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By J. Sikamo, A. Mwanza, C. Mweemba

"The Zambian copper mining industry as we know it today had its genesis in the 1920s. Consistent private sector-driven investment in the industry over a period of over 50 years in exploration, mine development and operation, development of minerals processing facilities, building of infrastructure for pyrometallurgical and hydrometallurgical processing, with attendant support facilities, including building of whole new towns, resulted in copper production rising to a peak of 769 000 t in 1969, providingover 62 000 direct jobs. The industry was nationalized in 1973 and remained in government hands for just over 24 years. During this period, the industry experienced a serious decline in production levels, reaching the lowest level in the year 2000 when production was 250 000 t. An average of just under 2000 jobs were lost every year in the 24-year period, reaching just over 22 000 direct jobs in 2000.Following the return of Zambian politics to pluralism and liberalized economic policies, the government decided to privatize the mining industry. The process started in 1996 and by the year 2000 all the mining assets had been privatized. The new investors embarked on serious investment to upgrade the assets and to develop greenfield mining projects. Fourteen years later and after more than US$12 billion investment, production levels increased year-on-year to a peak of 763 000 t in 2013 with direct jobs reaching 90 000.This paper discusses the impact of the mining industry in Zambia on the economy in areas such as employment, support for other industries, direct contribution to the national gross domestic product (GDP), foreign exchange earnings, and social amenities. The paper also focuses on the performance of the mines during these periods vis-à-vis mineral availability, mineral grades and complexity, new technologies, and human capital. This is looked at particularly in the light of current challenges the industry is facing. Suggestions are proposed on how the industry can be nurtured to continue being a major driver for the Zambian economy and a major player in the international copper mining business."

Jan 1, 2016

By Cade Mweemba, Alex Mwanza, Jackson Sikamo

"The Zambian Copper mining industry as we know it today has its genesis from early in the 20th century in the 1920s. Consistent private sector-driven investment in the industry over a period of over 50 years in exploration, mine development and operation, development of minerals processing facilities, building of infrastructure for pyrometallurgical and hydrometallurgical processing, with attendant support facilities, including building of whole new towns, resulted in copper production going from zero to a peak of 769 000 tons of copper in 1969. At the same time, the industry created jobs to the extent that in 1972 the industry had over 62 000 direct jobs. The industry was nationalized in 1973 and remained in government hands for just over 24 years. During this period, the industry experienced a serious decline in production levels, reaching the lowest level at the dawn of the 21st century in the year 2000 when production was 250 000 tons. In terms of jobs, an average of just under 2000 jobs were lost every year in the 24-year period, reaching just over 22 000 direct jobs in 2000. Following the return of Zambian politics to pluralism and liberalized economic policies, the government decided to privatize the mining industry. The process started in 1996 and by the year 2000 all the mining assets had been privatized. The new investors embarked on serious investment to upgrade the assets and to develop greenfield mining projects. Fourteen years later and investments of over USD 12 billion, the industry production levels increased year- on-year to reach a peak of 763 000 tons in 2013 with direct jobs reaching 90 000. This paper discusses the impact of the mining industry in Zambia on the economy in areas such as employment, support to other industries, direct contribution to the national gross domestic product (GDP), foreign exchange earnings and social amenities. The paper also focuses on the performance of the mines during these periods vis-à-vis mineral availability, mineral grades and complexity, new technologies and human capital. This is looked at particularly in the light of current challenges the industry is facing and makes suggestions on how the industry can be nurtured to continue being a major driver for the Zambian economy and a major player in the international copper mining business."

Jan 1, 2015

ME?s Arizona Conference was held at the Hilton El Conquistador resort in Tucson on Dec. 2 and 3, 2007. The annual conference is organized by the Arizona Conference Board of Directors, which represents SME sections in Arizona and adjacent areas. The conference provides an opportunity for individuals and corporations associated with mining in the region to get together once each year to discuss the status of the industry. The 2007 meeting featured a keynote address, a distinguished lecturer and more than 25 technical papers that were presented in seven sessions. The sessions included environmental, geology, safety, metallurgy, mining, new projects and a special session on Mexico. Topics covered included mine closure, sustainable mining, exploration methods, health and safety issues, mining equipment and drilling. Much of the discussion at the conference concerned major new developments in the region?s copper mining industry. For example, Freeport-McMoRan?s new Safford Mine and BHP Billiton?s Pinto Valley restart were the topics of technical presentations. There was also much discussion among the attendees on the current and future price of copper, community relations, education issues and recruitment concerns. At the time of the conference, the price of copper hovered around $3.30/lb, up considerably from the 61 cents/lb in late 2001, when the industry was being challenged by world market conditions and a weakened domestic economy. Since then, strong demand from China helped push copper prices to record levels that at one time reached as high as $4/lb. The general consensus among the attendees is that the current price of around $3.30/lb will continue through 2008. Most attendees also expect increased corporate investments in the industry to continue. Copper mining in Arizona has been a major industry since the 1800s. In 2007, Arizona was the leading copper-producing state in the United States and produced more than $5 billion worth of copper. The copper mining industry in Arizona also produces byproduct gold, silver and molybdenum. Arizona is the second largest molybdenum producer in the United States.

Jan 1, 2008

By W. F. MacIsaac

"The large low-grade Copper Mountain deposit is located in the northern portion of the Gaspé Cooper Mines property. It is approximately 1 mile north of the Needle Mountain deposit. The orebody outlined to date lies in the top 1,000 feet of the Grande Greve formation. Chalcopyrite occurs in association with pyrite and quartz in small veinlets and numerous fractures. The deposit is immediately adjacent and parallel to a quartz-feldspar dyke and may be associated with a nearby porphyry stock. Stratigraphy, alteration and structure appear to have played an important role in ore deposition."

Jan 1, 1969

By Victor Dolmage

"The localization of orebodies by geological structures is well demonstrated at the Copper Mountain mine of southwestern British Columbia. These extensive deposits; owned and workd by the Granby Consolidated Mining; Smelting and Power Company; are at Princeton; abo!lt 150 miles east of Vancouver and 40 miles north of the International boundary. The geology of the deposits and the surrounding district is described by the present writer in Memoir 171 of the Geological Survey of Canada; pub1ished in 1934.The main geological feature is a gabbro stock, elliptical in plan, with a major axis about 5 miles in length extending in a northwest-southeast direction. The stock varies in composition from syeno-gabbro (gabbro plus orthoclase) through diorite and syenite to a core of syenite pegmatite. All the members contain orthoclase, which ·increases greatly in amount toward the centre, but all are devoid of quartz. The stock has been injected into a steeply folded series of volcanic flows, breccias, and tuffs that strike more or less parallel with the major axis of the stock. On its northeast side the stock is flanked by a band of fairly coarse volcanic breccia of andesitic composition and ·having fragments up to several inches in length. Where this breccia is tangential to the stock it is both dynamically and chemically metamorphosed to a marked degree, and within the zone of this metamorphism are enclosed the copper deposit~. The ore consists of bornite, chalcopyrite, and a little magnetite occurring as disseminated grains and small veinlets in the metamorphosed breccias. The only gangue minerals are orthoclase, albite, oligoclase, and biotite. The two most common vein minerals, quartz and pyrite, are conspicuously rare or absent. The dynamic metamorphism has produced two well-defined structures, namely, a strong schistosity parallel with the curved vertical contact of the stock and a very striking set of small, straight, nearly parallel open fractures that stand nearly vertical and at right angles to both the schistosity and the stock contact. These are called the ore fractures."

Jan 1, 1954

By M. van de Vijfeijken

This paper will first give a short overview of the Copper Mountain project in British Columbia, which just has started commercial operation earlier this year. The grinding process with one 34' x 20' SAG mill and two 24' x 39.5' ball mills will be briefly discussed. All three mills are gear driven by a ring gear, dual pinion and two low speed synchronous motors. Copper Mountain has installed on all three mills, the new state-of-the art dual pinion mill drives. All the inherent operation and maintenance features of this drive technology will be discussed, as well as the advantage of having variable speed control also on the ball mills. The installation and commissioning of the mills and drives at Copper Mountain will be briefly reviewed. Finally the first field measurements on these low speed mill drives will be presented, with the main focus on the low mechanical stress impact of these mill drives on the pinion and ring gear, as well as the accuracy of the load sharing between the two motors.

Jan 1, 2012

Copper nickel separation is performed by mineral processing techniques both pre and post smelting in Copper Cliff at Vale Canada?s Operations. The separation at Clarabelle Mill takes advantage of the ore mineralogy to affect a separation on the rougher concentrate where chalcopyrite and pentlandite exhibit high liberation and high recoveries thus their separation is simple although incomplete. The copper concentrate comprises only 50% of the copper in ore with the remaining copper being separated post smelting in the Matte Separation plant where the slow cooled Bessemer Matte is again treated by mineral processing operations using flotation to separate the chalcocite and heazlewoodite and magnetic separators to remove a metallic nickel alloy. This paper discusses the mineralogy, separation processes and work currently underway to improve the separation of copper from nickel in these plants.

Sep 1, 2012

By Archer E., Wheeler

COPPER operations in the Congo mean the operations of the Union Miniere du Haut Katanga, because there are no other copper industries there. There is a mine at Bwana M'Kubwa, a little way to the South, in Rhodesia, which has been operated on a small scale, and-another farther south, the Falcon mine, but in quite a different section of the country. This Bwana M'Kubwa mine has recently been reorganized financially and the Minerals Separation interests have taken an extensive share in it, so that it may come into operation. The Union Miniere's operations are in Katanga, the most southeastern province of the Belgian Congo, and the company's concession is in the southeastern part of that province. The usual route for going into the country is by way of Cape Town, thence over the South African Railways through Kimberly and Mafe- king to Bulawayo, then by the Beira, Mashonland and Rhodesia Railways to the Rhodesia-Congo border, passing Victoria Falls on the way, and finally by the Belgian road, the Chemin de Fer du Katanga, to Elisa- bethville, the African headquarters of the company. From Cape Town to the border it is about 2150 mi. and from the border to Elisabethville about 158 mi., making a little over 2300 mi. from Cape Town, by rail.

Jan 1, 1924

Mount Isa Mines Limited has been mining copper ore for 50 years. In recent years, this production has been entirely by open stoping methods with cemented backfill, mostly in the large 1100 orebody.This has been the major ore source for 20 years, with smaller amounts coming from the 400, 500, 650 and 1900 orebodies. At present, the 1100 orebody is the only source, and this situation will continue until the deep 3000 and 3500 orebodies begin producing in late 1992/93. Production rates have increased to almost 6 Mt/yr, and are planned to rise to 7 Mt/yr by 1995/96. In the future, there will be a move towards variations of the open stoping system as production moves to more lensy zones of the southern 1100 orebody and to the deeper 3000 and 3500 orebodies. This paper describes current operations in the 1100 Orebody, with some indications of future directions.

Jan 1, 1993

By Archer E. Wheeler

IN the copper industry, the year 1942 was one of striving for larger tonnage and increased production. The demands of the war program placed copper high in the list of strategic metals and the Government encouraged production by offering a premium of 5c. per pound for copper output in excess of the 1941 quotas. This had the effect of increasing the tempo of existing operations and also of initiating a number of projects which will eventually result in production from sources not hitherto exploited. No radically new methods of copper reduction were reported.

Jan 1, 1943

By B. S. Butler

Introduction. THE New London copper mine, about 81, miles east of Frederick, Md., was visited by the Writers for a few hours in the spring of 1909 and the following brief notes on ore specimens collected are presented as a contribution to studies in chalcocite ores. For certain data on the structural and areal geology of this portion of Maryland the writers are under obligation to the unpublished notes and maps of Arthur Keith. The detailed study of the ores is the work of B. S. Butler. The deposit here discussed has many similarities to those of the Virginia district of Virginia and North Carolina, which have been described y Graton1 and Laney2, except that in the deposits of the New London mine chalcocite is by far the most important ore mineral, while in the Virginia deposits bornite is commonly-the most important sulphide. In the New London occurrence calcite is the most important gangue mineral.

Jan 7, 1914

By Jun Xiao, Xiaodong Li, Chunming He, Daixiong Chen

"Benzohydroxamic acid with double dentate can react with copper to form cyclic hydroxyl oxime acid copper chelate, indicating a good selectivity for copper oxide minerals flotation, especially for malachite. The flotation results of the pure malachite mineral show a strong synergistic collecting effect between hydroximic acid and xanthate at a ratio of 3.5:1, achieving a malachite recovery of 95.5% when certain sodium sulphide is used as a sulphidizing agent in the optimal pH range. Thanks to the synergistic collecting effect, the flotation recovery of malachite of a real refractory ore flotation ,can reach over 92% under the optimum condition, a 12% higher than the recovery achieved with the conventional collectors. In industrial application, the flotation of the copper oxide minerals is improved , leading to a high efficiency utilization of copper oxide resources.INTRODUCTIONBeneficiation of copper oxide ore is one of the recognized challenges in mineral processing industry. Copper oxide ore is a vital component of copper resource in the world, which has abundant reserves. Majority of sulphide deposits has oxidized zone on the top, and some deposits are oxidized to become the large and medium-sized oxide deposits (Willam & Chavez, 2001). Most copper oxide ores have problems in processing such as high slime consumption, poor floatability, complex ore property and low flotation recovery, so it is of great significance in beneficiation of copper oxide ores to develop an efficient collector, especially for malachite (Fu & Gu, 1997; Wen, 2010; Riet, Kier & Elford, 1980). At present, sulphidization-xanthate flotation is the most important method for treating copper oxide ore. In recent years, due to the decreasing ore grade, the utilization of refractory copper oxide ore draws more and more attention (Zhou, 2003), except for sulphidization-xanthate method, chelating flotation method (Lu, 2009), chemical beneficiation method (Lenormed, Salman & Yoon, 1979), microwave radiation flotation method, hydrothermal sulphidization-flotation method (Mao, Wen & Fang, 2014) and ammonia leaching of sulphide precipitation-flotation method (Lekang, Stevik & Bomo, 2003) have occurred."

Jan 1, 2016

By John V. Beall

There is an underlying surge to mining in the Philippines." So said A. R. "Ham" Reed, general manager Itogon-Suyoc Mines, Inc., to this reporter last November. Itogon-Suyoc is a small company with a struggling gold mine, a mixed sulfide mine and some prospects. In the Republic of Philippines (ROP), politics, which have an effect on mining, create some uncertainties. By July 1974, no mining company may have more than 40% foreign ownership. The ownership provision is a matter of concern to such important companies as Atlas and Benguet Consolidated and is generally considered a deterrent to new foreign investment. Under these circumstances, Reed's comments are of interest. On foreign prospectors: Don't come in cold; find a Philippine partner or buy into a company already here. Physical conditions of exploration are tough-terrain, communications -but the mineral potential is excellent.

Jan 4, 1969

By G. Hoffmeyer, I. Ream

"Several copper projects exclusively utilizing in-situ recovery methods are currently under development in Arizona. Favorable conditions for In-Situ Copper Recovery (ISCR) include a saturated orebody, fracture hosted mineralization, hydraulic conductivity sufficient to effectively inject and recover solutions using wells, and a relatively flat background hydraulic gradient. Safe operation of an ISCR project requires that the operator have the ability to induce and maintain localized hydraulic gradients, thereby controlling the movement of injected and recovered solutions. Benefits of ISCR include reduced initial capital, and a greatly reduced environmental footprint. THE ISCR METHOD EXPLAINED The method chosen to extract a mineral from a deposit is driven by characteristics such as its size, grade and depth of burial. Large lower grade deposits that require significant excavation to access using surface methods are potential candidates for in-situ recovery. ISCR may also be ideal for smaller deposits due to the lower initial capital. However, regardless of the size of the deposit, certain hydrogeologic conditions must be present for ISCR to be successful. In-situ recovery methods do not require excavations of rock from the surface or underground, resulting in a dramatic reduction in surface disturbance when compared to conventional mining. With the ISCR method, what is visible above ground is the processing plant, well heads, piping, process solution impoundments and evaporation ponds. There are no waste rock piles, tailings impoundments, leach pads, or impacts associated with blasting and hauling. Other benefits include reduced initial capital, reduced dust and noise, and lower water use. Early testing of the in-situ copper recovery method by Occidental on the Van Dyke deposit east of Phoenix and by Kennecott at Safford Arizona in the 1970s produced encouraging results, but the permitting regime for a large-scale operation was not yet in place. Additional testing and commercial application of in-situ copper recovery techniques have expanded since the 1980s, most commonly in conjunction with open pit or underground mining operations. For example, several operations in Arizona (San Manuel, Miami East and Tohono) have used in-situ techniques to extract additional copper following conventional mining from parts of the deposits adjacent to open pits or underground workings. Where the rock has been broken up by conventional methods, the method is called “in-place” leaching. The US government has also been involved in assessing in-situ techniques. For example, joint research was conducted by the US Bureau of Mines and industry on the Santa Cruz deposit in Arizona; and both federal and state agencies have been involved to establish the comprehensive permitting regime that exists today. Currently there are several projects in Arizona being evaluated as stand-alone ISCR operations."

Jan 1, 2016

By S. Acar, M. Botz

Introduction In 2007, Newmont Mining Corporation will begin construction of a milling and cyanidation leaching circuit for the Yanacocha site in Peru. Ore to be processed in the circuit contains a relatively high level of cyanide-soluble copper, and as a result, leach solutions are expected to contain elevated levels of copper and WAD cyanide. As the means of controlling copper levels in leach solution, a circuit will be installed to precipitate copper sulfide from barren solution using sodium hydrosulfide. In addition, a circuit will be installed to recover cyanide from barren solution, with recovered cyanide to be returned to the leaching circuit and treated solution to be utilized as make-up in existing heap leaching facilities. As needed to support design of the copper precipitation and cyanide recovery circuits, pilot testing was conducted in 2005 to determine preferred operating conditions and evaluate the performance of the processes. This paper presents results from the pilot testing where 99% copper reduction was achieved and 95% to 98% cyanide recovery was achieved.

Jan 1, 2007

"Copper was first made in Butte by the use of iron for its precipitation from mine water in 1890. In consequence of a fire breaking out in the St. Lawrence mine of the Anaconda Copper Mining Company in November, 1889, a large quantity of water was poured into the workings, with the intention of flooding the mine and extinguishing the fire. This proved to be impracticable, but this water, on being pumped to the surface, was found to be high in copper sulphate,—tradition says 75/100 of 1 per cent. The Anaconda Copper Mining Company gave Wm. Ledford a lease on this water. He first (lug holes into the ground, filled them with scrap iron and allowed the water to flow through them. Later he built an open-top flume which he partially filled with iron and passed the water through the by the iron precipitation method. An assay in- the year 1890 from Gagnon mine water, showed .0016 per cent or 28 lbs. copper per day. The mine was then opened to the 1,000 level.None of the mine waters encountered in the solid rock in the mines of Butte contained copper in sufficient quantity to produce the metal profitably by the iron precipitation method. An assay in the year 1890 from Gagnon mine water, showed .0016 per cent or 28 lbs. copper per day. The mine was then opened to the 1,000 level."

Jan 1, 1913

By S. N. Dixon

"Maximizing the value of each tonne of processed ore is the goal for all operations. Cyanidation processing of gold-copper ores has been challenging since its first use in 1889. The current practice treats a bleed or the total flow of mill solution to recover copper as copper sulfide (by sulfidization, acidification, recycling, and thickening), or to recover the cyanide (by acidification-volatilizationneutralization). The process presented uses the adsorption of copper cyanide by carbon and the selective elution of copper from carbon to concentrate copper into a smaller stream. Copper contained in the smaller stream is precipitated as copper cyanide.RÉSUMÉ Toutes les exploitations ont pour objectif commun d’optimiser la valeur de chaque tonne de minerai traité. Depuis sa première utilisation en 1889, la méthode de traitement par cyanuration des minerais aurifère et cuprifère s’est révélée complexe. La pratique actuelle traite la saignée ou le débit total d’une solution de traitement du concentrateur pour récupérer le cuivre sous la forme de sulfure de cuivre (par sulfuration, acidification, recyclage et épaississement), ou pour récupérer le cyanure (par acidification, volatilisation et neutralisation). Le procédé présenté dans cet article utilise l’adsorption sur charbon actif de la solution de cyanure de cuivre et l’élution sélective du cuivre depuis le charbon pour concentrer le cuivre en un plus petit jet. Le cuivre contenu dans ce plus petit jet est précipité sous forme de cyanure de cuivre."

Jan 1, 2017

By S. N. Dixon

"Maximizing the value of each tonne of processed ore is the goal for all operations. Cyanidation processing of gold-copper ores has been challenging since its first use in 1889. The current practice treats a bleed or the total flow of mill solution to recover copper as copper sulfide (by sulfidization, acidification, recycling, and thickening), or to recover the cyanide (by acidification-volatilization neutralization). The process presented uses the adsorption of copper cyanide by carbon and the selective elution of copper from carbon to concentrate copper into a smaller stream. Copper contained in the smaller stream is precipitated as copper cyanide.RÉSUMÉ Toutes les exploitations ont pour objectif commun d’optimiser la valeur de chaque tonne de minerai traité. Depuis sa première utilisation en 1889, la méthode de traitement par cyanuration des minerais aurifère et cuprifère s’est révélée complexe. La pratique actuelle traite la saignée ou le débit total d’une solution de traitement du concentrateur pour récupérer le cuivre sous la forme de sulfure de cuivre (par sulfuration, acidification, recyclage et épaississement), ou pour récupérer le cyanure (par acidification, volatilisation et neutralisation). Le procédé présenté dans cet article utilise l’adsorption sur charbon actif de la solution de cyanure de cuivre et l’élution sélective du cuivre depuis le charbon pour concentrer le cuivre en un plus petit jet. Le cuivre contenu dans ce plus petit jet est précipité sous forme de cyanure de cuivre.INTRODUCTIONProcessing gold-copper ores by cyanidation has been a cost-control challenge since the cyanidation process was first used in 1889. Copper cyanide is stable only in the cuprous state, not the cupric. This factor results in the oxidation of a mole of cyanide per mole of nonchalcocite copper extracted. Each mole of copper extracted forms a cyanide complex with a minimum of 3 mol of cyanide. This cyanide-to-copper mole ratio is required to dissolve gold. The oxidation of cyanide and copper complexation with cyanide results in high cyanide consumption for copper-gold ores, which is a significant operating cost.One challenge in processing gold-copper ore is the cost of cyanide related to the extraction of copper. Processing 10,000 t/d of ore containing 1,000 mg/kg copper and 10% copper extraction yields 1,000 kg/d of copper. Currently, processes to remove copper from cyanide leach solution treat either the total flow of the barren or a bleed of the barren. The two processes used for copper-gold ores are sulfidization, acidification, recycling, and thickening (SART), which produces a copper sulfide product for sale; and acidification- volatilization-neutralization (AVR), which recovers the cyanide from a gas and produces a low–cyanide content solution. This low–cyanide content solution can be recycled to the process or might require additional treatment before being disposed from the operation."

Jan 1, 2017

By C Tapia Cortez, C Sammut, S Saydam, J Coulton

‘Like every other commodity, the value of the metals is subject to variation’ (Ricardo, 1817). Mineral commodity price uncertainties have always been a significant issue in mining business due to the close relation between global economic conditions and commodity prices, which commonly generates significant and unexpected price fluctuations. Price forecasts have been driven by economic theory, which states that in the long-run market will be balanced and that prices tend to the marginal cost of production. However, this theory has been misunderstood in the mining industry and future prices through time, in real terms, are assumed to be unchanged. This is unrealistic due to regardless of the cycling nature of economy and the omission of uncertainties. Furthermore, using historical data in traditional price forecast approaches does not guarantee realistic predictions as past events will not necessarily be repeated at the same intervals and with the same intensity. Mining, finance and economic sectors have made significant research efforts to predict prices and control uncertainties through classic linear, Gaussian and probabilistic simulation approaches. However, by definition, uncertainties cannot be measured or accurately modelled. Uncertainties can be identified to measure and manage the associated risks; therefore, uncertainties in mining projects have been historically misinterpreted, erroneously measured and poorly controlled. It is widely known that supply and demand functions drive market prices. While technological development noticeably influences supply, demand is strongly driven by psychological factors, mainly related to customer preferences and lifestyle expectations. Thus, human behaviour is one, or if not, the most important variable to determine commodity prices in a competitive market. During the last decades, alternative methodologies have been used to study uncertainties in human, environmental and market behaviours. Chaos theory, fractals, artificial intelligence and econophysics have been widely and successfully used to investigate complex dynamic systems to address uncertainties over time in the fields of neurosciences, meteorology, aviation and market trading. The application of these techniques in the market suggests a more realistic approach to the business environment. Through the combination of the methodologies above a novel long-run price uncertainties simulation approach that emphasise the differences between risks and uncertainties is proposed in this paper. CITATION:Tapia Cortez, C, Saydam, S, Coulton, J and Sammut, C, 2015. Copper price uncertainties – chaos theory to manage risks in mining projects, in Proceedings Third International Future Mining Conference, pp 261–272 (The Australasian Institute of Mining and Metallurgy: Melbourne).

Nov 4, 2015

By Simon D. Strauss

This article is part of a presentation Strauss made Dec. 3, 1988 at the sixth annual American Mining Hall of Fame (AMHofF) banquet in Tucson, AZ. At the banquet, the Mining Club of the Southwest honored Strauss by naming him the 1988 recipient to the AMHofF. (Industry newswatch, page 6). Introduction In the last two decades, there have been two previous periods of sharply rising copper prices. One was in 1973-74; the other in 1979-80. In both cases, a short period of high copper prices was followed by steep and prolonged periods of low prices. In the language of the market analyst, the high prices were called spikes. Is it likely, then, that three or four years from now the present price of copper will show up as a spike in the charts? There are substantial differences between the current position and the markets of 1973-74 and 1979-80. In 1973-74, US copper prices were subject to government-imposed price ceilings of $0.60 per lb through early December, 1973. These were increased to $0.68 per lb through May, 1974. Meanwhile, mines outside the United States were free of restraint. Rising demand in London pushed the price above $1 per lb in the third quarter of 1973. In early April 1974, it reached a peak of $1.50 a lb. In May of that year, the US ceilings were removed and the domestic price began to rise. What were the causes of this price strength? While ceilings held the domestic price below the world market, domestic consumers acquired all the tonnage offered by US mines. Meanwhile, in the world market, buyers feared prolonged shortages. The Club of Rome had warned that world economic growth would be limited by impending depletion of mineral resources. There was al so concern about a copper cartel that might increase copper prices even more. In early 1974, at a special United Nations session, developing-country spokesmen warned the industrialized world to expect high commodity prices. Also adding to the concerns of copper buyers was the fear that when US wage contracts expired in mid-1974, protracted strikes might ensue. The combined effect of this atmosphere was that consumers accumulated large amounts of copper, far above their normal carry. By midsummer, the position changed radically. While some strikes did occur in the United States, they proved short-lived. The most significant development was a massive economic recession. The energy crisis was causing enormous dislocations in the world economy. Construction activities were sharply reduced and automobile sales plummeted. Public confidence was shaken. Copper sales fell precipitately as consumers decided to draw down their swollen inventories. The price came down too. In April 1974, the London price- as noted-was $1.50 per lb. By the end of the year, it was down to $0.57 per lb. In 1973-74, the copper price rise was fed by fears of shortages, cartels, and strikes. In 1979-80, the market rose on the strength of good demand plus political and military instability. The price rise was also fed by inflationary trends, exemplified by speculation in precious metals. Prior to this second spike in copper prices, the market had been depressed despite economic recovery. Despite reduced US output, copper production in the rest of the world was increasing. Though consumption was rising, surplus stocks reached unprecedented levels. At the end of 1977, the aggregate of stocks at the refineries and in the exchange warehouses was 1.5 Mt (1.67 million st). That was more than three months' shipments at then rates of consumption. In 1978, the statistical position improved. Shipments of refined copper that year were 8% greater than in 1977. The result was reduced visible stocks but -just as was to be the case in 1984-86 - the price remained depressed. In 1979, an even sharper drop in visible stocks occurred as shipments rose by another 4%. This time, though, the price responded. In December 1978, the price in current dollars had been less than $0.70 per lb. By the end of 1979, it was above $1 per lb. And in the first quarter of 1980, it averaged more than $1.20 per lb. Military and political developments were a factor. The hostage crisis in Iran was followed by the Soviet invasion of Afghanistan. To many, it appeared that war might result if the Soviets pushed on into Pakistan. At the same time, speculation drove gold and silver prices to incredible levels. As silver prices rose above $40 per oz), copper above $1 per lb did not seem unreasonable. Then, in March 1980, the precious metals price boom collapsed. Copper prices also retreated, though not as much. In February 1980, the copperprice averaged $1.32 per lb. By December, it had dropped to $0.85 per lb. In 1981 and 1982, the decline continued. The present copper situation Why is the current situation different from these two previous episodes of high prices? First of all, today's inventories are far lower than they were in either 1974 or 1980, when the price declines began. The stocks at refineries and in exchange warehouses are substantially less than they were then. More significantly, consumers today have very limited holdings compared with stocks they carried in 1974 and 1980. Even if faced with a downturn in their own business, copper consumers will not be able to stay out of the market. To the extent they have any business at all, they will have to buy copper. And on the supply side, there is also a significant difference. The year 1988 has been unusual. US production is up sharply, responding to higher prices. But production is little changed in the rest of the Free World. Indeed, several of the major producing countries have mined less copper this year than in 1987 despite the prices increases. Peru has had labor problems that have cut its output. Zambia and Zaire suffer from shortages of expatriate technicians, not to mention spare parts. They also suffer from the failure to maintain equipment or perform adequate development. In Chile, the two largest mines, Chuquicamata and El Teniente, have not met their production targets. Chuquicamata is struggling with high arsenic content in its ore. And, in late 1987, severe rockbursts hampered operations at El Teniente. In addition, depletion of some mines in Australia and South Africa has offset rising output at other properties. Indeed, when final mine output figures for 1988 become available, it may well be

Jan 1, 1989