Canada's Inmet Mining Corp. (IMN.T) said a growing shortage of zinc concentrates amid a backdrop of strong demand from smelters is pushing treatment charges lower.

"Zinc treatment charges continue to be significantly lower in the first half of 2006 compared to same period in 2005 because of a growing shortage of zinc concentrates and strong demand from the smelters," the company said in a statement late Tuesday.

But the company said the treatment charges it pays per metric ton of copper increased by 7% during the second quarter and by 13% in the year to date, compared with the same periods in 2005.

"Overall smelter processing charges, which include treatment charges and price participation, were 74% higher this quarter than the same period in 2005, mainly because of the impact higher metal prices had on price participation," Inmet said.

Inmet said it is on target to achieve its 2006 objective of 80,000 tons of copper and 82,000 tons of zinc.

Copper freight charges were higher in the second quarter compared with the same period in 2005, the company said.

This is because Inmet shipped to locations that were further away from its operations, it said.