Sterlite Industries (India) Ltd. (STLT) and Hindalco Industries Ltd. won a 13 percent increase in ore processing fees from Freeport-McMoRan Copper & Gold Inc. (FCX) for next year, said two people familiar with the agreement. The two companies, which refine almost all of the nation’s output, will charge the world’s largest publicly traded copper producer $63.50 a metric ton to process concentrate into metal, said the people, declining to be identified because the talks are private. Refining charges will increase to 6.35 cents a pound from 5.60 cents, they said. Pan Pacific Copper Co., Japan’s largest producer, won a similar increase in fees from Freeport for next year, two industry executives familiar with the matter said on Dec. 3. Smelters in Japan, China and India are seeking higher treatment and refining fees in anticipation of greater production as new projects start production and strikes end at copper mines in Indonesia, Peru and Chile. Workers at Freeport’s Grasberg mine in Indonesia agreed to end a three month strike on Dec. 14. Miners at the Collahuasi copper mine, a venture between Anglo American Plc and Xstrata Plc in northern Chile, last month agreed to end a strike over job dismissals, while Grupo Mexico SAB’s unit in October began talks with Peru’s government to restart its Tia Maria copper project. Higher Fees Sterlite and Hindalco, which will use about 30 percent of their capacity for Freeport, are expected to seek more than $60 a ton to process ore from Chilean producers this week, one of the people said, without giving details. Hindalco spokeswoman Pragnya Ram declined to comment about next year’s fees, while Sterlite spokesman Pavan Kaushik didn’t answer three calls to his mobile phone. Sterlite gained 3.6 percent to 91.25 rupees, while Hindalco increased 3.4 percent to 122.90 rupees at the close of trade in Mumbai yesterday. The benchmark Sensitive Index rose 3.4 percent. Copper gained for a second day in London yesterday as imports of refined metal by China, the world’s biggest user, climbed to the highest level since June 2009 and after Premier Wen Jiabao pledged to bolster exports. Sterlite and Hindalco, which smelt concentrate mined mainly in Chile, Peru and Australia, had won a 20 percent increase in fees for 2011. Treatment fees are expressed in dollars per ton of concentrate received and refining fees in cents per pound of copper in the ore. The fees are deducted from the price paid by smelters to mining companies for the raw material. To contact the reporter on this story: Abhishek Shanker in Mumbai at ashanker1@bloomberg.net To contact the editors responsible for this story: Rebecca Keenan at rkeenan5@bloomberg.net; Andrew Hobbs at ahobbs4@bloomberg.net

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