and higher market price adding on treatment charge and refining charge.

Japanese nonferrous smelters resist the move. The miner and smelters insist the own interests and cannot agree so far. They start second round negotiation in late July but Mr. Yoshikawa said the negotiation is expected to be tough when the miner keeps the position.