The two companies agreed to a TC of $136 per tonne and refining charge (RC) of $1.50 per oz, down from $182.50 per tonne / $1.50 per oz, sources claiming direct knowledge said. The deal was locked as per contract with no changes to volumes, they added.

South32 declined to comment and Korea Zinc did not respond to a request for comment.

Annual terms in contracts for Cannington have in recent years been taken as a benchmark for other lead concentrate with high silver content, such as from Sumitomo's San Cristobal mine in Bolivia.

The deal comes after a turbulent year for miners and smelters, during which the pandemic continually disrupted mining in key supply countries of Peru, Bolivia and Mexico.

Lower annual terms reflect a spot market that is less well supplied as a result of those disruptions, market sources told Fastmarkets.

"There's been a bit of a change in mindset, smelters thought the market was going to go from very tight to soft in the second half of the year, but we're in April and that direction now looks a bit optimistic," a market source said.

For low silver lead concentrate, Mitsui Mining & Smelting agreed to TC/RCs of $141 per tonne / $1.50 per oz in its contract to purchase lead concentrate from Teck Resources' Red Dog mine in the US state of Alaska, sources with knowledge of the dealings said.

This story was originally published at 10:20 UK time stating that the deal between Cannington and Korea Zinc was done at a TC/RC of $142.5 per tonne / $1.5 per oz. This has now been corrected to $136 per tonne / $1.5 per oz as of 17:09 UK time.