Teck Resources Secures Higher Silver and Germanium Charges in 2026 Korea Zinc Deal
Canadian mining giant Teck Resources has reached a significant agreement with Korea Zinc Co., setting new terms for the sale of zinc concentrates in 2026. The deal includes a modest increase in processing fees, but more notably, it introduces higher charges for silver and germanium, capitalizing on the dramatic price surges for these metals.
Revised Treatment Charges and Metal Pricing
According to sources familiar with the confidential negotiations, the treatment charge that Korea Zinc will receive for smelting zinc concentrates has been set at US$85 per ton for 2026. This represents a slight rebound from the current year's fee of US$80 per ton, which was the lowest benchmark level in the zinc industry in over five decades.
Low processing fees have historically posed challenges for zinc smelters, as these charges typically account for approximately one-third of their revenue streams. However, Korea Zinc managed to achieve record profits in 2025, largely due to an extraordinary rally in prices for silver and other minor metals contained in the concentrates it processes.
Silver and Germanium Price Surges Drive Changes
The new agreement includes crucial adjustments to how silver and germanium are priced. Teck and Korea Zinc have agreed to lower the content threshold at which silver becomes payable, which will increase Teck's share of revenues from the silver it produces. Additionally, for the first time, the Canadian miner will implement charges for the germanium contained in its concentrates.
Silver prices experienced a remarkable 150 percent increase throughout 2025, while germanium prices surged by 75 percent last year. Germanium plays a vital role in defense systems and advanced technologies, with prices climbing significantly since China implemented export controls on this and other critical minerals beginning in 2023.
Korea Zinc's Position in the Global Market
Korea Zinc stands as one of the largest producers of critical minerals outside of China, supplying approximately five percent of the world's silver. The company plans to commence germanium production at a new facility starting in 2028. Many of its byproducts originate from Teck's Red Dog project in Alaska, which is recognized as the world's largest zinc-lead mine.
The output from Red Dog currently faces competitive challenges in the Chinese market due to tariffs on United States goods, making alternative arrangements increasingly important for both companies.
Industry Implications and Future Outlook
This agreement between Teck Resources and Korea Zinc reflects broader trends in the mining and metals sector, where pricing for byproducts and critical minerals is becoming increasingly significant. The adjustments in silver and germanium charges demonstrate how miners are adapting to market dynamics and seeking to maximize revenue from all components of their production.
Both companies have maintained discretion regarding the specific terms, with Teck declining to comment and Korea Zinc not responding to requests for clarification. The deal underscores the evolving nature of mineral supply chains and the growing importance of strategic partnerships in navigating complex global markets.
