It has also told customers that they must agree to increase the payable levels of zinc in concentrates to 95% if they wish to guarantee supply, a move that, if it is implemented, could radically alter the business models used in zinc mining and smelting.
Teck is in the process of renegotiating frame contracts for the supply of zinc concentrates from its Red Dog zinc mine in Alaska. Current contracts with zinc smelter customers - including Glencore, Korea Zinc and Nyrstar – lock-in supply for five years. New contracts will cover the period 2019-23.
In discussions, commercial representatives from Teck have said that frame contract tonnages will be cut by 50%, and that the company could withdraw from the agreements completely if smelters do not agree to increase payables from the current level of 85%, five sources with direct knowledge of the meetings have told Metal Bulletin.
“[Teck] declared that it will...