US miner Freeport-McMoRan Copper & Gold has agreed to pay 16.3 per cent more in annual processing charges to large Chinese copper smelters next year, with the 10-year-high fee likely to set the benchmark for the mainland. The increase in charges is a clear signal that even miners accept copper will swing into surplus next year after five years of deficit. Expectations of swelling supply have hung over copper prices, which have fallen about 12 per cent this year. Higher charges usually spur smelters to boost production, which would ease supply constraints if mainland smelters also ramp up exports. China's top integrated copper producer, Jiangxi Copper, and other large mainland smelters have agreed with Freeport to term treatment and refining charges of US$107 per tonne for copper concentrate shipments next year, three sources said yesterday. That is up from US$92 per tonne for term shipments this year, which was 31 per cent higher than for shipments last year. The 2015 charges, the highest since 2005, are for clean, standard copper concentrates to China. Freeport operates the world's second-biggest copper mine, in Indonesia. The agreed charges were in line with market expectations but below Asian spot market prices. Miners pay treatment and refining charges to smelters to convert concentrate into refined metal, with charges deducted from smelters' purchase prices. As the supply of concentrate increases, the demand for smelting capacity and the charges also rise, translating into higher profits for smelters. "Other global miners should follow that TC/RC, which would be the benchmark for China," one source from a large state-owned smelter said.