How it is calculated
- Payable metal per dry tonne = grade (%) × payable (%) ÷ 10,000
- Gross value per dry tonne = payable metal × metal price
- Net value per dry tonne = gross value − treatment charge − refining charge − penalties
- Refining charge per dry tonne = payable metal × refining charge per payable tonne of metal
- Shipment value = net value per dry tonne × dry tonnes
Worked example
A zinc concentrate at 50% Zn, 85% payable, zinc at $3,000 per tonne, treatment charge $150 per dry tonne, no refining charge or penalties. Payable zinc = 0.50 × 0.85 = 0.425 tonnes per dry tonne. Gross value = 0.425 × 3,000 = $1,275. Net value = 1,275 − 150 = $1,125 per dry tonne. These inputs are illustrations, not market prices.
Frequently asked questions
What is payable metal?
The share of the metal in the concentrate that the smelter agrees to pay for. The rest is not paid for, to cover its processing losses. Contracts may instead set a minimum deduction in units of metal.
What is a treatment charge?
A fee per dry tonne of concentrate that the smelter keeps for processing it. Copper contracts also use a refining charge per unit of payable metal.
Is this the same as a smelter's settlement?
No. It is a simplified model. Real settlements use contract-specific payable terms, minimum deductions, price participation, penalties and quotation periods, so treat the result as an estimate.
Does moisture matter?
Yes. Concentrate is paid on dry weight, so enter the wet weight and moisture to get the dry tonnes the value is based on.