Lead-Silver Ore Specifications for Smelters: Grade Terms, Silver Credits and Penalty Elements Explained
A lead-silver ore contract pays you two ways. The lead content, priced against the LME lead price with a treatment charge deducted, and the silver content as a credit on top. Then the smelter subtracts penalties for the elements that cost it money to deal with. Get those three parts right and you know what your lot is actually worth.
Here's how each piece works, and what to check before you agree to anything.
How is lead grade quoted in an ore contract?
Lead is quoted as a percentage by weight — Pb% on a dry basis. Dry basis matters. Ore carries moisture, and the smelter pays for metal, not water, so the contract weight is adjusted for free moisture determined at loading or on arrival.
Most lead ore sold for smelting sits somewhere in the galena range, but the number that matters is the one on your certificate of analysis, not a brochure figure. Buyers typically want a minimum Pb% stated, with a sliding scale or a flat deduction below that minimum.
The common structure looks like this:
- Payable lead — the smelter pays for a percentage of contained lead, often with a fixed unit deduction (a set number of units it keeps regardless). Confirm the exact deduction, because it moves the whole economics.
- Treatment charge (TC) — a per-tonne charge for smelting. It's negotiated and it swings with the market.
- Price basis — usually an averaging period around the LME lead cash settlement, agreed in the contract. Pin down the quotational period (QP) so both sides know which price days count.
At GBX we sell lead-silver ore as crushed ore, not flotation concentrate, crushed to the buyer's size range. Each lot is sampled and assayed by SGS Pakistan, and sold against that SGS certificate of analysis. So the Pb% and Ag figure you contract against is the one on paper, not a verbal estimate.
How are silver credits calculated in lead ore?
The silver in a lead-silver ore is where a lot of the value lives, and it's paid separately from the lead.
Silver is assayed in grams per tonne (g/t) or sometimes troy ounces per tonne. The smelter pays a percentage of the contained silver — the payable silver factor — priced against the LME or LBMA silver reference over an agreed quotational period. That percentage is almost never 100%. A minimum deductible is normal (the smelter keeps a small amount of silver per tonne before paying), so read that clause carefully.
Two things to confirm on the silver credit:
- The payable percentage and any minimum deduction below which silver isn't paid at all.
- The reference price and QP for silver, which may differ from the lead QP.
Honestly, the silver credit is the part buyers most often underestimate when they compare offers. A lot that looks weaker on lead can be worth more once the silver is priced in. Ask for the silver assay in writing every time.
What are the penalty elements in lead-silver ore?
Penalties are deductions for elements that complicate smelting, foul the process, or trigger environmental handling. Each smelter publishes its own penalty thresholds and rates, so there's no single universal table — but the usual suspects are consistent across the industry.
Elements smelters commonly penalise in lead ore:
| Element | Why it's penalised |
|---|---|
| Arsenic (As) | Toxic, costly to capture and dispose of |
| Antimony (Sb) | Affects refining, reports to by-products |
| Zinc (Zn) | Interferes with the lead smelting process |
| Bismuth (Bi) | Hard to remove, degrades refined lead quality |
| Copper (Cu) | Can be a credit at some smelters, a penalty at others |
| Mercury (Hg) | Strict environmental limits, often a hard reject above a threshold |
Each of these usually has a free allowance — a level below which there's no penalty — then a per-unit charge above it. The exact thresholds and rates are set by the buyer. Don't assume. Ask the smelter for its penalty schedule before you commit, because two refiners can treat the same ore very differently.
Antimony is interesting here. In a lead-silver ore it's a penalty element. As a standalone product it's a mineral in its own right — if you're sourcing it separately, that's our antimony ore page.
The single biggest mistake I see? Buyers compare TC and payable lead between two offers and ignore the penalty exposure entirely. A low TC means nothing if the arsenic penalty eats the difference. Compare the landed, net-payable figure — not the headline terms.
What assay and inspection terms should a buyer insist on?
The assay is the contract. Everything — payable lead, silver credit, penalties — is calculated from those numbers, so how the sample is taken and tested is as important as the ore itself.
What to check:
- Who samples and when. At GBX each lot is sampled and analysed by SGS Pakistan. Buyers may also test a sample in their own laboratory, and may appoint SGS or their own inspector at loading. Agree this up front.
- Which elements are reported. Make sure the certificate covers Pb, Ag and every penalty element the smelter cares about — As, Sb, Zn, Bi, Cu, Hg — not just the headline grades.
- Umpire clause. If the buyer's assay and the seller's assay differ beyond an agreed splitting limit, a third independent lab (the umpire) settles it. Standard practice. Put it in the contract.
- Moisture determination. Agree where and how free moisture is measured, since it adjusts the payable dry weight.
- Size range. We crush to the buyer's specified size, so state it.
HS codes, Incoterms and documents for a lead ore shipment
Lead ores and concentrates generally fall under HS heading 26.07. Silver-bearing content doesn't usually get its own line when the silver is contained in the lead ore — but confirm the exact national subheading with your customs broker, since classification and duty detail vary by country.
GBX offers are FOB Karachi, with CFR on request. Under FOB you arrange ocean freight and marine insurance from Karachi; under CFR we arrange freight to your named port. Minerals are supplied to order, so availability and the shipment window are confirmed on enquiry.
Typical documents for a lead-silver ore shipment:
- Commercial invoice (provisional, then final after assay and QP settle)
- Packing / weight list
- SGS certificate of analysis
- Bill of lading
- Certificate of origin
- Any phytosanitary or dangerous-goods paperwork your port requires — check, since lead ore handling rules differ by destination
Because lead and silver prices move over the quotational period, most ore contracts settle on a provisional invoice at loading and a final invoice once the QP closes and assays are agreed. Build that two-step payment into your terms.
To get a lot assessed, request a quote on the lead-silver ore page, or message WhatsApp +92 300 3644444 with your target Pb%, size range and destination port. Tell us your smelter's penalty thresholds too — it makes the offer far more useful to you.
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