Treatment charges

In view of the large number of assumptions needed to attempt to quantify the d contribution, and the rather large values for hd reported in some cases, it is felt better to ignore these effects in this treatment. Charge distributions will therefore be calculated from quadrupole-splitting data only. 

The majority of the primary smelters responding tend to treat secondary materials. In conjunction with environmental concerns and the decreasing net lead mine output during the last ten years, which resulted in difficulties in sourcing adequate supplies of concentrates and led to temporarily high treatment charges, the use of secondary materials was intensively... 

For the concentrator, the market target is to prepare a product which, as nearly as possible, satisfies the smelter s specification (pure value mineral if possible) and at least to make a product that is better than that any competitor has to offer. In practice, the miner has to try to minimize the treatment charges, penalties and deductions negotiated with the smelter. 

The treatment charge is negotiable and can escalate with the lead price, but is typically of the order of US 250 per tonne of concentrates at an LME lead price of US 1000 per tonne. The escalation is typically 15 per cent of the increase in the lead price, but is a negotiable item. In times of surplus... 

The smelter primarily makes a return from the treatment charge, plus any free metals derived from recoveries achieved for lead and precious metals above the recoveries implied in the terms. For instance it may be possible to achieve 98 per cent lead recovery, giving three per cent free metal. Silver and gold recoveries may also significantly exceed the terms values, depending on process efficiencies. 

The treatment charge is commonly US 10 to US 15 above the ruling treatment charge for standard zinc concentrates, at around US 220 per tonne, and with the price escalator three per cent lower than standard zinc concentrates at around nine per cent. 

Terms are similarly structured to sulfide concentrates, with the exception that tfeatment charges will be negotiable given the individual smelter s capacity and ability to take additional secondary materials. Treatment charges are generally lower per tonne of material treated, but up to 50 per cent higher when expressed as per tonne of contained lead. There may also be additional penalties where high levels of particular impurities are present. 

The cost of concentrates. In accordance with Chapter 3 Commercial Terms for Purchase of Standard Lead Concentrates concentrate feed has been costed on the basis of a 60 per cent lead content, 1000 g/t of silver and 3 g/t of gold, and a treatment charge of US 265/t of concentrate at a lead price of US 1100/t, giving a net cost of US 650/t of concentrate. 

The returns on investment indicated would not normally be regarded as sufficiently attractive to justify investment, and smelter costs need to be substantially reduced, or returns by way of treatment charges need to be substantially increased. New direct smelting technologies offer improved economics but returns have been insufficient to justify new greenfields smelters at prevailing metal prices. 

The impact of lead price on the margin, and return on investment for the sinter plant-blast furnace process is given in Table 17.15. From this it can be seen that the margin increases by around 29/tonne of lead produced for every 100/tonne increase in the lead price. This reflects the distribution of lead price gains between the concentrate snpplier and the smelter and is a function of the concentrate purchase terms - particularly the escalation of the treatment charge with the lead price. 

The relative sensitivities of cash margin to LME lead price is shown in Figure 17.3. For primary smelters a fall in lead price will cause a proportional fall in raw material costs and a decline in allowable treatment charge, but the dechne in treattnent charge will be only a fraction of the lead price decline and in some contracts may in fact have a floor below which it cannot fall. This has the effect of significantly reducing metal price sensitivity. 

The most extensive treatment of the structural effects of ions on the solvent surrounding them has been made by quantum-chemical treatment (charge field modified, in more recent years) of their first (or first and second) solvation shell combined with molecular-mechanical computer simulations of the solvent beyond the(se) solvation shell(s), the interface between these two regions being also carefully treated. Only small solvent molecules with few atoms, namely water (and for very few ions also ammonia), could be treated in this manner, because of the large expenditure of computer time required for the quantum chemical simulation. 

An increase in by-product prices (most significantly, silver and zinc) will cause the cost of lead mine supply to fall, all other things remaining equal, while an increase in lead concentrate treatment charges would clearly have the opposite effect. 

Trends in annual treatment charges are often compared with changes in the lead concentrate balance from year-to-year (see Fig. 17.2). Such a balance is used as a proxy measure of supply/demand conditions in the concentrate market, but is at best only a very imprecise indicator of the negotiating... 

Treatment charge Refined lead price ( /ton) Concentrate price ( iton) Mine share of revenue (%)... 

Note I Treatment charges are representative of annual contract terms ( US/ton of concentrate) for dean lead concentrates (70% lead) variable basis price df Europe. 

J7.2 Lead concentiate balance and contiact treatment charges, 1982-92. 

There may also be important regional differences in treatment terms, and in relative concentrate prices. Variations in freight costs, for instance, will be an important influence on mine returns from concentrate sales. On the smelting side, treatment charges in Europe tend to be marginally lower than in other regions because of greater competition between plants for concentrate supplies. The Japanese custom smelters, in contrast, face very... 

Metal Bulletin publishes indicative lead scrap prices for the UK maricet and (since 1992) for the European market, on a weekly basis. The prices quoted are considered to be representative of business between the largest merchants and scrap consumers, and are normally related to a specific LME session. For the UK market. Metal Bulletin provides quotations (on a delivered consumer basis) for the following types of lead scrap soft scrap, battery plates, and whole batteries. In addition, a price for lead ashes and residues is indicated, which is based on the LME price, net of a treatment charge. For the European market, prices are provided for soft lead scrap and drained batteries (on a cif Rotterdam basis). A similar range of regular lead scrap price information is provided for other regional markets by their own locally-based publications like American Metal Market and Metals Week in North America, and by Japan Metal Bulletin. 

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