Smelting and Refining Section 2011 PDF

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Mining Cost Service
Section SM
Smelting
CONTENTS Compiled by Jerry Olson
Page Page
Introduction .............................................................1 Base Metal Smelters Map – United States ............ 24
Model Smelter Schedules ........................................2 Smelter Survey – United States ............................ 25
Base Metal Smelters Map - Canada ......................11 Appendix A
Smelter Survey - Canada .......................................12 Gold and Silver Refining ......................... A1 - A3
INTRODUCTION
Methods for determining the monetary values indexed to the principal smelting variables, i.e.
returned to the mine owner are generally quite labor, fuel, and power. It may also be increased by
similar for most base metal smelters. Elements additional charges to cover such items as
usually found in a smelter contract include: environmental costs.
Refining costs may be covered as a separate item,
as an adjustment to the metal price paid, or as an
1. A base treatment charge or smelter charge, usually
unseen component of the treatment charge. The cost
expressed in dollars per dry metric ton (tonne) treated.
of transportation to a refinery or to a point of sale is
2. Assay and price adjustments for each of the metals often covered in a similar manner.
paid for. Price participation clauses adjust the treatment
3. Assessments for excessive amounts of deleterious charges of the contract when the metal price moves
components. These assessments are commonly up or down relative to a contract base price (basis).
encompassed by the treatment charge. Price participation clauses offer the miner some
4. Refining charges to cover the costs of purifying the relief when prices drop relative to the price of the
recovered metals. metal at the time the contract was negotiated. Price
5. Price participation - escalation or de-escalation of participation also allows the smelter to benefit when
charges based on metal price fluctuations. prices go up relative to a base.
The net smelter receipts are thus calculated by
Typically there are two types of contracts – long determining the total concentrate or ore value on the
term, generally negotiated on an annual basis and basis of metal paid for, and then subtracting the
spot contracts which are short-term and typically various charges and deleterious component
apply to single lots or ship loads. deductions. Unfortunately for the mine owner, he
Other items commonly found in a smelter may find that his "bonanza" is considerably
contract include payment timing and currency; the diminished after it has been evaluated via the smelter
quotation period; procedures for weighing and schedule. It is not uncommon to lose as much as half
sampling; assay and umpire procedures; terms to the apparent ore or concentrate value through this
cover loss of shipment, title and risk insurance; taxes essential step in marketing. Thus, it is obvious that
and duties; force majeure; and arbitration. careful analysis of the realizable dollars to the mine
The metals for which a smelter will pay vary owner through processing is an essential step in
from facility to facility, as do the percentages by mine valuation.
which each assay value is reduced for payment This section contains maps locating all Canadian
purposes. Therefore, it is essential to evaluate and United States primary base metal smelters;
several potential processors to obtain the best model schedules for smelting lead, zinc, and copper
contract for a particular concentrate. Because of concentrates; a discussion of gold and silver
price and assay adjustments, the actual value refining, along with guidelines for estimating costs;
received by the mine owner is usually considerably and results of our survey of all Canadian and United
less than the metal assays and market prices would States base metal smelters.
suggest. Typically, for a primary component metal, United States platinum-palladium, beryllium and
the amount paid is 85 to 98 percent of the amount tungsten smelters, and Canadian and United States
contained. Percentages for byproduct metals are molybdenum roasters are also included in the survey
usually less. The smelter or treatment charge is also results.
subject to negotiation and adjustment. It is generally
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Copyright © 2011 InfoMine USA, Inc. 1
MODEL SMELTER SCHEDULES 2011
The model smelter schedules on the following pages containing excessive amounts of some elements.
were constructed in cooperation with representatives These Adirty@ concentrates often make their way to
of U.S. and Canadian smelting companies, with overseas markets where environmental regulations
representatives of mining companies who regularly are less stringent.
ship to these smelters and through review of trade
publications. The treatment charges, deductions, and
assessment amounts are based on data from 2010 Copper Smelting
through early 2011. Environmental restrictions, high energy costs and
Terms and conditions can vary tremendously for the forces of international competition have
the same concentrate offered to different smelters. necessitated massive changes in the copper smelting
The primary focus of most smelting contract industry. Plant modifications have focused on
negotiations is the treatment charge. installation of sulfuric acid plants and pollution
Driven by the forces of competition, smelter control equipment, and replacement of reverberatory
treatment charges are heavily influenced by the furnaces with more efficient and cleaner flash
availability of smelter furnace capacity relative to furnaces.
the supply of concentrates. When concentrates are in In the last 50 years, copper smelting technology
short supply, treatment charges are generally lower has improved to increase overall recovery and
as smelters compete for feed. The opposite is true energy efficiency and to reduce toxic emissions. In
when abundant concentrates are available and the early 1960s, most copper smelters employed
shippers compete for smelting services. reverberatory furnaces, which were considered state-
Currency exchange rates can play a significant of-the-art. A few smelters also used blast furnaces.
role in establishing treatment charges, even when the The first flash smelters were installed in Finland
concentrate is not exported. A strong U.S. dollar by Outokumpu and in Sudbury, Ontario by Inco.
tends to encourage exporting of concentrates, Flash smelting utilizes the available intrinsic heat in
thereby forcing North American smelters to lower copper sulfide minerals by burning the concentrates
their charges to remain competitive. A weak dollar in air or in an enriched oxygen environment. The
has the opposite effect. concentrates burn to form a pool of molten matte
Price participation is also a feature commonly and slag at the bottom of the furnace. This process
found in long-term or annual contracts. Base metal requires about half the energy to convert the
prices are set in the contract, with mines paying concentrates to matte than is required by a
higher treatment and refining charges (TC/RC) if the reverberatory furnace. Highly concentrated waste
metal price increases and a lower TC/RC if the price gases are produced, reducing the volume of the
drops below the base price. This feature benefits waste gas by as much as 70%, compared to a
both the smelter and miner, protecting the miner reverberatory furnace. This feature enhances SO2
from burdensome treatment and refining charges if capture considerably.
the price of his commodity drops, but allowing the Of considerable importance to the shipper is a
smelter to share in the increased profits if the price heightened concern about the content of deleterious
increases. elements in smelter feed. Heavy penalties are
Other factors affecting treatment charges are assessed for elevated levels of arsenic, antimony,
grade and quality of the concentrate, metal prices, and bismuth; in fact, a shipper with arsenic above
the smelter's distance from the mine, and the size 2% to 4% may have trouble finding a smelter that
and regularity of shipments. A low-grade "dirty" or will accept his concentrates. Zinc and lead levels
"complex" concentrate will carry a higher treatment above 2% each often result in rejection.
charge than a higher grade "clean" concentrate. Treatment and refining charges have fluctuated
When metal prices are higher, treatment charges widely over the past decade. The table on the
tend to be higher; and often a smelter will charge following page shows the variation in treatment and
less for concentrate from a distant mine to partially refining charges over the past 10 years. Most miners
compensate for high shipping costs. In some and smelters settle annual (long-term) contracts each
instances, however, smelters will offer favorable year on the bulk of their concentrates. The rest of the
terms to a nearby mine to secure a long-term supply production can be sold on the spot market.
of feed. Competition for inadequate copper concentrate
Smelting contracts generally include deleterious supplies can drive TC/RC prices down, while
element charges in the treatment charge rather than shortages of smelter capacity or excess concentrates
delineating them as separate items. U.S and can drive these charges up.
Canadian smelters are quick to reject a concentrate
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2 Copyright © 2011 InfoMine USA, Inc.
Comparison of Copper Concentrate Treatment Charges and Copper Prices by Year
Long-term Treatment Charge Refining Charge Average LME 1 Grade A

Year
(US$ per tonne clean concentrates) (US$ per pound) Cash Price (US$ per pound)
2001 $73 - $80 $0.073 - $0.080 $0.716
2002 $60 - $70 $0.060 - $0.070 $0.707
2003 $45 - $58 $0.045 - $0.058 $0.807
2004 $40 - $47 $0.040 - $0.047 $1.300
2005 $83 - $95 $0.083 - $0.095 $1.668
2006 $70 - $110 $0.070 - $0.110 $3.049
2007 $50 - $60 $0.050 - $0.060 $3.238
2008 $45 - $50 $0.045 - $0.050 $3.154
2009 $50 - $75 $0.050 - $0.075 $2.336
2010 $39 - $47 $0.039 - $0.047 $3.420
2011 $56 - $90 $0.056 - $0.090 $4.105 (June 2011)
1
London Metal Exchange
Long-term (annual) copper treatment charges in 2010 and 2011, none of the contracts reported
2004 to 2006 slowly increased as the price of copper included price participation.
increased along with higher concentrate production, In early 2010, Freeport settled for annual contract
finally reached a high of $95 to $110 per tonne with treatment and refining charges of $46.50 and
refining charges between $0.095 and $0.110 per $0.0465 respectively with it=s Chinese and Japanese
pound copper. Price participation for the first part of customers and BHP Billiton (BHPB) settled for the
2006 was 10% at a basis price of $0.90 per pound same pricing with it=s Japanese customers. Mid-year
copper. Concentrate supplies continued to tighten contracts were reporting record low treatment
during the year, giving the miners the upper hand. charges of $39 per tonne and refining charges of
Prior to mid-2006 annual copper contracts, price $0.039. Complex concentrates were typically $10 to
participation clauses typically kicked in at $0.90 per $15 per tonne higher.
pound copper and ranged from 5% to 10% of the Chinese smelters and BHPB reached an
price of copper over $0.90 per pound. Price agreement in January 2011 to set TCs at $72.00 per
participation had become extremely important. In tonne and RCs at $.072/lb for the first half of 2011.
2006, the price participation revenues to smelters This was a departure from the usual annual contract,
actually exceeded the treatment and refining changes leaving the rest of their production to be negotiated
combined. For example, at the LME (London Metals later in the year. These charges represented a 54%
Exchange) price of $8,000 per tonne ($3.63 per increase over the TC/RCs settled for the second half
pound), with a 10% price participation over the basis of 2010.
price of $0.90 per pound copper, the value of the Freeport and Ok Tedi negotiated a much better
price participation is over $0.27 per pound payable deal with Japanese smelters than BHPB for their
copper, more than the value of the treatment and annual 2011 contracts. These agreements were
refining charges combined. Miners argue that this settled at a TC of $56.00 per tonne and RC of
gives the smelters too much benefit from the higher $.056/lb, up only 20% from 2010. Elsewhere
prices, while smelters report that at these low Japan’s Pan Pacific Copper settled with one South
treatment and refining rates, they are barely American miner for annual 2011 TC/RCs of $80 per
profitable without the price participation. tonne and $0.08/lb for complex concentrates.
During the mid-year 2006 contract negotiations, For the second half of 2011, TC/RC contracts
miners pushed hard to eliminate the price increased significantly, impacted by the Japan
participation clauses. Most of the annual smelter earthquake in March and influenced by higher spot
contracts in 2007 either had no price participation prices. Since BHP Billiton contracted only half of
clause or the price participation was capped at their production in January, they were forced to
$0.04-$0.10 per pound and calculated on a new basis settle the rest of their production at a TC of $90.00
of $1.20 to $1.50 per pound copper. For 2008 and per tonne and RC of $0.09 per pound copper, almost
early 2009, only a few contracts included price double the annual contract rate in 2010.
participation, capped at $0.04-$0.06 per pound. In
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Spot contracts can vary widely from month to Pine Michigan shortly thereafter largely due to the
month and generally reflect short-term prices and age of the plant and regulatory changes.
supply and demand. Until recently, mines producing high grade
Spot TC/RC’s for 2008 fluctuated widely from concentrates, over 40% contained copper, typically
treatment charges between $5 to $40 per tonne and paid higher treatment charges, while moderate-to
$0.005 to $0.040 per pound refining. The Chinese low-grade concentrates, 24-30% contained copper,
spot TC/RCs started to drop in October 2009 to $20- settled at a lower treatment charge. The high-grade
25 and $0.02-0.025. By April 2010 spot TC/RCs surcharge has been eliminated from some recent
dropped again to very low TCs of $5-10 per tonne contracts, but could appear again in the future. Dirty,
and RCs of $0.005-0.01/lb. However by October complex or low grade concentrates continue to settle
2010, spot TC/RCs in China shot back up to $80 per at higher treatment charges, often with heavy
tonne/$0.08 per lb on the back of rising LME prices penalties for contaminants such as arsenic and
and weak demand from smelters. Spot terms were mercury.
reported in December 2010 at TC/RCs of From 2002 through 2007, China increased
$92/$0.092 and $96/$0.096 to Sterlite and a Chinese imports of refined copper and copper concentrates to
smelter. As of May 2011, spot TCs paid to Chinese fuel its economic growth. In 2008, China consumed
smelters ranged from $90-$120 per tonne. about 5.1 million metric tons of copper, more than
Smelting capacity has continued to climb over the U.S. and Japan combined. However, in 2009
the last several years as countries such as China and with the world-wide economic downturn, demand
India built new smelters and expanded existing ones. for copper production decreased significantly.
Most analysts point to China for most of the Copper production in 2010 rebounded. Production
increased concentrate consumption. from Grupo Mexico in 2011 is expected to increase
Shangdong Xiangguang will be tripling its 25.4% from 2010 and was up 16% at its Asarco
capacity to 600,000 tonnes per copper year and subsidiary in the fourth quarter from 2010 to 2011 is
China’s Western Mining is planning to build a only one reported example. LME copper prices
100,000 tonne/year copper smelter in the surged 62% from a low of $6,235 per tonne in May
northwestern province of Qinghai. Chinese copper 2010 to $10,050 in February 2011. Analysts predict
smelting capacity is expected to rise to nearly 9 that global copper production will increase in the
million tonnes per year by 2015. At the same time next two years, leading to a surplus which will put
Reuters reported that China will close down 291,000 pressure on prices in 2013. Codelco, Chile’s top
tonnes of outdated copper smelting capacity in 2011 producer, see copper prices staying above the 2010
as part of a wider crackdown on heavy and polluting average of $3.42 per pound during the next 3 years.
industries. Global smelting capacity is set to expand
14% to 20.68 million tonnes by 2014, according to
the International Copper Study Group. Lead Smelting
Finnish company Outotec Oyj announced in The lead industry, like all base metals, has been
January 2011 that it has won a contract to supply subjected to highs and lows as the industry either
copper smelting technology to Serbia’s state-run over- or under-produced. Casualties of the
RTB Bor copper mine. Under the agreement, concentrate shortages and low lead prices include
Outotec will provide a new copper flash smelting Asarco’s East Helena, Montana smelter which
furnace and enable the operation to produce 80,000 closed in 2001 and Doe Run’s Glover smelter which
tonnes of copper anode. Outotec has also been was idled in December 2003.
awarded a contract to build a new copper/nickel Over the last 10 years, the average annual LME
smelter in Fangchenggang city, Anhui Province, price of lead steadily improved from a low of $0.20
China. The new smelter is scheduled to be per pound in 2002 to a high of $1.17 per pound in
operational in mid-2012 at an eventual capacity of 2007. In the last four years, the price has ranged
600,000 tonnes per year of refined copper. First from an average annual LME price of $0.95 per
Quantum Minerals is planning to build a smelter in pound in 2008 to a monthly price of $1.14 per pound
2011 in Zambia capable of processing 1.2 million in June 2011. Details of these price fluctuations can
tonnes of concentrate per year. be found in the Cost Indexes and Metal Prices
Partially, as a result of increased smelting Section of this manual.
capacity in China, Xstrata ceased operations at its In 2006, treatment charges in long-term (annual)
Kidd metallurgical facilities in June 2010. Copper contracts increased to $140 to $150 per tonne
concentrate production from Kidd mine is now concentrate at an LME basis of $850 per tonne
processed by the Horne smelter and CCR refinery. refined lead. Escalators ranged from +10% to -10%.
HudBay closed its copper smelter in Flin Flon, Lead concentrates containing high silver were
Manitoba in 2010, and its copper refinery in White assessed an additional $15 to $20 per tonne to cover
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silver refining. Spot treatment charges in 2006 instance, will only import high-silver tonnages if
reflected the tight concentrate market, ranging from they are desperate and have reportedly charged RCs
$40 to $90 per tonne. of $3.00 to $4.00 per ounce silver.
In 2007, smelters and miners settled on an annual In general, other dirty, complex, low-grade or
treatment charge of $160 to $180 per tonne, on a bulk concentrates are harder to place. As a result,
$1,300 basis for clean lead concentrates. charges for these concentrates are generally $50 to
Concentrates containing high silver or “dirty” $75 per tonne higher than charges for clean
concentrates were assessed an additional $25 to $40 concentrates. Bulk lead-zinc concentrates sent to ISF
per tonne. (Imperial Smelter Furnace) smelters typically were
In 2008, treatment charges increased in response charged $60 to $80 per tonne higher than charges for
to the increasing supply of lead concentrates. Annual clean concentrates sent to a conventional smelter.
treatment charges ranged from $320 to $350 per Silver refining charges have also changed in the
tonne at an LME basis of $2,500 per tonne. Many last two years. Previously, smelters imposed a
contracts incorporated up escalators of $0.05 to refining charge of $0.30 to $0.40 per troy ounce for
$0.10 per $1.00 increase per tonne in the LME lead silver. In 2008, smelters increased this charge to
price and de-escalators of $0.05 per $1.00 decrease. $0.50 to $0.70 per troy ounce on annual contracts
Clean concentrates averaged $350 for treatment and up to $1.00 per ounce for spot contracts. Lead
charges on a $2,500 per tonne basis. smelters generally recover precious metals from lead
For 2009, long-term (annual) contracts for clean, concentrates, with 95% silver and gold payable.
high quality lead concentrates fell to $183-$274 for Doe Run will close its Herculaneum smelter in
treatment charges on a $1,000 per tonne basis. Missouri, the only primary lead smelter in the
Silver became an important consideration in the United States, by the end of 2013 and has agreed to
2010 annual contacts. Smelters settled clean, low a refined lead production limit of 130,000 short
silver concentrates at $210-$230 per tonne at a basis tonnes per year to limit sulphur dioxide emissions
price of $2,000. Up escalators of 10% were noted until its eventual closure. Doe Run is hoping to
up to a lead price of $2,300 per tonne. Down introduce a new smelting technology in mid-2013.
escalators were lower at about 5-8% for an average The company hopes to build a plant using a more
lead price of $1,500 per tonne. Concentrates environmentally friendly lead-producing technology.
containing high silver values were hit with higher That technology relies on a wet chemical process
treatment charge of up to $50 per tonne more, plus that would essentially replace heat-based smelting
silver refining charges of between $0.50 to $0.75 per and would recover up to 99% of the lead in
ounce. concentrate.
Early 2011 contracts settled treatment charges at Jiangxi Copper began the construction of a
$290 per tonne, with silver refining charges at $0.60 Kivcet furnace in mid-September 2010 at its
to $.75 per ounce, but by May, most of the annual lead/zinc smelting project in Jinshawan Industrial
contracts for low-silver, clean concentrates were Park in Hukou, Jiangxi province, China. This is part
settling in the $210 to $230 per tonne range with up of the first stage of development to bring on stream
escalators of 4-7% and down escalators of 4%, on 100,000 tonnes per year refined lead capacity and
par with the 2010 rates. Currently, the lead market 100,000 tonnes per year refined zinc capacity in
has plenty of clean concentrates available and 2011 Q4. China’s Henan Yuguang Gold and Lead
smelter demand is down, which translates to higher completed an 80,000 tonne/smelter project in late
treatment charges. 2010.
High-silver concentrates are a different story. As of 2010, China accounts for around two-thirds
Most smelters are reluctant to take high-silver of global primary refined lead output, up from 30%
concentrates and will charge $50 to $75 more in in 2000 and 10% in 1990.
treatment charges, plus a refining charge of $.60-
$.75 per ounce of silver. Chinese smelters, for
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Comparison of Clean Lead Concentrate Treatment Charges and Lead Prices by Year
Long-term (Annual) Treatment Average LME 1 Pure Lead

LME 1 Basis Price
Year Charge Cash Price (US$ per
(US$ per tonne)
($ per tonne clean concentrates) pound)
2001 $145 - $155 $500 $0.216
2002 $120 - $140 $500 $0.201
2003 $110 - $140 $500 $0.233
2004 $110 - $124 $500 $0.402
2005 $110 - $120 $500 $0.443
2006 $140 - $150 $850 $0.585
2007 $160 - $180 $1,300 $1.170
2008 $320 - $340 $2,000 $0.948
2009 $180 - $275 $1,000 $0.780
2010 $210 - $240 $2,000 $0.975
2011 $210 - $290 $2,500 $1.139 (June 2011)
1
Zinc Smelting
Over the last 20 years, the zinc market has been as than annual contracts which put pressure on the
volatile as the lead market, challenging smelters and 2011 negotiations.
mines alike. As of June 2011, annual contract TCs generally
After a short peak in 1997, where the price of settled at $220 to $230 per tonne at a basis price of
zinc averaged $0.75 per pound, prices slid to an $2,500 with up escalators of between 3-6% at an
average $0.35 per pound for 2002. Prices then LME zinc price of $3,000 per tonne, versus down
recovered to $0.475 per pound in 2004 and then to escalators of between 2-4% at an LME zinc price of
$0.627 per pound in 2005. In 2006, the average price $2,000 per tonne. These annual contract terms are
of zinc more than doubled to $1.485 per pound and generating a TC that is about $100 per tonne higher
held steady at an average of $1.47 for 2007. The than spot TCs in January-May 2011.
price of zinc has since retreated to an average of
$0.98 per pound in 2010 and is expected to average
slightly over $1.00 per pound in 2011. Calculating Zinc Treatment Charges
Long-term (annual) zinc treatment charges for
2008 ranged from at $220 to $330 per tonne on a Calculating the effective treatment charge for zinc
basis of $2,000 per tonne. Up escalators of 6% to concentrates depends on four factors: contract
14% and de-escalators of 6% to 14%, at a basis of treatment charges, basis price per tonne of refined
$2,000 per tonne zinc were incorporated in the zinc metal, payable zinc price per tonne and the
reported contracts. up/down escalators.
In 2009, Teck and Korean Zinc reached an
agreement for treatment charges of $194 per tonne Therefore, the effective treatment charge for a zinc
with de-escalators of 10% and escalators of 15% at contract at a $300 per tonne treatment charge,
an LME basis price of $1,500 per tonne refined zinc. basis $2,000 per tonne, using a +6% escalator and
Nyrstar settled European treatment charges at a payable LME zinc price of $2,500 per tonne would
$194.50 at a basis price of $1,250 per tonne. be $330 per tonne of zinc concentrate:
Contract TCs for 2010 were settled at $250 to
(0.06*($2500-$2000)+$300) = $330
$270 per tonne at a basis price of $2,500. Spot
treatment charges in 2010 were significantly lower
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Most zinc smelters use either an electrolytic process Cadmium prices have fluctuated dramatically over
or the ISF (Imperial Smelting Furnace) process. A the past decade as shown below.
few use an electro-thermic process. Most of the
smelters operating in North America are electrolytic, New York Average Annual Dealer Cadmium Price
while both electrolytic and ISF smelters operate in $ per pound $ per
the rest of the world. About 80% of the world's zinc 2001 0.227 2007 3.451
is produced in electrolytic plants. 2002 0.292 2008 2.686
From the shipper's standpoint, the primary 2003 0.594 2009 1.300
difference between the two types of smelters is in 2004 0.546 2010 1.767
the by-product metals they recover and pay for. 2005 1.497 2011 May 1.400
Typically, terms for silver are better at ISF smelters, 2006 1.353
because ISF plants recover as much as 90% of the
silver, while electrolytic plants recover about 70%. Even at the average 2007 cadmium price of $3.45
Concentrates with significant lead values will do per pound, the cost to recover cadmium is still
better at an ISF smelter, where over 80% of the lead higher than its salable value. Because of the volatile
in concentrates may be payable. ISF smelters can nature of cadmium prices none of the smelters in our
recover lead from bulk zinc-lead concentrates which survey currently pay for cadmium in zinc
are unsuitable feed for electrolytic plants. Lead is concentrates.
not generally paid for at electrolytic plants, even Electrolytic plants cannot accept high copper in
though it may be recovered at high cost from lead- zinc concentrates, while ISF smelters regularly treat
silver residue. At some electrolytic operations, lead zinc concentrates with 2-3% copper. In any case,
may be considered deleterious. most zinc smelters do not pay for copper.
All zinc smelters recover cadmium and copper. The waste product jarosite causes significant
Cadmium is easier to recover at an electrolytic plant disposal problems at many electrolytic zinc plants.
than at an ISF plant, allowing electrolytic smelters to One way to limit the amount of jarosite produced is
offer better terms on cadmium. Cadmium is to limit the iron levels in concentrates. For this
commonly produced as a by-product from zinc reason, many electrolytic zinc facilities have
concentrates. In some instances, high cadmium increased penalties for iron and decreased the
values are considered deleterious and may result in allowable levels.
extra charges.
Comparison of Zinc Concentrate Treatment Charges and Zinc Prices by Year
Long-term (Annual) Treatment Average LME 1 SHG

LME 1 Basis Price
Year Charge Cash Price (US$ per
(US$ per tonne)
($ per tonne clean concentrates) pound)
2001 $185 - $192 $1,000 $0.404
2002 $168 - $180 $1,000 $0.353
2003 $140 - $151 $1,000 $0.375
2004 $140 - $148 $1,000 $0.475
2005 $124 - $128 $1,000 $0.627
2006 $125 - $128 $1,400 $1.485
2007 $280 - $320 $3,500 $1.472
2008 $220 - $330 $2,000 $0.850
2009 $186 - $312 $1,250 $0.751
2010 $250 - $270 $2,500 $0.980
2011 $220 - $230 $2,500 $1.012 June 2011
1
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MODEL SMELTER SCHEDULE - COPPER CONCENTRATES
Payments
 Copper: Pay for 95% to 98% of the copper content at market value. Minimum deduction of unit (1% of
a ton) per dry tonne for copper concentrates grading below 30%. Unit deductions and treatment charges
may be higher for concentrates above 40% copper.
 Gold: Deduct 0.03 to 0.05 troy ounces per dry tonne and pay for 90% to 95% of the remaining gold
content at market value.
 Silver: Deduct 1.0 troy ounce per dry tonne and pay for 95% of the remaining silver content at market
value.
Deductions
 Treatment/Refining Charges: Treatment charges in annual contracts for 2011 varied between $56.00 to
$90.00 per tonne concentrate with refining charges of $0.056 to 0.090 per pound copper. (1)
 Price Participation: Prior to mid-2006, contracts often included price participation clauses. Most
contracts settled after late 2006 either eliminated price participation clauses or have capped the price
participation to $0.04 - $0.10 per pound of copper at a basis of $1.20 per pound copper or above. In
2011, none of the contracts reported a price participation clause.
 Complex Concentrates: Treatment charges for "complex" concentrates are typically $15 to $25 per
tonne higher than charges for clean concentrates. In addition, copper concentrates grading over 40%
may be charged up to $10 per tonne more for treatment. This extra charge varies depending on the
tightness of the concentrate market. Currently, no smelters are imposing this charge on high grade
concentrates.
 Refining Charges: Range from $6.00 to $8.00 per ounce of payable gold and $0.50 to $0.75 per ounce
of payable silver.
Penalties
 Deleterious Element Penalties: Copper concentrates containing excessive amounts of the following
elements may be penalized or rejected: lead, zinc, arsenic, antimony, bismuth, nickel, alumina, fluorine,
chlorine, magnesium oxide, mercury. Lead, zinc, and arsenic levels above 2% each often result in
rejection. For fluxing ores, iron must be less than 3% and the alumina at low levels so that the available
silica fluxing content remains high.
 Moisture: High moisture content may also be penalized due to material handling difficulties.
Notes:
(1) Spot treatment charges since 2008 have fluctuated widely from treatment charges between $5 to $120
per tonne and $0.005 to $1.20 per pound refining. Mid-year 2011 spot contracts were reported lower at
$42 to $44 per tonne.
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MODEL SMELTER SCHEDULE - LEAD CONCENTRATES
Payments
 Lead: Pay for 95% of the lead content at market value, with a minimum deduction of 1.5 to 3.0 units per
dry tonne.
 Gold: Deduct 0.03 to 0.07 troy ounce per dry tonne and pay for 95% of the remaining gold at market
value.
 Silver: Deduct 0.5 to 2.0 troy ounces per dry tonne and pay for 95% of the remaining silver at market
value.
 Copper: Some smelters will pay for as much as 40% of contained copper while at some smelters is
considered deleterious.
Deductions
 Treatment Charge: $210 - $290 per tonne for clean concentrate, based on an LME lead price of $2,500
US/tonne for 2011. Early 2011 contracts settled at $290 per tonne, with silver refining charges at $0.60
to $.75 per ounce, but by May, most of the annual contracts for low-silver, clean concentrates were
settling in the $210 to $230 per tonne range with up escalators of 4-7% and down escalators of 4%, on
par with the 2010 rates. Some of the annual and spot contracts are based on flat rates with no escalators.
 Complex Concentrates: Smelters are charging an additional $50 to $75 per tonne for low-grade, high-
silver, complex or bulk concentrates.
 Refining Charges (1)

$6.00 - $10.00 per ounce of payable gold
$0.50 - $0.75 per ounce of payable silver (2)
Penalties
 Deleterious Element Penalties: Lead concentrates containing excessive amounts of the following
elements may be penalized or rejected: arsenic, antimony, bismuth, nickel, copper, alumina, tellurium,
and mercury. Iron in excess of 10% is also considered deleterious. See individual smelter descriptions
for details.
Notes:
(1) Lead refining charges: These are rarely assessed directly in today's market. They are usually built
into the treatment charges. Additional charges may be assessed in the form of a metal-to-market levy if
the smelter is not located near the lead metal market.
(2) Silver refining charges: These previously ranged from $0.30 to $0.40 per troy ounce of payable
silver. However, with the rise in the silver price, smelters have increased this charge to $0.50 to $0.75
per troy ounce. Some spot contracts are charging up to $1.00 per troy ounce for high silver concentrates
and some Chinese smelters are demanding $3.00 to $4.00 per troy ounce for these concentrates.
SM
MODEL SMELTER SCHEDULE - ZINC CONCENTRATES
Payments (1) (2)
 Zinc: Pay for 85% of the zinc content at market value, with a minimum deduction of 8 units. (This
means that for zinc concentrates grading less than 53.33%, smelters will impose the minimum
deduction.)
 Gold: Deduct 0.01 troy ounce per dry tonne and pay for 60% to 80% of the remaining gold at market
value. (No payment at most plants.)
 Silver: For electrolytic zinc refineries deduct 3.0 to 4.0 troy ounces per dry tonne and pay for 60% to
70% of remaining silver. For ISF smelters, deduct 3.0 to 4.0 troy ounces per dry tonne and pay for 80%
to 90% of remaining silver. (No payment at some plants.)
 Cadmium: No payment unless market conditions warrant. When the price for cadmium is high, smelters
may pay for 60% to 70% of the cadmium content after a deduction of to 0.2 units per dry tonne. On the
other hand, when the price for cadmium is low, some smelters may charge penalties ranging from $1.00
to $4.00 per pound. (4)
Deductions
 Treatment Charge Long-term (annual) contracts were $210 to $230 per dry tonne of concentrate based
on an LME price of $2,500 per tonne for refined SHG zinc in 2011.
 Treatment Charge Escalators: Up escalators of 3-6% at an LME zinc price of $3,000 per tonne of zinc
are generally incorporated into the treatment charges. De-escalators range between 2-5% at an LME
price of $2,000 per tonne for refined zinc.
 Refining Charges (3)

$6.00 - $10.00 per ounce of payable gold
$0.50 - $0.75 per ounce of payable silver
$1.00 - $3.00 per pound accountable cadmium (when payable) (4)
Penalties:
 Deleterious Element Penalties: Zinc concentrates containing excessive amounts of the following
elements may be penalized or rejected: arsenic, antimony, iron, lead, manganese, cobalt, bismuth,
nickel, copper, alumina, germanium, selenium, tellurium, and mercury. See individual smelter
descriptions for details.
Notes:
(1) Lead payments: With one exception, no U.S. or Canadian custom zinc smelters pay for lead in zinc concentrates. In fact, lead may
be considered deleterious at some plants. An integrated lead/zinc plant may pay for about 50% of the lead content after, a deduction of
3.0 units per dry tonne. The only integrated plant in North America is Teck’s facility at Trail, British Columbia.
(2) Copper payments: No payment is made at most plants. Those that do pay for copper have highly variable terms.
(3) Refining charges: Zinc refining charges are rarely assessed, but may be built into the treatment charge. Additional charges may be
assessed in the form of a metal-to-market levy if the smelter is not located near the metal market.
(4) Cadmium pricing: The average price of cadmium for May 2011 was $1.40 per pound. Currently, none of the smelters in our survey
are paying for the contained cadmium.
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SM
2011 Smelter Survey - Canada
Smelter/Plant: Kidd Creek Division - Closed in 2010.

Company: Xstrata Copper Canada (formerly Falconbridge)
Location: Timmins, Ontario
Product: copper
By-products: gold, silver, platinum, palladium, sulfuric acid and zinc
Type of operation: Mitsubishi Continuous Smelting Process.
Annual capacity: Closed: Xstrata permanently ceased operations at its Kidd Metallurgical facilities in June
2010. Copper concentrate production from Kidd mine is now processed by the
Horne smelter and CCR refinery.
Concentrate sources: Until it closed, feed was supplied by the adjacent Kidd Creek zinc-copper-silver mine,
copper concentrates from Sudbury and custom feed materials, including some from the
Collahuasi mine in Chile.
Smelter/Plant: Flin Flon Copper Smelter - Closed in 2010

Company: HudBay Minerals Inc.
Location: Flin Flon, Manitoba
Product: copper
Annual capacity: Permanently closed in July 2010. The age of the plant and regulatory changes made continued
operation of this plant impractical and uneconomic.
Concentrate sources: Prior to closure, approximately 68% of the copper concentrate treated at the smelter came
from HudBay’s 777 and Trout Lake mines in the Flin Flon area and the Chisel North
mine in Snow Lake, Manitoba.
Other comments: HudBay built a filtration plant that enables the company to ship its copper concentrates
off-shore. HudBay has made sales arrangements for its copper concentrates.
Smelter/Plant: Horne Smelter

Company: Xstrata plc
Location: Rouyn-Noranda, Québec
Product: copper
By-products: gold, silver, platinum, palladium and sulfuric acid.
Type of operation: Noranda Continuous Process copper smelter.
Annual capacity: 200,000 tonnes (220,500 short tons) anode copper or 840,000 tonnes (926,000 short tons)
feed. In 2009, the smelter, as a result of the collapse in demand for sulphuric acid and
excessive inventories reduced anode production by 5% to 163,700 tonnes (180,400 short
tons). In 2010, the Horne smelter produced 164,000 tonnes (181,000 short tons) anode copper
and 594,000 tonnes (655,000 short tons) of sulphuric acid.
Capacity utilized: 82%.
Deleterious elements: Arsenic, antimony, cadmium, selenium, bismuth, and tellurium. Limits are imposed on
mercury, lead, zinc, and nickel; and the concentrates must be environmentally acceptable.
(continued next page)
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Smelter/Plant: Horne Smelter (continued)
Concentrate sources: Approximately 30% of the smelter's feed is supplied by former Falconbridge mines, the
balance is acquired from outside sources. The company now processes Kidd Creek mine
concentrates at the Horne Smelter. Xstrata buys copper, silver, gold, and PGM
concentrates; secondaries; residues; recycling materials; flux-bearing ores and sands; and
copper and electronic (precious metal) scrap.
Other comments: In 2006, Xstrata plc acquired all of the assets of Falconbridge Limited, which includes the
former assets of Noranda. Falconbridge and Noranda merged in 2005. Horne was
previously a Noranda operation.
The Horne smelter's flexible system allows it to process copper concentrates, precious
metal-bearing recyclable materials and other complex feed. The bulk of the feed is
processed by a continuous smelting reactor, with the balance going through a concentrate
injection system into the converters. Anodes are sent to Xstrata’s CCR refinery in
Montreal for electrolytic refining and precious metals recovery.
The company completed a voluntary SO2 abatement program in 2001. The abatement
program allows the plant to capture more than 90% SO2. Xstrata is interested in securing
new sources of feed - including clean and complex concentrates and ores; and recyclable
materials.
The company invested C$124 million in the last several years to install a new
recycling furnace and casting equipment to increase copper and precious metals recycling
capacity at its CCR refinery in Québec. The new furnace at CCR will also increase
flexibility at the Horne smelter by allowing the smelter to treat complex materials with
lower copper grades.
Smelter/Plant: Sudbury Division

Company: Xstrata (formerly Falconbridge)
Location: Falconbridge, Ontario
Products: nickel and copper
By-products: gold, silver, platinum, palladium, rhodium, and cobalt
Type of operation: Nickel-copper smelter, consisting of roasters, electric furnaces and converters.
Annual capacity: Output capacity: 130,000 tonnes (143,300 short tons) nickel-copper matte with a
composition of about 55% Ni, 20% Cu, 1%-3% Co, 2% Fe, and 22% sulfur, plus precious
metal credits. In 2009, feed volumes decreased by 8% to 491,824 tonnes due to the
suspension or closure of the Craig, Thayer-Lindsley and Montcalm mines. Nickel in matte
output increased by 2% year-on-year due to higher grade feed from Xstrata Nickel and
a 31% increase in concentrate from Raglan.
The Sudbury smelter reached an annual production record of 73,667 tonnes of nickel
in matte in 2010, a 12% increase over the previous year, due to increased feed volumes,
following the decision to send all of XNA’s mined production to Sudbury to utilize
available capacity fully. Production of copper in matte increased by 21% driven by rich
copper feed from the poly-metallic Nickel Rim South and the restart of the Fraser mine.
Cobalt in matte production increased by 6% due to higher volumes of cobalt-rich feeds.
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Smelter/Plant: Sudbury Division (continued)
Deleterious elements: Deleterious elements include bismuth, cadmium, tellurium, tin, zinc over 1 percent, and
lead over 1 percent. Xstrata can treat concentrates containing up to 0.02% arsenic.
Concentrates containing deleterious amounts of these elements could be rejected.
Concentrate sources: The Craig, Fraser, and Thayer Lindsley mines produced about 40% of the feed for
Sudbury. In 2009, restructuring of the Sudbury operations resulted in the closure of the
end-of-life, higher-cost Craig and Thayer-Lindsley mines and the suspension of the Fraser
Mine complex. However, in 2010, the Fraser mine was restarted.
Xstrata also receives concentrates from North American Palladium’s Lac des Iles
mine in Ontario. The new Nickel Rim South mine in Sudbury commenced full mine
operation in April 2010 and reached nameplate capacity of 1.25 million tonnes ore per
annum in October, six months ahead of schedule. The company has identified sufficient
reserves in the Sudbury area to supply the smelter for at least 20 years.
Other comments: In 2006, Xstrata plc acquired all of the assets of Falconbridge Limited. The matte produced
at Sudbury is sent to an Xstrata-owned refinery in Norway. Gold, silver, platinum, palladium,
and cobalt are recovered and payable. All of the precious metals are refined at the Norway
refinery. Freight charges to Norway are included in treatment and refining charges. The
smelter is continuing to increase its capacity and reduce sulfur dioxide emissions. This
increase will allow Xstrata to process additional concentrates from Raglan and reduce
production costs. These improvements are also expected to reduce emissions and enable
Falconbridge to handle more complex custom feed.
Xstrata is interested in purchasing or custom smelting the following types of concentrates:
nickel concentrates, nickel-copper, and nickel-cobalt concentrates containing at least 12 to 15
percent nickel, or concentrates containing precious metals including gold, silver, and platinum
group metals. The company is also interested in acquiring secondary materials such as
catalysts, metallics, scrap, slag or residues containing nickel, copper or cobalt.
Smelter/Plant: Copper Cliff Smelter

Company: Vale Inco Limited
Location: Sudbury, Ontario
Products: copper, nickel and cobalt
By-products: platinum, palladium, rhodium, gold and silver
Type of operation: Two Inco flash furnaces, sulfuric acid plant, copper and nickel refineries. As of February 2011
the No. 2 furnace was shut down for 16 weeks, cutting finished nickel production by about
15,000 tonnes (16,500 short tons).
Annual capacity: Copper-nickel smelter: 1,300,000 tonnes (1,400,000 short tons) of bulk copper-nickel
concentrates, plus 170,000 tonnes (187,400 short tons) internally generated copper
concentrates. The nickel refinery processes output from the nickel smelter to produce 41,000
tonnes (45,000 short tons) of nickel pellets and 11,300 tonnes (12,500 short tons) of nickel
powder annually. Note: Production was impacted by a strike at Voisey’s Bay and Sudbury
from mid-2009 to January 2011, when a new 5-year contract was ratified.
Capacity utilized: About 80%.
SM
Smelter/Plant: Copper Cliff Smelter (continued)
Concentrate specifications: Vale Inco is only interested in clean concentrates with no appreciable amounts of
arsenic, bismuth, chlorine, lead, zinc, mercury, or antimony. They will not accept
material with zinc levels above 1.0% or with cadmium in any amount.
Concentrate sources: Vale Inco is able to supply all of its concentrate needs from its own operations. In
addition, the company purchases fluxing materials for the Copper Cliff plant. The copper
concentrate Vale Inco processes at Copper Cliff is chalcosite (Cu2S)-rich, generated from
bulk matte production and is usually iron free.
Another source of concentrates for the Sudbury operations is Vale Inco's Voisey’s
Bay deposit in Newfoundland. The Newfoundland government and the company reached
an agreement which will allow the company to develop the mine at Voisey’s Bay and ship
the concentrates to Vale Inco’s Ontario and Manitoba smelters for up to 25 years until a
new smelter can be built. Voisey’s Bay started shipping concentrate in November 2005.
In July 2009, approximately 3,000 workers went on strike at the Voisey Bay mine and
mill. In 2010, the operations were temporarily shut down as the strike continue. Finally,
in January 2011, an agreement was reached that ended the strike. A new Voisey’s Bay
smelter is expected to start-up in 2013.
Other comments: In 2006, Companhia Vale do Rio Doce (Vale) purchased Inco by acquiring all of Inco’s
common shares. The Copper Cliff smelter produces blister copper, nickel sulfide and nickel
oxide from copper-nickel and copper concentrates. The nickel refinery processes output from
the bulk smelter to produce nickel pellets and nickel powder. Precious metals, including semi-
refined platinum, palladium, rhodium, gold, and silver, are recovered from residues and
refined abroad or at Vale Inco's Port Colborne, Ontario nickel refinery.
The company installed a C$115 million fluid bed roaster (FBR) off-gas scrubbing system
technology in 2006. The new technology reduces the SO2 emissions at the plant by 34%. This
technology also has the added benefit of reducing emissions of nickel, copper, arsenic and
lead by 80 to 100 tonnes per year.
To offset concentrate shortfalls, Vale Inco has committed C$46 million to increasing
production at the McCreedy East mine. McCreedy East provides approximately 22,000 tonnes
per year nickel in concentrates and 42,000 tonnes per year copper in concentrates which will
continue over a 15-year mine life. Vale Inco has also discovered several deposits near its idled
Totten mine and Copper Cliff North mine. Two other mines, Copper Cliff North and Copper
Cliff South, will continue to supply low-cost nickel-copper concentrates to the smelter.
Vale Inco pays for cobalt, gold, silver and platinum-group metals in concentrate to the
extent they are recoverable.
SM
Company: Sherritt International Corp.

Cobalt Refining Company Inc. (CRC)
Location: Fort Saskatchewan, Alberta
Products: nickel and cobalt
By-products: copper as copper sulfide, zinc as zinc sulfide
Type of operation: hydrometallurgical refinery and fertilizer plant.
Annual capacity: 33,000 tonnes (36,380 short tons) finished nickel and 3,300 tonnes (3,638 short tons) finished
cobalt. The refinery produced 33,972 tonnes (37,448 short tons) finished nickel and 3,706
tonnes (4,085 short tons) finished cobalt in 2010. Finished metals production reflects the
full-year contribution of Phase 1 expansion assets and increased mixed sulphide availability.
Utilized capacity: 100%+.
Concentrate specifications: Sherritt International is interested in purchasing or tolling feed for this plant and is
fairly flexible in the material it will accept. The company prefers nickel-cobalt sulfide
intermediates with less than 5% copper, but will consider higher copper values.
The Fort Saskatchewan plant also processes nickel sulfide concentrates, cobalt
concentrates, nickel sulfide matte, carbonates, hydroxides, and sulfates. The company
will pay a higher unspecified percentage of the contained cobalt in a cobalt
concentrate than the standard pay for cobalt in a nickel concentrate. They prefer the
cobalt concentrate to be a minimum of 10 percent cobalt in sulfides, carbonates,
sulfates, hydroxides or oil-free residues.
Concentrate sources: Most of the concentrates for the Fort Saskatchewan plant are imported from Cuba’s Moa
Bay lateritic nickel and cobalt operations, 50% owned by Sherritt.
Deleterious elements: The refinery has limited tolerance for the following elements. Tolerance limits depend on
chemical form, quantity and reactivity in the process. Nickel sulfates: arsenic (0.3%),
antimony (0.15%, selenium (0.01%), tellurium (0.05%), acid (15%), moisture (30%).
Other forms: Specification for iron, zinc, cadmium, calcium, and chrome depend on
quantity and form of material, and may affect terms. All materials should be oil-free.
Excessively moist (freezing) or dry materials (dust) are undesirable.
Other comments: Sherritt International’s cobalt extraction facility at Fort Saskatchewan handles high
cobalt-bearing nickel concentrates. Refinery capacity is 33,000 tonnes nickel and 3,300
tonnes cobalt.
In 1994, Sherritt formed a 50-50 Moa Joint Venture with a Cuban company, La
Compania General de Niquel S.A. (General Nickel Company) to mine, process, refine and
market cobalt and nickel. The joint venture includes production from General Nickel's
Moa Bay nickel laterite processing plants and mines, as well as Sherritt's Fort
Saskatchewan facility. The Moa Bay plant produces nickel and cobalt from mixed sulfide
concentrates grading 55% nickel and 5% cobalt. The company is currently increasing
production at Moa Bay. Commissioning of Phase 1 was completed in 2008 at Moa Bay
adding 4,000 tonnes (4,400 short tons) per year of mixed sulfide capacity. Phase 2 was
planned to increase production to at least 49,000 tonnes (54,000) per year, originally
scheduled to go on line in 2010. However, further capital contributions were suspended
in late 2008 due to deteriorating market conditions.
SM
Smelter/Plant: Thompson Smelter

Company: Vale Inco Limited
Location: Thompson, Manitoba
Products: electrolytic nickel, cobalt oxides and copper in matte
By-products: platinum, palladium, rhodium, gold and silver
Type of operation: Electric furnaces, Peirce-Smith converters, and electrolytic nickel refinery.
Annual capacity: The Thompson operations consist of a smelter with an overall annual capacity of 109,000
tonnes (120,000 short tons) of nickel and copper as matte, and an adjacent electrolytic nickel
refinery with an annual capacity of 54,000 tonnes (60,000 short tons) of refined nickel. Feed
capacity of the smelter is linked to allowable SO2 emissions.
Capacity utilized: 60%. (Smelter operates at about 90% of allowable capacity based on SO2 emissions.)
Concentrate specifications: Vale Inco accepts concentrates with low levels of deleterious elements and a
nickel/copper ratio of at least 15 to 1. A company spokesman indicated that Vale
Inco is actively seeking toll concentrates and high-nickel revert materials. Revert
nickel-bearing materials are becoming a significant portion of the feed for the
Thompson smelter. Following are the specifications for materials accepted:
• Ni content > 10% • No Hg or Tl.
• Ni:Cu ratio > 15:1 • Ni:As ratio > 150:1
• Low levels of Pb, Zn, Sn, and Cd.
Concentrates with deleterious levels of arsenic, bismuth, lead, mercury, cadmium, and
antimony are not accepted at Thompson, nor are materials with zinc levels above
1.0%. The capacity to process chrome-bearing materials is limited to roughly one ton
total per day.
The company also accepts filter cakes, preferably dried but not dusty; spent
catalysts provided they do not contain volatile organic compounds; and grindings and
scrap. Very clean nickel and cobalt precipitates can be processed in the refinery.
Penalties are charged for excessive water (>40%) in filter cakes.
Concentrate sources: Vale Inco feeds this complex primarily from its Birchtree underground nickel-copper mine
and secondary materials. One source of concentrates for the Thompson operations is Vale's
Voisey’s Bay deposit in Newfoundland. The Newfoundland government and Inco reached an
agreement which will allow Vale Inco’s Voisey Bay mine to ship the concentrates to Vale
Inco’s Ontario and Manitoba smelters for up to 25 years until a new smelter can be built.
Voisey’s Bay started shipping concentrates in November 2005. The new smelter in Voisey’s
Bay is scheduled to start in 2013.
Other comments: In 2006, Companhia Vale do Rio Doce (Vale ) purchased Inco by acquiring all of Inco’s
common shares. Vale Inco processes mainly nickel concentrates with contained copper at the
Thompson smelter. Nickel and nickel-copper concentrates are received as slurries, which are
thickened, filtered, and partially roasted in fluid bed roasters. The calcines are then smelted
in electric furnaces and the resulting furnace matte is then converted in Peirce-Smith
converters. The nickel matte is cast into anodes to supply the electrolytic refinery.
The copper-nickel matte is cast into 25-ton slow cooled ingots for shipment to Vale Inco's
Sudbury complex where it is refined. This operation also produces precious metals. Gold,
silver, platinum, palladium, and rhodium are concentrated in the 25-ton ingots. Vale Inco pays
for cobalt, platinum, palladium, gold and silver if present in high enough quantities and
identified in advance.
Vale Inco spent $43 million to deepen the Birchtree mine, thereby extending the mine's
life by at least 15 years. As production decreases at both the Manitoba and Ontario divisions,
the company will be seeking additional outside concentrates.
SM
Smelter/Plant: Brunswick (Belledune) Smelter

Location: Belledune, New Brunswick
Product: lead
By-products: gold, silver, antimony bullion, bismuth-lead alloy, copper matte, copper speiss, and sulfuric
acid.
Type of operation: lead sintering plant, lead smelter, lead refinery and sulfuric acid plant.
Annual capacity: 110,000 tonnes (121,000 short tons) refined lead, 400 tonnes (441 short tons) silver doré. In
2010, the smelter produced 85,300 tonnes (94,000 short tons) refined lead and 406 tonnes
(447 short tons) of silver. The smelter also produces over 100,000 tonnes (110,000 short
tons)/year of sulphuric acid.
Utilized capacity: Approximately 75%.
Deleterious elements: Belledune can handle higher levels of bismuth, cadmium, antimony, and sulfur than most
of the lead smelters in North America because it was designed to handle the complex lead
concentrates containing silver and gold produced by the Brunswick mine. Deleterious
elements include arsenic, mercury, bismuth, cadmium, antimony, and nickel. Mercury is
considered deleterious even at low levels.
Concentrate sources: About 60% of the feed for Belledune is supplied by the Brunswick lead-zinc mine owned
by Xstrata. The remainder comes from outside sources, including concentrates from Peru.
Recyclable feeds such as spent lead acid batteries, refining drosses from other smelters,
lead metal scrap and lead-contaminated materials are also processed at the Brunswick
smelter. About 39% of the smelter feed is recycled material. Xstrata is interested in
purchasing or tolling lead concentrates and secondaries for the Brunswick plant. The
company pays for silver and gold contained in lead concentrates.
Other comments: The Brunswick smelter was originally operated by Noranda. In 2006, Xstrata plc acquired all
of the assets of Falconbridge Limited, which also includes the assets of Noranda.
The complex consists of a lead sintering plant, a lead smelter, a lead refinery, and a sulfuric
acid plant. Falconbridge also installed two secondary furnaces at Belledune to handle lead
recycling. In 1996, the company reassembled its battery breaker at Brunswick, to boost lead
production by about 15,000 tonnes per year. The secondary portion can process between
200,000 and 400,000 batteries a year and is currently operating at essentially full capacity.
The growth in custom smelting prompted the addition of a new blast furnace in 1999 and a
silver refinery in 2000.
Xstrata currently operates the smelter on a seasonal schedule, operating 9 to 10 months out
of the year. The shut-down is necessary to maximize the operations in the face of global
concentrate shortages. This allows the company to operate at full capacity when concentrates
are readily available. The future of the smelter is in doubt as its main supplier, the Brunswick
lead-zinc mine, will be depleted by the end of 2010, but a plan to expand production at its
McArthur River lead and zinc mine in the Northern Territory, Australia, also includes the
upgrading the Brunswick lead smelter.
SM
Smelter/Plant: Trail Lead Smelter

Company: Teck Ltd. (Teck Cominco was renamed Teck Resources Ltd. in 2009 and later simply Teck)
Location: Trail, British Columbia
Products: lead and lead-arsenic-antimony alloys
By-products: gold, silver, bismuth, copper sulfate, copper arsenate and sodium antimonate.
Type of operation: Kivcet lead smelter and refinery, silver refinery (also see Trail Zinc Plant)
Annual capacity: 120,000 tonnes (132,000 short tons) refined lead. The silver refinery has a capacity of about
20 million troy ounces per year. Teck produced 71,500 tonnes (78,800 short tons) refined
lead and 19.9 million troy ounces silver in 2010.
Problematic elements: Elements that may interfere with the current lead smelting operation include alumina,
copper, zinc, tellurium, tin, mercury, arsenic, antimony, and bismuth.
Concentrate sources: Teck’s Red Dog Mine in Alaska provides about half of the lead concentrates for the lead
smelter. The remainder is purchased from sources in North and South America. Teck
produces about 15% of it’s lead from scrap such as lead-acid batteries. About 2 million car
batteries are processed each year at the Trail plant. The company also recycles precious
metals scrap from computers and other electronics. The company prefers high gold/silver
content, but also handles tolerable levels of bismuth and copper in the lead concentrates.
They pay for 85-95% of the contained gold and silver after deductions and are also
interested in purchasing silver/gold-bearing silica ores for fluxing material.
Other comments: The facility at Trail, B.C. is the only integrated zinc-lead smelter complex in North America.
Current production capacity at Trail represents 5% of the western world's refined zinc and 3%
of the western world's lead output. The complex produces chiefly zinc, lead, silver, gold, and
byproduct indium, cadmium, germanium, bismuth, copper sulfate, copper arsenate, sodium
antimonate and a range of sulfur products.
In 1995, the company began construction of a new Kivcet lead smelter and a slag fuming
plant at Trail. After numerous start-up problems and subsequent modifications, the lead
smelter came on-line in 1997. The smelter replaced the original sinter and blast furnace
smelter which continued to operate while the Kivcet smelter was being constructed. The new
smelter has lowered lead and sulfur dioxide emissions by 75% and particulate emissions by
90%. In addition, the Kivcet process enables Teck to process complex concentrates, as well
as zinc plant residues and lead battery scrap. The company can meet most of the new smelter's
supply requirements from its own mines and stockpiled material, however, significant
capacity is filled with custom concentrates.
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Smelter/Plant: Valleyfield
Company: Canadian Electrolytic Zinc (CEZinc/Xstrata)
Location: Valleyfield, Québec
Product: zinc, sulphuric acid
Type of operation: Electrolytic zinc refinery.
Annual capacity: 296,000 tonnes (326,000 short tons) zinc and 475,000 tonnes (524,000 short tons) of sulfuric
acid. The CEZ Refinery produced 290,000 tonnes (320,000 short tons) cathode zinc in 2010
and 371,800 tonnes (409,800 short tons) of sulphuric acid in 2010.
Utilized capacity: 98%.
Deleterious elements: The plant can handle iron contents up to 14%. Deleterious elements include copper above
1%, lead above 2%, manganese above 1%, and cobalt.
Concentrate sources: The CEZinc refinery processes concentrates from the Brunswick and Antamina mines
which account for about 80% of its concentrate needs. The balance is sourced from third-
party materials. Xstrata’s new Perserverance mine began shipping concentrates to CEZinc
in 2006. Perserverance concentrates are expected to displace some of the Brunswick
mine’s zinc concentrates, making more of the Brunswick material available for export to
Europe. Traditionally, Brunswick has supplied one-third to one-half of its production to
CEZinc, exporting the rest to Europe. Xstrata could also increase imports of Antamina
material.
Other comments: Modernization of the CEZinc refinery included a C$44 million upgrade to add an
environmentally sound cementation process that fixes jarosite residues in an inert, solid, non-
leachable state. The Jarofix process allows CEZinc more flexibility in the concentrates it can
process. Capacity at CEZinc has steadily increased from 255,000 (281,000 short tons) tonnes
in 1998 to 296,000 (326,000 short tons) tonnes in 2010.
The company spent C$22 million to increase plant capacity to 275,000 tonnes (303,000
short tons) per year in 2007. Noranda sold its interest in CEZinc in 2002 to the Noranda
Income Fund. In June 2005, Noranda merged with Falconbridge to form Falconbridge
Limited. In 2006, Xstrata plc acquired all of the assets of Falconbridge Limited, which also
included the assets of Noranda. Xstrata currently owns 25% of the income fund and continues
to manage the facility. The company has a 15-year agreement to supply and process 550,000
tonnes (606,000) zinc concentrates per year at the CEZinc plant.
CEZinc prefers low iron concentrates with the following specifications: 52% zinc, <10%
iron, and 32% sulfur. Iron is penalized $2.00 for every 1% above 8%. The company pays for
85 percent of the contained zinc with an 8 units per ton minimum deduction. All materials are
evaluated before acceptance. Concentrates containing precious metals are not usually
considered for processing at Valleyfield because precious metals are not recovered. Lead
levels above 1% are also penalized. The company is also interested in high zinc or sulfur
bearing materials.
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Smelter/Plant: Trail Zinc Plant

Company: Teck Ltd. (Teck Cominco shortened its name to Teck in 2009 and later simply Teck)
Location: Trail, British Columbia
Product: zinc and zinc alloys
By-products: Germanium, indium, cadmium, sulfuric acid, liquid SO2, elemental sulfur and ammonium
sulfate fertilizers.
Type of operation: Electrolytic zinc refinery. (Also see Trail Lead Smelter)
Annual capacity: The electrolytic zinc refinery currently has an annual capacity of 300,000 tonnes (331,000
short tons) of refined zinc. Teck produced 278,300 tonnes (306,800 short tons) refined zinc
in 2010.
Feed materials: Teck accepts concentrates grading between 50 and 60 percent zinc, with sulfur in the 30
percent range. Low levels of copper can be processed, but the smelter does not pay for it.
Problematic elements: Cobalt, nickel, antimony, arsenic, silica, iron and mercury.
Deleterious elements: Fluorine, chlorine.
Concentrate sources: Teck’s Red Dog Mine in Alaska provides about 150,000 tonnes (165,000 short tons) per year
zinc-in-concentrate to the Trail facility. The balance is acquired from outside sources,
including the Lucky Friday mine in Idaho. The recent discovery of new reserves at Red Dog
guarantee a steady supply of much of the Trail plant's needs.
Other comments: Teck recovers silver and gold from zinc concentrates and pays for a market dictated
percentage of the contained gold or silver after deductions based on grade. The Trail plant
is one of the few smelters that will pay for precious metals in zinc concentrates.
The company acquired the Pend Oreille zinc-lead mine in northeastern Washington state
in 1996, which last produced in 1977. Teck spent about US$70 million to refurbish the mine,
mill and concentrator and sink a 1,250-foot shaft reopening the mine in 2004. In December
2008, the company announced a temporary shut down of the Pend Oreille mine. This mine
was transitioned to care and maintenance in February 2009.
In 2001, Cominco merged with Teck Corporation to form Teck Cominco Ltd which is
now simply Teck.
Smelter/Plant: Kidd Creek Division - Closed in 2010

Location: Timmins, Ontario
Product: zinc
By-products: cadmium, indium and gold
Annual capacity: Closed: Xstrata permanently closed the Kidd Metallurgical facilities in June 2010.
Deleterious elements: Cobalt, nickel, antimony, arsenic, bismuth, iron, and mercury.
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Smelter/Plant: Flin Flon Zinc Plant

Company: HudBay Minerals Inc.
Location: Flin Flon, Manitoba
Product: zinc
Type of operation: Dynatec (formerly Sherritt) Zinc Pressure Leach (ZPL) plant
Annual capacity: 115,000 tonnes (128,000 short tons) refined zinc. In 2010, HudBay produced 104,941 tonnes
(115,700 short tons) refined zinc. Refined zinc from concentrate was 74,083 tonnes (81,790
short tons) in 2010 but the company expects to produce 115,000 tonnes in 2011.
Capacity utilized: Currently 100%.
Deleterious elements: Elements deleterious to the Flin Flon zinc refinery include copper greater than 1.0%, iron
greater than 10.0%, antimony, arsenic, bismuth, nickel, cobalt, and mercury.
Concentrate sources: The majority of the zinc plant feed comes from the HudBay’s mines in the Flin
Flon/Snow Lake area, augmented by about 10% in purchased concentrates. Total
domestic mill production (contained metal in concentrate) was 77,314 tonnes (85,224
short tons) in 2010. Production guidance for 2011 stands at 70,000 to 90,000 tonnes
(77,000 to 99,000 short tons).
Other comments: The copper smelter adjacent to the zinc refinery at Flin Flon closed July, 2010. In addition,
the company currently operates the 777 mine and Trout Lake mine in Flin Flon and the
Chisel North zinc mine in Snow Lake, Manitoba.
HudBay Minerals, Inc. purchased Hudson Bay from Anglo American for C$325 million
in 2004.
Smelter/Plant: Endako Molybdenum Roaster

Company: Thompson Creek Metals Co.(75%), Sojitz Moly Resources, Inc. (25%)
Location: Endako, British Columbia
Product: molybdenum oxide
Type of operation: Gas-fired multiple-hearth roasting facility that converts the concentrate into technical grade
molybdenum oxide. There are two roasters installed at the Endako Mine. One is
decommissioned and would require capital expense to re-commission. The operating roaster
usually produces 30,000 to 35,000 pounds of molybdenum per day.
Capacity: 40,000 to 50,000 pounds per day from one roaster. In 2010, the Endako operation produced
about 10 million pounds contained molybdenum. Production from the expanded operations
is expected to yield 15 to 16 million pounds contained molybdenum starting in 2011.
Capacity utilized: About 70%.
Concentrate specifications: Concentrates must be low in arsenic and meet the following specifications:
Mo > 52.0% Pb < 0.03% H2O + oil < 10.0%

Cu < 0.20% Bi < 0.03%
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Smelter/Plant: Endako Molybdenum Roaster (continued)
Concentrate sources: Feed for this roaster comes primarily from the adjacent Endako mine. Thompson Creek
announced plans in 2008 to expand the Endako mine from 31,000 tonne (34,000 short
tons) per day to 55,000 tonnes (66,600 short tons) per day ore beginning in 2010. While
the expansion project was suspended in December 2008 in response to the economic
downturn, it was resumed in August 2009. Construction of a new mill building and
installation of new processing equipment is expected to be completed by the end of 2011.
The expansion will increase molybdenum to about 16 million pounds per year. The plan
involves joining three pits into one large super-pit and will include a modernization of the
mill, a new flotation circuit and an upgraded roaster circuit. Without the expansion, the
company estimates that the annual molybdenum production would fall to 8 million
pounds per year.
Other comments: In 2006, Blue Pearl Mining Ltd. purchased the privately held Thompson Creek Metals
Company. Blue Pearl changed its name to Thompson Creek Metals Co. in May 2007. The
Endako complex was previously sold by Placer Dome Canada Ltd. to Thompson Creek
Metals Co. and Sojitz Moly Resources, Inc. (previously Nissho Iwai) in 1997. Placer Dome
had upgraded the Endako leaching sector and installed an improved pollution control system
for flue gases in 1993. The company installed an in-pit crusher and conveyor system in 2000
to cut haulage costs and streamline the flow of material to the mill.
The company presently feeds the roaster from a number of sources, which may include
its Idaho operation as well as Endako. The facility produces concentrates and moly oxide.
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2011 Smelter Survey - United States
Smelter/Plant: Hayden Smelter (Ray complex)

Company: Asarco (Grupo Mexico)
Location: Hayden, Arizona
Product: copper
By-products: gold and silver
Type of operation: Inco flash furnace
Annual capacity: 208,000 tonnes (229,000 short tons) anode copper and 563,000 tonnes (620,500 short tons)
sulfuric acid. The smelter can process 653,000 tonnes per year (720,000 short tons)
concentrates. The Hayden smelter produced 158,900 tonnes (175,200 short tons) copper in
anodes in 2010. Anodes produced at the smelter are shipped to the Amarillo Copper
Refinery.
Concentrate sources: Feed for the plant comes from Asarco's Ray and Mission mines.
Concentrate requirements: Lead, zinc, arsenic, antimony, bismuth, nickel, alumina, and mercury are considered
deleterious elements subject to penalties at Hayden. Asarco has sufficient in-house
feed for this smelter, however, the company is interested in purchasing or tolling
limited quantities of ores and concentrates containing gold, silver and copper, with
the following specifications.
Concentrates: 25-35% copper, low impurities

Blister: 98% copper
Siliceous flux: 92% SiO2, <5% Al2O3
Other comments: In November 1999, Grupo Mexico C.V. de S.A. purchased all of the outstanding shares of
Asarco, acquiring all assets including the Arizona operations. The 208,000 tonne (230,000
short ton) per year Hayden plant was modernized in 1983 in a $130 million project to install
an Inco flash furnace and bring the plant into compliance with air emission standards. An
electric arc slag cleaning and revert melting furnace was added in 1989. In 1996, Asarco
completed a $10 million upgrade of the Hayden smelter and concentrator. The modernization
of the smelter included expansion of the pollution control equipment to further reduce
particulate emissions. As a result, the plant produces 563,000 tonnes (620,500 short tons) of
sulfuric acid each year, of which about half is used in Asarco's leaching operations, and the
rest is sold. Modernization of the smelter's gas handling system and process control
equipment was completed in 1998. These improvements were expected to further increase
production and reduce operating costs. The Hayden smelter is operating at about 75%
capacity.
The Hayden smelter receives most of its feed from the nearby Mission and Ray mines,
which are currently operating at full capacity.
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Smelter/Plant: Utah Copper Division Smelter

Company: Kennecott Utah Copper Corporation (Rio Tinto plc)
Location: Garfield, Utah
Product: copper
By-products: gold, silver, molybdenum and sulfuric acid.
Type of operation: Integrated mining, concentrating, smelting, copper and precious metals refining, and
molybdenate concentrate production. Parent company, Rio Tinto, will invest $350 million
in the construction of a molybdenum autoclave in Magma, Utah that will allow lower grade
concentrates to be processed more efficiently than through conventional roasters with the
added benefit of recovering rhenium. Full production of 30 million pounds molybdenum is
scheduled for the end of 2013.
Annual capacity: The smelter has a design capacity of 1.0 million tonnes (1.1 million short tons) copper
concentrates to produce 335,000 tonnes (369,000 short tons) per year copper in anodes. The
refinery has a capacity of 281,000 tonnes copper cathodes. In 2010, the Garfield Smelter and
refinery produced 269,000 tonnes (296,500 short tons) refined copper and 596,000 troy
ounces of gold.
Concentrate sources: The Bingham Canyon mine supplies the feed for the smelter. In 2010, the mine produced
249,800 tonnes (275,400 short tons) of contained copper in concentrates. Bingham Canyon
ores are processed by the Copperton Concentrator which produces about 825,000 tonnes
(909,000 short tons) concentrate annually.
Bingham has produced excess concentrates in the past, allowing Kennecott to sell the
surplus. When copper prices improved in 2007 and 2008, Kennecott stopped selling
concentrates, preferring to operate the smelter at higher rates. Any future needs can be met
by either expanding the Copperton mill or purchasing outside material.
Other comments: The smelter employs Outokumpu's flash process followed by a second-stage flash
converting system. Flash converting is a new technology, developed by Kennecott and
Outokumpu, allowing direct conversion of solid copper matte to blister copper. The process
replaces the Peirce-Smith converters and uses a single oxygen flash furnace that operates
continuously. The new modernized refinery utilizes Falconbridge Ltd.'s Kidd process
technology, which involves permanent stainless steel starting sheets and automated
stripping equipment.
The flash smelter, flash converter and double contact acid plant allows Kennecott to
capture 99.9% of contained sulfur, up from 94% capture in 1994, far exceeding Utah's air
quality requirements. Emissions are less than 3.5 kg (7.7 lbs) of SO2 per ton of copper.
Other benefits include decreased water consumption and reduced energy requirements
because electricity is generated from recovered heat. Kennecott also plans to upgrade the
existing 12 million pounds per year molybdenum recovery plant and expand it by at least
15%, and they are considering producing molybdenum oxide via a new hydrometallurgical
process.
Kennecott spent $170 million to expand the eastern pit wall at Bingham Canyon, which
will extend the mine life an additional 5 years to 2017. Future development also includes
$110 million for smelter maintenance and upgrades, plus expansion of the Copperton
concentrator. Planners are also exploring the feasibility of moving to underground
operations in the future.
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Smelter/Plant: Miami Smelter

Company: Freeport-McMoRan Copper & Gold Inc. (formerly Phelps Dodge)
Location: Miami, Arizona
Product: copper
By-products: gold, silver and sulfuric acid
Type of operation: Isasmelt copper smelter (primary furnace); ELKEM electric furnace (secondary); four
Hoboken style converters, two oxygen plants; and an acid plant treating all process gases.
Annual capacity: Copper smelter: 700,000 tonnes (772,000 short tons) copper concentrate, 165,000 tonnes
(182,000 short tons) copper. Electrorefinery: 200,000 tonnes (220,000 short tons) refined
copper. In 2010, the smelter processed approximately 625,000 tonnes (689,000 short tons) of
concentrate. Sulphuric acid is a by-product of smelting concentrates, and the Miami smelter
is the most significant source of sulphuric acid for the U.S. Freeport leaching operations.
Concentrate specifications: Lead, zinc, arsenic, antimony, bismuth, cadmium, nickel, selenium, moisture,
alumina, magnesium oxide, fluorine, and chlorine are considered deleterious and
result in rejection or penalty charges. Concentrates containing mercury above 20 ppm
may be rejected. Silica flux specifications are: SiO2 > 90% ($3/ton penalty for each
% below 90%, minimum allowable 88%); Al2O3 <3% and Fe <3% ($3/ton penalty for
each % above 3% for either Al2O3 or Fe, maximum allowable 5%). Copper-gold-
silver values must be sufficient in fluxing material to provide payable metals after
costs. Flux must also be low in volatile metals and impurities as listed above for
copper concentrates.
Concentrate sources: The Miami smelter processes concentrates from the Bagdad, Morenci and Sierrita mines.
While the company has adequate concentrates to supply its needs from its own mines,
Freeport is interested in purchasing metal-bearing flux material, scrap copper, smelter
secondaries (reverts), cement copper and copper concentrates. The company pays for gold and
silver, as well as copper, in concentrates.
Other comments: Once considered the least efficient smelter in the U.S., the Miami complex is now highly
efficient and environmentally sound after completion in 1992 of a $100 million modernization
project including installation of a new Isasmelt furnace. Originally owned by Cyprus Minerals
Company, the smelter was acquired by Phelps Dodge in 1999.
Phelps Dodge was purchased by Freeport McMoRan Copper and Gold, Inc. in March
2007.
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Smelter/Plant: Glover Smelter (Care and maintenance)

Company: The Doe Run Company
Location: Glover, Missouri
Product: lead
Type of operation: lead smelter

Doe Run is hoping to introduce a new smelting technology in mid-2013. The process would
eliminate the traditional high-temperature furnace and replace it with a wet chemical process
that would recover up to 99% of the lead concentrate.
Annual capacity: Plant capacity is 124,300 tonnes (137,000 short tons) of lead per year. In 2003, the smelter
produced 122,500 tonnes (135,000 short tons) of lead before shutdown. Citing poor lead
demand in the U.S. and market conditions, Doe Run suspended operations indefinitely at the
Glover plant on December 1, 2003. The smelter is currently on care and maintenance and all
required permits have been kept up.
Utilized capacity: Suspended.
Concentrate sources: When operating, 90% of Glover's feed is supplied by the Sweetwater and West Fork
mines. The rest is provided by outside sources. Closure of the Glover smelter has allowed
Doe Run to sell some of its Missouri concentrates to China.
Concentrate requirements: When operating, the smelter purchased occasional small lots of high grade lead
concentrate. Arsenic, antimony, nickel, mercury, alumina, and especially bismuth are
considered deleterious. Maximum acceptable bismuth content is 8 ppm. In addition
to lead, the smelter pays for gold and silver in concentrates.
Other comments: In 1997, Asarco completed a $16 million modernization project at Glover to meet current
environmental controls on air and water emissions. With the completion of this project, the
Glover smelter met all federal air standards in 1997 and increased its refined lead production
by 4.5% over the previous year.
In 1998, The Doe Run Company purchased the southeast Missouri assets of Asarco for
$55 million plus royalties. The purchase included the Glover smelter and refinery and the
West Fork and Sweetwater underground mines. Doe Run operates 4 mines and the
Herculaneum primary lead smelter in Missouri.
Since the smelter was placed on care-and-maintenance in 2003, the company has kept all
permits current in anticipation of a future restart. The company is interested in purchasing or
tolling clean lead concentrates for both this facility, when operating, and the Herculaneum
smelter.
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Smelter/Plant: Resource Recycling Division (formerly Buick Lead Smelter)

Location: Boss, Missouri
Product: lead
By-product: tin, sodium sulfate, polypropylene, and copper
Type of operation: reverberatory furnace, blast furnace and rotary melter
Annual capacity: 140,000 tonnes (155,000 short tons) per year of secondary lead. In 2009, the Resource
Recycling Division processed more than 13.5 million lead acid batteries plus other recycled
materials to produce 128,625 tonnes (141,786 short tons) of finished lead metal in 2009,
compared to 135,314 tonnes (149,159 short tons) in 2008.
Material specifications: Doe Run is interested in purchasing lead residues, sludges, fumes, slags, sulfates, oxides,
scrap, batteries, communication and electrical transmission cable, and Superfund clean-up
soils and materials.
Other comments: Doe Run is hoping to introduce a new smelting technology in mid-2013. The process would
eliminate the traditional high-temperature furnace and replace it with a wet chemical process
that would recover up to 99% of the lead concentrate.
In 1991, Doe Run broke the first battery at its new Buick Resource Recovery Division.
This division was created by converting the idled Buick smelter to secondary lead recycling.
The secondary smelter utilizes a reverberatory furnace and an environmentally sound
technology to recover lead from automobile and industrial batteries, as well as from other
lead-bearing scrap material.
Doe Run no longer has the capability to process primary concentrates at the Buick facility.
Concentrates from the Buick mine are processed at the Herculaneum smelter.
Doe Run plans to increase battery breaking capacity, secondary smelting capacity and
anhydrous sodium sulfate capacity. The company recovers and pays for antimony, tin and
arsenic in addition to lead.
Smelter/Plant: Herculaneum Smelter

Location: Herculaneum, Missouri
Products: lead, lead alloys
By-products: sulfuric acid, copper matte and lead-silver bullion
Type of operation: conventional blast furnaces, lead refinery, acid plant and lead strip plant. The company said
it will end operations at the lead smelter, by Dec. 31, 2013 at which time it plans to introduce
a new hydrometallurgical technology.
Annual capacity: 181,400 tonnes (200,000 short tons) of lead per year, along with lead-silver bullion, sulfuric
acid, copper matte, and dross slag. The company has agreed to a refined lead production limit
of 118,000 tonnes (130,000 short tons) until closure to limit sulphur dioxide emissions.
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Smelter/Plant: Herculaneum Smelter (continued)
Concentrate sources: The company has adequate in-house concentrate sources from its Missouri mines to feed
the Herculaneum smelter without purchasing or tolling outside concentrates. The purchase
of Asarco's Glover smelter and two Missouri mines allows Doe Run further flexibility in
smelter feed sourcing and utilization. In 2004, closure of the Glover smelter allowed Doe
Run to sell concentrates to China, taking advantage of the historically low spot lead
treatment charges.
Concentrate requirements: The company is interested in purchasing or tolling clean lead concentrates with very
low cadmium, antimony, bismuth and arsenic, and no mercury. In addition to lead,
the company pays for silver in concentrates depending on individual contracts.
Other comments: Doe Run will introduce a new smelting hydrometallurgical technology lead plant at
Herculaneum in mid-2013. The company hopes to build a plant for a more environmentally
friendly lead-producing technology. That technology relies on a wet chemical process that
would essentially replace the heat-based smelting and would recover up to 99% of the lead
concentrate.
The Herculaneum lead smelter is the largest in the U.S. with a nameplate capacity of
225,000 tonnes (248,000 short tons) of refined lead per year. Currently it is the only primary
lead smelter operating in the U.S. Doe Run was originally a joint venture between St. Joe
Minerals and Homestake. The company was later acquired by Fluor Corporation, which sold
it to The Renco Group in April 1994. The sale included the Herculaneum smelter, the Buick
secondary smelter, six mines, and four mills in Missouri. The company is the largest U.S.
producer of primary lead. In 2006, Doe run invested $2 million to further reduce emissions.
Herculaneum also modernized its sulfuric acid recovery system. The company sells its acid
to plastics, paper, fertilizer and pharmaceutical industries.
While the Herculaneum smelter processes primary ores and concentrates, the Buick
Secondary Resource Recovery unit can take low grade lead feeds from recycling lead units
and/or remediation of soils, sludges, fumes, and slags.
Smelter/Plant: Sauget Zinc Refinery (Care & maintenance)

Company: Big River Zinc Corporation (ZincOx Resources plc.)
Location: Sauget (E. St. Louis), Illinois
Product: zinc
By-products: lead, silver, cadmium and sulfuric acid
Annual capacity: Rated capacity of 110,000 tonnes (121,000 short tons) zinc per year and 136,000 tonnes
(150,000 short tons) commercial grade sulfuric acid.
Utilized capacity: Care & maintenance: 82% for 2005, the plant closed in 2006 and planned to reopen as a
recycling facility in 2008. The development of the Ohio Recycling
Project (ORP) is currently on hold pending a new funding plan.
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Smelter/Plant: Sauget Zinc Refinery (continued)
Concentrate sources: Traditionally, Big River Zinc (BRZ) relied on zinc sulfide concentrates from local mines
and late from Tennessee, Missouri, Mexico, Canada, Peru and other overseas locations.
During the period of low zinc prices from 2002 to 2004, the local mines closed and Big
River became increasing dependent on expensive spot market concentrates. After ZincOx
acquired the plant in 2006, the company developed plans to process zinc oxide
concentrates (HZO) produced at their recycling operations.
Other comments: In December 2005, the company announced that the BRZ plant would be closed indefinitely
in February 2006. Big River cited low treatment charges, worldwide concentrate shortages
and high transportation and labor costs. In June 2006, ZincOx acquired the BRZ smelter, in
Sauget, Illinois.
In 2007, ZincOx Resources plc completed pre-feasibility studies on an integrated zinc and
iron recycling project which will include the new facility in Ohio, the ORP, and modifying
and refurbishing the BRZ plant near St Louis.
Zinc and lead contained in HZO produced by the company's new ORP facility will be
sent to the BRZ plant to recover zinc and other valuable metals. The ORP plant was expected
to begin operation in 2008 at a cost of $179 million, but is currently on hold due to low zinc
prices and the economy. The ORP ultimately will comprise a rotary hearth furnace and a
submerged arc electric melter. It is planned to treat 200,000 tonnes per year of electric arc
furnace dust (EAFD) containing an average grade of about 24% zinc. ORP will produce
70,000 tonnes (77,000 short tons) per annum of a lead bearing zinc oxide concentrate (68%
zinc), together with 56,000 tonnes (62,000 short tons) per annum of pig iron and 55,000
tonnes (61,000 short tons) per annum by-product slag.
Most of the BRZ plant is on care and maintenance, but has a small and fully permitted
washing plant. ORP’s zinc oxide concentrate is high grade, however, it contains halides
(chlorides and fluorides) that are poisonous to conventional smelters. The halides will be
removed from the zinc concentrate by washing at the BRZ electro-refinery facility. The
interim strategy is to sell the washed product to existing zinc refineries, but ultimately the
BRZ facility will be refurbished so that metal may be produced from this concentrate.
Smelter/Plant: Clarksville Zinc Refinery

Company: Nyrstar
Location: Clarksville, Tennessee
Product: zinc
By-products: cadmium, germanium, and sulfuric acid
Type of operation: Smelter and electrolytic zinc refinery
Annual capacity: 125,000 tonnes (137,800 short tons) per year electrolytic zinc. Full production was restored
in July, 2009 when the refinery produced about 94,000 tonnes (104,000 short tons) refined
zinc and 1,119,000 tonnes (1,233,000 short tons) sulfuric acid. In 2010, the smelter and
refinery produced 120,000 (132,000 short tons) tonnes of zinc and 1,444,000 tonnes
(1,592,000 short tons) sulfuric acid for the year.
SM
Smelter/Plant: Clarksville Zinc Refinery (continued)
Concentrate sources: Nystar acquired the Gordonsville and East Tennessee zinc mines in 2009 to provide feed
for the Clarksville refinery. These mines, now operating as the Nystar Tennessee Mines,
provide most of the concentrates. Feed is comprised of 90% concentrates and 10%
secondaries. The Middle Tennessee mines were operating at approximately 35% of
capacity at the end of 2010 producing 13,000 tonnes of zinc in concentrate. The East
Tennessee mines produced about 50,000 tonnes in 2010 and reached full capacity by the
end of 2010 Q3.The company also processes concentrates from other sources such as the
Century mine in Australia and mines in Central and South America, and Ireland.
Concentrate requirements: The Clarksville refinery is interested in acquiring high grade zinc concentrates (>60%
contained zinc) or calcines and clean secondary oxides. Concentrates sent to this plant
must be very clean. Iron levels must be less than 6%. Arsenic, antimony, thallium,
and selenium are also considered deleterious. The company recovers and pays for
cadmium if economic to do so. No precious metals are recovered.
Other comments: In 2007, the zinc and lead smelting assets of Umicore and Zinifex were acquired by Nyrstar,
creating the world’s largest zinc producer. Previously, the Clarksville refinery was operated
by Zinifex, a predecessor of Pasminco.
Smelter/Plant: Monaca Smelter

Company: Horsehead Corporation (formerly Zinc Corporation)
Location: Monaca, Pennsylvania
Product: zinc and zinc oxide
Type of operation: Electrothermic zinc smelter and refinery.
Annual capacity: 158,000 tonnes (174,000 short tons) per year zinc. Operating at reduced capacity the company
produced about 96,000 tonnes (106,000 short tons) refined zinc in 2009 and, after returning
to full capacity, produced 112,000 tonnes (123,000 short tons) of zinc in 2010.
Capacity utilized: Approximately 70%.
Deleterious elements: minor lead.
Concentrate sources: Historically, Horsehead utilized a 40% concentrate/60% secondary feed mix for zinc
production. Horsehead’s primary concentrate source was from their Balmat mine in New
York State until its closure in 2001. Since the mine closure, Horsehead purchased
concentrates from various outside sources and continued utilizing electric arc furnace dust
and various zinc-bearing secondary materials for feed. By the end of 2002, the Monaca
smelter was using only secondary materials for zinc production. In 2003, Horsehead sold
the Balmat mine to OntZinc Corp.
Other comments: On February 7, 2011 Horsehead announced it has completed a preliminary feasibility study
to construct a 135,000 tonne (150,000 short ton) per year zinc plant based on state-of-the-art
"green" technology and may start construction work on the plant this year.
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Smelter/Plant: Monaca Smelter (continued)
Other comments: The Monaco zinc smelter is the only facility in North America that uses an electrothermal
(continued) process. This process is able to handle a wide range of zinc concentrates (40%-60% Zn) and
can handle high iron content (10%-15% Fe). However, the company prefers higher grade
concentrates (over 50% Zn). No recovery of precious metals is made and thus the company
does not pay for precious metal content. Horsehead could purchase zinc concentrates for
delivery to Monaca, if market conditions warrant.
In May 2002, Horsehead announced plans to discontinue using zinc concentrates and to
produce zinc from only secondary materials. By the end of 2002, the Monaca smelter
produced zinc exclusively from electric arc furnace dust (EAFD)and other zinc-bearing
secondary materials. Horsehead Industries experienced financial difficulties and filed Chapter
11 bankruptcy in August 2002. Horsehead continued to operate the smelter using
predominately recycled feed.
In December 2003, Sun Capital Partners purchased Horsehead Industries and its
subsidiary Horsehead for $73 million. In September 2008, Horsehead shut down one of the
six furnaces because of the steep decline in zinc prices. In February 2009, the company shut
down a second furnace at the Monaca facility, but in July restarted one of the idled furnaces.
As of December, 2010, the company has re-started operations at the refinery, with the ability
to produce the full compliment of zinc oxide products, and returned to pre-incident zinc oxide
production capability at its refinery in early January 2011.
At the same time the company is building a new 162,000 tonne (180,000 short ton) per
year EAFD processing plant in Barnwell, South Carolina.
Smelter/Plant: Fort Madison

Company: Climax Molybdenum Company (Freeport McMoRan Copper & Gold Inc.)
Location: Fort Madison, Iowa
Products: molybdenum oxide, pure molybdic oxide, molysulfide and molybdenum chemicals
(ammonium dimolybdate, pure molybdic oxide, ammonium heptamolybdate, ammonium
octamolybdate, and sodium molybdate).
Type of operation: Two molybdenum roasters, sulfuric acid plant, metallurgical (technical oxide) packaging
facilities and a chemical conversion plant. Production for 2010 was 18 million pounds slightly
less than the 19 million pounds in 2009 and 20 million pounds in 2008.
Annual capacity: 36 to 40 million pounds (16,000-18,000 tonnes) molybdenum.
Capacity utilized: approximately 50%.
Concentrate sources: The molybdenum facilities process Sierrita concentrate, concentrate from other company
mines and concentrate from third-party sources. Most of the feed is supplied by Freeport
McMoRan’s Henderson mine in Colorado, producing 40 million pounds contained
molybdenum per year. The company also owns the idled Climax Mine, also in Colorado,
which could provide up to 30 million pounds of molybdenum per year.
Material requirements: Climax Molybdenum is interested in purchasing and/or toll processing molybdenum
concentrates. To be acceptable, concentrates must contain at least 55% molybdenum and
no more that 0.3% copper. A review of concentrate elemental analysis is required before
material is accepted.
SM
Smelter/Plant: Fort Madison (continued)
Other comments: Phelps Dodge acquired Cyprus Amax through a merger in 1999. Phelps Dodge was purchased
by Freeport McMoRan Copper and Gold, Inc. in March 2007. The company operates a 36 to
40 million pound (16,000-18,000 tonne) annual capacity molybdenum roasting plant at Fort
Madison and a 38 million pound per year molybdenum roaster at Sierrita, Arizona. Freeport
has the ability to produce additional specialty molybdenum chemical products at Fort
Madison.
Now that molybdenum prices have increased, the company operates the Fort Madison
plant at full capacity.
Smelter/Plant: Sierrita Molybdenum Roaster

Company: Freeport McMoRan Copper & Gold Inc.
Location: Green Valley, Arizona
Products: molybdenum and copper
By-products: rhenium and copper
Type of operation: two molybdenum roasters and leach facility
Annual capacity: The two roasters have a combined annual capacity of 38 million pounds (17,200 tonnes,
186,000 short tons) molybdenum. In 2009, Sierrita produced approximately 19 million pounds
(8,600 tonnes) of molybdenum and 18 million pounds (8,100 tonnes) in 2010.
Capacity utilized: 100%+.
Concentrate specifications: Treatment charges at Sierrita are based on grade, level of contaminants, and processes
used. Roasting is preceded by a leaching process, if necessary, to remove lead and
copper from the concentrates. Higher charges are assessed for concentrates that
require leaching. Below are specifications for the types of concentrates that Freeport
accepts.
For Roasting Only Leach + Roast

Mo > 52.0% Mo > 44.0%
Cu < 0.125% Cu < 5.0%
Pb < 0.04% Pb < 0.5%
Insol < 3.0% Insol < 3.0%
H2O + oil < 4.0% H2O + oil < 6%
Concentrate sources: Feed for the roasters comes from the adjacent Sierrita copper-molybdenum mine, and
byproduct production from the Bagdad copper mine in Arizona and the Chino copper mine
in New Mexico. Freeport also tolls concentrates from other companies including
Chevron’s Questa mine in New Mexico.
Other comments: Originally owned by Cyprus Minerals, the Sierrita operations have gone through several
mergers. Freeport McMoRan is the latest owner, acquiring Sierrita through the purchase of
Phelps Dodge in March 2007.
SM
Smelter/Plant: Sierrita Molybdenum Roaster (continued)
Other comments: Sierrita processes molybdenum concentrates by leaching and roasting, and then packaging
(continued) the final product. The leaching removes any residual copper and other metals prior to roasting.
Roasting removes sulfur and produces molybdenum trioxide. The plant forms some of the
oxide into briquettes. The oxide is then packaged in sacks, cans or drums. Air pollution
control equipment captures 97% of the sulfur during roasting, exceeding the 90% capture
required by law. Sierrita is also the largest U.S. producer of rhenium with a capacity of 10,000
pound per year. Rhenium is captured as a by-product during roasting from treated off-gasses.
Final recovery, processing and refining occurs in a small on-site chemical plant using an ion
exchange and crystallization process. The company currently operates the roaster at full
capacity.
Smelter/Plant: Langeloth Molybdenum Roaster

Company: Langeloth Metallurgical Co. (Thompson Creek Metals Co.)
Location: Langeloth, Pennsylvania
Products: molybdenum oxide and ferromolybdenum
By-product sulfuric acid
Type of operation: 6 multi-hearth molybdenum roasters and a specialty metals facility
Annual capacity: 35 million pounds (15,875 tonnes) of molybdenum
Utilized capacity: Restarted in 1994, the plant is currently operating at full capacity, about 35 million pounds
molybdenum per year. Capacity could be increased by realigning other sections of the plant
to roast molybdenum concentrates. In 2010, Langeloth produced 18.334 million pounds
(8,316 tonnes) of molybdenum products. In 2010, the plant roasted and upgraded 5.703
million pounds from 3rd party concentrates.
Concentrate sources: Feed is provided by company's Thompson Creek, ID molybdenum mine, occasionally from
the Endako mine and purchased or tolled concentrates from 3rd parties. The plant also
processes recycled spent catalysts.
Other comments: Langeloth is the largest ferromolybdenum producer in North America. The facility operates
four multi-hearth roasters to roast molybdenum disulfide (MoS2) concentrate into technical
grade molybdenum oxide. The oxide can be upgraded at the plant to briquettes, pure
molybdenum oxide or ferromolybdenum. Two other furnaces can be used to process spent
catalysts. Off gases at the plant are captured and converted to sulfuric acid.
In 2006, Blue Pearl Mining Ltd. purchased the privately held Thompson Creek Metals Co.
The company elected to change its name to Thompson Creek Metals Co. in May 2007.
Thompson Creek also holds a 75% interest in the Endako primary molybdenum mine and
roaster in British Columbia. Endako produces concentrates and molybdenum oxide. A
company spokesman indicated that there was spare capacity at Langeloth that could be used
to convert some of Endako's output to ferromoly.
SM
Smelter/Plant: Fallon Plant

Company: Kennametal Incorporated
Location: Fallon, Nevada
Products: tungsten carbide powder and crystals
Annual capacity: 2,800 tonnes (3,100 short tons) concentrate per year.
Capacity utilized: Approximately 80%
Concentrate specifications: Kennametal processes ferberlite, scheelite and wolframite concentrates at its Fallon
plant. Minimum lot size is 1,000 pounds for domestic producers. Foreign producers
generally send concentrates in container lots of 16 tonnes (18 short tons) or more.
Currently, Kennametal purchase most of its concentrates from Thailand, Brazil and
Bolivia. Handling charges are assessed for lots smaller than one ton.
The following specifications apply to sales of tungsten concentrates to
Kennametal. The company will consider concentrates with trace elements higher than
the specifications listed below.
Wolframite Scheelite
I. Material - Natural gravity concentrates I. Material - Natural gravity concentrates
II. Size requirements: 100% -4 mesh, U.S. Sieve; II. Size requirements: 100% -4 mesh, U.S. Sieve;
75% +200 mesh, U.S. Sieve 75% +200 mesh, U.S. Sieve
III. Elemental Requirements III. Elemental Requirements
WO3 65.00% Minimum As0.05% Maximum WO3 65.00% Minimum As0.05% Maximum
S 0.40% Maximum Sb0.10% Maximum S 0.40% Maximum Sb0.10% Maximum
Ti 0.17% Maximum Bi0.10% Maximum Ti 0.17% Maximum Bi0.10% Maximum
Ta 0.10% Maximum Pb0.30% Maximum Ta 0.10% Maximum Pb0.30% Maximum
Nb 0.19% Maximum Zn0.30% Maximum Nb 0.19% Maximum Zn0.30% Maximum
Mn 6.00% Maximum P0.30% Maximum Mn 6.00% Maximum P0.30% Maximum
Mo 0.20% Maximum SiO24.00% Maximum Mo 0.20% Maximum SiO24.00% Maximum
Cu 0.15% Maximum CaWO45.00% Maximum Cu 0.15% Maximum FeMnWO45.00% Maximum
Sn 0.60% Maximum Sn 0.60% Maximum
Other comments: As of early April, 2011, European free market prices for tungsten APT (ammonium
paratungstate) soared to a high of $400 per metric ton unit, roughly an 80% increase over 2010.
A metric ton unit is equivalent to 10 kilograms or 22 pounds of WO3. All foreign and domestic
shipments must meet predetermined specifications established by Kennametal. A company
spokesman indicated that Kennametal is interested in purchasing or tolling ores and
concentrates for this facility with a minimum grade of 60% WO3, i.e. wolframite and scheelite,
both natural and synthetic.
SM
Smelter/Plant: Stillwater Precious Metals Smelter

Company: Stillwater Mining Company (Norilsk Nickel - 55.5%)
Location: Columbus, Montana
Products: platinum and palladium
By-products: copper, nickel, rhodium, gold and silver
Type of operation: electric furnace, top-blown rotary converters, plus an adjacent Sherritt technology refinery.
Annual capacity: The current capacity is 108.9 tonnes (120 short tons) of copper-nickel-platinum-palladium
flotation concentrate and spent catalytic converter material per day to produce 10.9 tonnes (12
short tons) of matte per day.
Mine production in 2010 was 485,100 ounces of combined palladium and platinum. In
addition, the company processed 399,400 combined ounces of recycled platinum, palladium
and rhodium, of which roughly 40% was from material purchased by the company and the
remainder was toll processed on behalf of others for a fee.
Concentrate specifications: The company could accept copper/nickel sulfide concentrates containing PGMs if the
concentrates are compatible with their own from the nearby Stillwater mine near Nye,
Montana. The Stillwater PGM ratio is approximately 76.3% palladium, 23.3%
platinum and 0.4% rhodium. The company also produces a small amount of copper,
nickel and gold from the Stillwater ore. The smelter recovers about 99% of the
platinum-palladium and 94% of the copper and nickel to produce matte containing
about 2% iron. The smelter requires material to be crushed to -¼ inch. At this time,
the company has some excess smelting and refining capacity and will also accept
precious metals bearing concentrates, platinum group and/or gold bearing secondary
materials, i.e. industrial/platinum catalyst, spent petroleum/chemical catalyst,
automobile catalyst, sweeps, scraps, etc. A sampling plant is in place at the smelter
complex to evaluate outside material.
Deleterious elements: Stillwater rejects ores and materials with excess levels of mercury, arsenic, cadmium,
chlorine, fluorine, lead, zinc, selenium and benzene.
Concentrate sources: All feed is currently supplied by the company-owned Stillwater and East Boulder mines and
purchased catalysts.
Other comments: Stillwater Mining Company, originally a joint venture between Chevron USA and Manville
Corporation, has operated its $10 million palladium-platinum smelter since July 7, 1990.
Chevron sold its 50% share to investors in September 1994. In December 1994, the
company went public to raise capital for an estimated $40 million in expansion projects.
Manville's remaining interest was sold in August 1995 to institutional investors, completing
Stillwater's transition to a publicly owned company. In 2003, Norilsk Nickel acquired
55.5% of Stillwater Mining Company through common stock acquisition. The agreement
will allow Norilsk to supply PGMs to Stillwater’s customers and provide Norilsk with direct
access to the North American market. Stillwater will benefit by reducing its debt with cash
generated from the sale of stock.
SM
Smelter/Plant: Stillwater Precious Metals Smelter (continued)
Other comments: The Columbus smelter processes material from the company’s East Boulder and Stillwater
mines. Concentrates are processed in a 5 megawatt electric arc furnace to produce a PGM-
rich matte. The matte is tapped from the furnace and granulated. The granulated matte is re-
smelted in one of two top blown rotary converters. Since 1995, Stillwater has spent over
$600 million expanding the Stillwater mine, developing the East Boulder mine, and
expanding the concentrator and Columbus smelter.
The Columbus refinery upgrades the matte to a filter cake containing 60% platinum
group metals by removing the copper and nickel. A copper-nickel electrowinning refinery
removes copper, nickel and cobalt from a copper-nickel sulfate solution produced in the
refinery. Stillwater sends the upgraded PGM filter cake to the most competitive PGM
refinery for final processing.
In 2008, the Company began constructing a second smelter furnace at the Columbus
facility to accommodate forecasted levels of future processing; mitigate any potential
operational risk, as virtually all of the Company’s metal production is dependent on the
availability of the smelter facility; and allow the Company to continue processing during
periodic scheduled shutdowns for replacing the refractory lining in the existing furnace. The
2008 expenditures included about $12.9 million toward a second electric furnace. In May
of 2009 the company completed construction of the new, second electric furnace at the
Columbus smelter.
Smelter/Plant:: Delta Plant

Company: Performance Alloys, a subsidiary Materion Corporation (previously Brush Engineered
Materials)
Location: Delta, Utah
Products: Beryllium hydroxide. Approximately 87% of the beryllium in ore is recovered in the extraction
process.
Annual capacity: 500,000 pounds (227 tonnes) per year of beryllium metal contained in BeOH (beryllium
hydroxide). In 2009, Delta processed 35,400 tonnes (39,000 short tons) bertrandite ore from the
company’s mines and in 2010 processed ore increased to 51,000 tonnes (56,000 short tons).
Capacity utilized: 90%
Concentrate specifications: The following specifications apply to sales of beryl ores:

Average Assay: Analytical Specifications:
Weighted average BeO content for 10.0% minimum Phosphorus content 0.25% maximum
all lots delivered in any calendar year Moisture content 1.0% maximum
Analytical Specifications: Physical Specifications:
BeO content 10.0% minimum Less than 4" 100%
Na2O content (any ore shipment) 1.6% maximum Less than 10 mesh 5.0% maximum
CaO content 0.70% maximum Lot size 10 ton minimum
CaO + Na2O furnaced 1.5% maximum
Concentrate sources: The bertrandite ore is supplied by company owned mines although small amount of foreign
and domestic beryl ore is purchased. The purchased beryl ore is processed at the Delta plant
in a separate treatment circuit.
SM
GOLD AND SILVER REFINING
Gold and silver refining is a highly competitive Refining Terms

industry with numerous buyers vying for the miners' When a shipment of gold is sent to a refiner, the
output. Refining costs have remained steady over the refiner melts it down, skims off the slag, and pours a
past several years, even though precious metal prices doré or miner's bar. Four samples, usually between
have fluctuated widely. Unlike base metal producers, 0.25 and 0.35 troy ounce each, are taken from the bar.
precious metal producers are not severely limited by The samples are usually slightly larger for silver.
geographic restrictions or compatibility between ore The refiner bases the payment on the weight of
and processing plants when selecting a refiner. The the bar and on his assay of one of the samples. One
miner is well-advised to do some shopping before sample is provided to the customer for his assay, if
selecting a refiner. desired, and the two remaining are saved for umpire
Comparison of terms should be only a part of the assays if necessary.
selection process. Because of the high value of the Unless the refiner is told otherwise, he will
commodity involved, the producer should take pains normally dump both the slag and the umpire samples
to assure that his product will be properly processed after a few months. However, the slag should be
and protected in both a physical and a business sense. saved; it may contain enough gold values to make it
worthwhile to combine several lots into a single batch
Selecting a Refiner for smelting, perhaps at the end of a season's
Integrity and sound market reputation are important operation. The umpire samples should also be saved
considerations. A few refiners in the Engineering & for periodic check assays.
Mining Journal and Canadian Mines Handbook lists Refineries rarely publish their refining terms.
will be immediately recognized as having reputations For comparison purposes, written confirmation of
of leadership, strength, and integrity in precious metal terms should be requested from a list of acceptable
circles; but there are other, lesser known but equally refineries. Formats may differ, but most refiners will
viable, refiner options to consider. Automatic present quotations with the following basic
international acceptance of the refiner's gold and components:
silver bars is certainly an indication of the refiner's
market reputation. - Treatment charge (dollars per troy ounce on net
Financial strength is also important. Because of weight received)
the high unit values involved, it is essential that your - Assay charge (usually a lot charge for each metal)
refiner be capable of providing the necessary - Accountability or return (the percentage of the
insurance and security measures, as well as business assay the refiner will credit)
stability, to ensure that your material is fully protected - Other special charges
from theft or bankruptcy seizure while on his - Outturn (the time to complete the refining)
premises. The refiner's financial statements can be
requested; recommendations can be acquired from These terms will vary among refineries within rather
other precious metal mines and banks dealing in tight limits. Most refiners will negotiate their terms
precious metals; the refinery can be visited to gain a based on the quality of material, gold/silver and
better appreciation for the size and scope of the deleterious element content; quantity of material, both
organization. on an annual basis and by shipment; and regularity of
Because of the competitive nature of the refining shipment, weekly, monthly, or irregular.
industry, it is unlikely that a middleman can improve Treatment charges have been on an upward trend
on terms that might be reached by dealing with the in recent years in response to the higher metal prices
refiners directly. If, for service reasons, an and increased costs. Treatment charges for gold
intermediary is utilized, the refinery should still be today, range from $0.60 to $2.00 per troy ounce, up
evaluated by the miner. from $0.60 to $1.30 per ounce a few years ago. Large
regular shippers can generally expect to pay between
We would like to thank the many precious $0.50 to $1.25 per ounce, while small, infrequent
metal producers and refiners who contributed shippers may pay up to $2.00 per ounce. One shipper
information for and reviewed this article. reported paying a much higher treatment charge. In
return, he received a higher accountability percentage.
SM
Copyright 8 2011 InfoMine USA, Inc. A1
GOLD AND SILVER REFINING (continued)
This was a negotiated arrangement designed for tax negotiation, large volume shippers may be able to
purposes. Silver treatment charges range from $0.40 improve on any of these terms.
to $0.75 per ounce. Minimum charges are typically
$300 and up per lot. Small refiners with lower fixed Example:
costs will charge lower minimum charges for small, A miner sends 300 troy ounces of placer or a doré
frequent lots received from the secondary or scrap containing over 25% gold to a refiner. This
markets, however other terms may offset these lower refiner pays 98% payable gold and 92% payable
minimums. silver and charges $1.40 per troy ounce for
Assay charges range from $25 to $40 each for gold refining. Settlement price is the London PM price
and silver. This is normally a single charge per lot. for gold and the New York Comex closing price
Some refiners reportedly charge 2 to 3 times this rate for silver for the date seven days from receipt of
for assays. placer or doré gold.
Accountability covers the refiner's working losses The miner receives payment at the settlement
and may include a part of the profit margin. We price for 98% of the gold and 92% of the silver
found accountability ranged from 92% to 99% for recovered. The treatment charge is: $1.20/tr. oz.
gold and 85% to 98% for silver. Small lots or low received X 300 tr. oz. = $420.00. Assay and other
grade material can reduce accountability levels to as charges are assessed accordingly.
little as 88% for gold and 82% for silver.
Accountability is also usually lowered to 85% to 92% Carbon Stripping
for some small refiners who buy gold at the mine-site Small heap leach operators using carbon recovery
and pay cash on the spot. Favorable accountability systems may want to avoid investing in a carbon
terms are offset in some agreements by discounts stripping and electrowinning facility. A few
applied to metal purchase price. A small placer gold- commercial stripping companies are available who
and-gold jewelry refiner reported using only a single will accept shipments of loaded charcoal, strip and
fee stated in accountability terms varying from 92% to reactivate the charcoal, and return it to the miner,
96.5%, depending on the content of gold in the placer, along with his doré.
scrap or jewelry. This procedure saves the miner the expense of
If the gold shipment contains greater than 25% installing the facilities on-site, but necessitates
impurities, a smelting charge of about $3.00 to $5.00 maintaining a much larger carbon inventory to allow
per pound may be assessed. Elevated lead, iron or continued operation of the leach circuit while a
nickel can cause problems with accurately evaluating shipment of loaded carbon is being processed. By
and assaying a gold shipment. Producers are advised shipping a product of lower value, the risk of theft is
to remove these elements prior to shipping their gold reduced, but problems with product assay and weight
for refining. If the shipment contains mercury, a monitoring are increased.
retorting charge on the order of $200 per lot may be The number of companies offering this service is
assessed. Many U.S. refiners will not accept mercury shrinking. During the rapid growth period of the gold
and many mines do their own retorting. In fact, mining industry in the early to mid-1980s, this option
mercury is so easy to remove by dissolving in nitric was utilized to a great extent by pilot heap leach
acid, there is little reason for anyone to ship mercury- plants and small operators. Now, with the maturation
contaminated gold to a refiner. of the industry, most mines have installed their own
Silver producers need to be aware that refiners will carbon stripping facilities, thereby eliminating the
not accept shipments containing deleterious levels of need for the custom stripper's services. One refiner of
antimony, arsenic, bismuth, cadmium selenium or loaded carbon reported a treatment charge of $15.00
tellurium. One of the refiners stated that refining is a per ton of loaded carbon with payment based on an
very competitive business and through accountability of 95% for gold and silver.
SM
A2 Copyright 8 2011 InfoMine USA, Inc.
GOLD AND SILVER REFINING (continued)
Settlement Typical outturn time is three weeks to one month

Refiners normally offer three settlement options on from receipt of material at the refiner's premises.
the outturn date. Some refiners will offer cash payment in advance of
this date, generally two to three days after receipt,
1 Outright purchase - Most settlements are made once they have had an opportunity to evaluate the
on the internationally accepted Second London material. Interest or a service charge will be applied
Fix for gold and the New York Comex closing in this case.
price for silver. Some refineries discount these Normally, refiner's terms will be f.o.b. their
prices slightly. receiving station. The shipper has full responsibility
for insurance and transport to the receiving station.
2. Storage (consignment) - Often, when the seller is
bullish on the metal markets and has the cash Control
position enabling him to do so, he will leave Steps recommended for a shipper to improve his
metal with the refiner to sell at a later date. In control over the refining process are listed below.
this case, it is extremely important to be sure the
refiner has the security and financial strength to 1. Weigh each lot as accurately as possible before
ensure the metal is fully protected. Refiners do shipping.
not normally charge for this service; in fact,
some will offer to pay interest on the stored 2. If possible, melt material into a bar prior to
gold. In exchange, the shipper will be expected shipping, take a small sample, and assay it. It is
to sign a release allowing the refiner to speculate difficult to obtain a representative sample from
with the gold. This type of arrangement is risky unmelted cathode material, so shipment to a
and is responsible for some heavy losses refinery before melting carries a risk of
incurred by unsuspecting shippers. In fact, one uncertainty regarding precious metal content.
of our advisors suggests that no one should deal
with a refiner who asks for a "release" to 3. Periodically split lots between two refiners and
speculate with the customer's gold. compare costs and results.
It is normally quite easy to sell gold out of a
storage account. With one major refiner, if you 4 If possible, witness the weighing and sampling
call before 3:00 P.M. you can lock in the next of material at the refinery. Bonded
day London Metals Exchange PM fix, and your representatives can be hired to act as witnesses.
money is wired to you in two days.
5. Keep an accurate log of results and costs of
3. Physical return of refined metals as good refining lots to monitor changes in charges or
delivery bars or grain - The seller will be contents.
assessed for shipping, plus a small fabrication
charge in the case of investment bars. Good
delivery bars bearing an accredited refiner's
stamp are readily accepted at all major gold-
dealing banks. Other bars will be subject to a
discount on resale.
SM
Copyright 8 2011 InfoMine USA, Inc. A3

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Long-term Treatment Charge Refining Charge Average LME 1 Grade A

Long-term (Annual) Treatment Average LME 1 Pure Lead

Comparison of Zinc Concentrate Treatment Charges and Zinc Prices by Year

Long-term (Annual) Treatment Average LME 1 SHG

 Refining Charges (1)

 Refining Charges (3)

Smelter/Plant: Kidd Creek Division - Closed in 2010.

Smelter/Plant: Flin Flon Copper Smelter - Closed in 2010

Smelter/Plant: Horne Smelter

(continued next page)

Smelter/Plant: Horne Smelter (continued)

Smelter/Plant: Sudbury Division

Products: nickel and copper

By-products: gold, silver, platinum, palladium, rhodium, and cobalt

(continued next page)

Smelter/Plant: Sudbury Division (continued)

Smelter/Plant: Copper Cliff Smelter

Capacity utilized: About 80%.

(continued next page)

Smelter/Plant: Copper Cliff Smelter (continued)

Company: Sherritt International Corp.

Utilized capacity: 100%+.

Smelter/Plant: Thompson Smelter

Smelter/Plant: Brunswick (Belledune) Smelter

Utilized capacity: Approximately 75%.

Smelter/Plant: Trail Lead Smelter

Capacity utilized: 60%.

Type of operation: Electrolytic zinc refinery.

Utilized capacity: 98%.

Smelter/Plant: Trail Zinc Plant

Product: zinc and zinc alloys

Utilized capacity: 93%.

Deleterious elements: Fluorine, chlorine.

Smelter/Plant: Kidd Creek Division - Closed in 2010

Smelter/Plant: Flin Flon Zinc Plant

Capacity utilized: Currently 100%.

Smelter/Plant: Endako Molybdenum Roaster

Product: molybdenum oxide

Capacity utilized: About 70%.

Mo > 52.0% Pb < 0.03% H2O + oil < 10.0%

(continued next page)

Smelter/Plant: Endako Molybdenum Roaster (continued)

Smelter/Plant: Hayden Smelter (Ray complex)

By-products: gold and silver

Type of operation: Inco flash furnace

Utilized capacity: Approximately 75%.

Concentrates: 25-35% copper, low impurities

Smelter/Plant: Utah Copper Division Smelter

By-products: gold, silver, molybdenum and sulfuric acid.

Capacity utilized: 96%.

Smelter/Plant: Miami Smelter

By-products: gold, silver and sulfuric acid

Capacity utilized: 88%.

Smelter/Plant: Glover Smelter (Care and maintenance)

Type of operation: lead smelter

Utilized capacity: Suspended.

Smelter/Plant: Resource Recycling Division (formerly Buick Lead Smelter)

By-product: tin, sodium sulfate, polypropylene, and copper

Type of operation: reverberatory furnace, blast furnace and rotary melter

Utilized capacity: 100%.