"The common-held view of the future of copper mining is one of declining quality of mineral resources and increasingly limited long-term development options. This decline, in turn, is viewed as inevitably leading to increasing economic, socio-political and environmental costs. As a result, new technologies and innovations will be required to mitigate cost escalation. The future is therefore typically summarised as a battle of a ‘below-ground’ declining quality asset base pushing costs upward versus ‘above-ground’ technology and innovation driving costs downward. The role that high quality new mineral discoveries could play in mitigating industry cost pressures is typically understated, if considered at all. New high quality discoveries can be mined at lower cost than existing assets and potentially if discovered in the right locations within a more amenable contemporary environmental and socio-political setting. Such deposits, once discovered, would improve the overall quality of the industry asset base, as well as benefitting their owners substantially through higher margins. However, to target new high quality deposits explorers need some understanding of the nature of high quality copper mines in the long-term future. Conventional scientific and economic techniques for analysing the future of copper supply, generally by studying the project pipeline, ignore as yet undiscovered resources and also struggle to fully incorporate the multiple internal and external factors that could impact upon copper mining practices in the future.Scenario analysis is specifically designed to consider multiple factors interacting in the future, and is thus more creative than simply looking at the visible project pipeline. The use of scenarios is therefore potentially capable of providing insight into aspects of the future of copper mining about which little is currently known or that remains considerably uncertain. In this study, the Oxford University Scenarios methodology was employed to analyse different plausible futures for copper mining and the consequent implications for exploration targeting strategies. The scenario analysis highlights two key dimensions or axes that serve to map out potential industry futures: firstly the technical and economic optimisation of the existing industry; and secondly the generation of new prospects or ‘search space’ for the copper industry. These two axes in turn frame four different scenarios for the future of the copper mining industry. These copper mining scenarios are then compared to the 20 largest existing copper mines and projects, and their owners, to determine if any represent an appropriately robust exploration targeting proxy: none do. The paper therefore concludes that efforts by industry are required to generate mine concepts that would be viable across all scenarios, and thus act also as exploration targeting proxies. In the interim, companies will have to seek to build portfolios that create an overall robust asset base, out of individually less robust assets. Failure to do this implies that consequential, irreversible strategic decisions lie ahead for the copper mining industry, which may be a threat to both incumbents and the very industry itself. This situation makes strategic exploration targeting in the copper industry very difficult.CITATION:Sykes, J P and Trench, A, 2016. Using scenarios to investigate the long-term future of copper mining and guide exploration targeting strategies, in Proceedings International Mine Management Conference, pp 265-290 (The Australasian Institute of Mining and Metallurgy: Melbourne)."
Using Scenarios to Investigate the Long-term Future of Copper Mining and Guide Exploration Targeting Strategies