LS-Nikko Copper President Doh Suk-goo, Teck Resources Senior Vice President Andrew A. Stonkus in charge of marketing and logistics, and Yang Hwan-joon, head of the Project Financing Division at Korea Eximbank, participate in a ceremony to sig a long-term deal with Vancouver based Teck Resources to purchase a combined 1 million tons of copper concentrate at Ulsan Lotte Hotel on Sept. 5. (Photo: LS-Nikko Copper)

LS-Nikko Copper’s securing 1 million tons of copper concentrate from Canada-based resources developer Teck Resources is likely to give the Korean metal resource company an upper hand in a global race to secure resources.

LS-Nikko Copper will be capable of producing items worth 1 trillion won such as electrolytic copper and rare metals by processing the copper concentrate.

LS-Nikko Copper signed a long-term deal with Vancouver–based Teck Resources to purchase a combined 1 million tons of copper concentrate - 100,000 tons annually for 10 years - at Ulsan Lotte Hotel on Sept. 5. A 10-year-long contract is the longest one the Korean metal resource company has ever signed. The deal is done as smelters around the world are waging a fierce battle to secure raw materials.

Under the agreement, LS-Nikko Copper will have a stable supply of 100,000 tons of copper concentrate from Quebrada Blanca mine in northern Chile, which is run by Teck Resources, between 2022 and 2031.

Raw copper from mines with less than 5 percent of copper purity undergo a process of dressing and separating to enhance purity levels to more than 25 percent. Importing copper concentrates into Korea instead of raw copper can reduce transportation costs. Copper concentrate from the Chile mine is considered to be a high quality with 30 percent purity.

LS-Nikko Copper will be able to produce items worth 1 trillion won such as electrolytic copper and rare metals by smelting the copper concentrates from Chile.

Electrolytic copper refers to copper with 99.9 percent purity through electrolysis. Gold, silver, and other metal products produced by processing copper concentrates are in wide use in sectors such as the Korean electronics, telecommunications, aerospace, and automobile industries.

LS-Nikko Copper’s signing of the deal is possible with the financial support of Korea Eximbank, even though Korea has no equity in the Chilean mine. Amid predictions that the global copper concentrate market is in short supply in a mid- and long-term period, smelters around the world are scrambling to secure copper concentrates by making equity investments in mines or offering supplementary support.

Given the situation, Korea Eximbank agreed to provide $400 million in financial support to the Quebrada Blanca mine to help LS-Nikko Copper reach the long-term contract to secure copper concentrates.

Securing the raw material is essential not only for production of copper and but also for determining the competitive edge of coffer smelting. Last year, LS-Nikko Copper succeeded in striking separate deals with Peruvian miner Minsur and Australian mining giant BHP.

LS-Nikko Copper ‘s reaching the successive deals has been evaluated to be globally trusted for not only its capability to operate the Onsan Smelter, but also for technology prowess, productivity and financial soundness by global miners.

Among those on hand at a ceremony to sign the latest deal were LS-Nikko Copper President Doh Suk-goo, Teck Resources Senior Vice President Andrew A. Stonkus in charge of marketing and logistics, and Yang Hwan-joon, head of the Project Financing Division at Korea Eximbank.

LS-Nikko Copper President Doh said, “We expect to grow with Teck Resources as a long-term and best partner.” He extended thanks to Korea Eximbank’s investing $400 million, he said.