How is the value of a copper deposit determined?
There are many factors to consider when determining the value of a copper deposit. Among other factors, companies must consider grade, refining costs, estimated copper resources and the ease of mining the copper. Below is a brief overview of several things to consider when determining the value of a copper deposit.
1
What types of copper deposits are there?
Porphyry copper deposits are low-grade but are an important source of copper because they can be mined on a large scale at low cost. They typically contain 0.4% to 1% copper and small amounts of other metals such as molybdenum, silver and gold. Porphyry copper deposits are typically massive and extracted through open pit mining.
Copper-bearing sedimentary rocks are the second most important type of copper deposits, accounting for approximately one-quarter of the world’s discovered copper deposits.
Other types of copper deposits found around the world include:
Volcanogenic massive sulfide (VMS) deposits are sources of copper sulfide formed through hydrothermal events in seafloor environments.
Iron oxide-copper-gold (IOCG) deposits are high-value concentrations of copper, gold and uranium ores.
Copper skarn deposits, broadly speaking, are formed through chemical and physical mineral alteration that occurs when two different lithologies come into contact.
2
What is the average grade of copper deposits?
Grade is an important factor in the value of a mineral deposit and is an effective measure of metal concentration. Most copper ores contain only a small portion of the copper metal bound into valuable ore minerals. The rest of the ore is just unwanted rock.
Exploration companies conduct drilling programs to extract rock samples called cores. The core is then chemically analyzed to determine the “grade” of the deposit.
Copper deposit grade is usually expressed as a weight percent of the total rock. For example, 1000 kilograms of copper ore contains 300 kilograms of copper metal with a grade of 30%. When the concentration of a metal is much lower, it can be described in terms of parts per million. However, grade is the common convention for copper, and exploration companies estimate grade through drilling and assays.
The average copper grade of copper ore in the 21st century is less than 0.6%, and the proportion of ore minerals in the total ore volume is less than 2%.
Investors should view grade estimates with a critical eye. When an exploration company issues a grade statement, investors should be sure to compare it to the total depth of drill core used to determine grade. The value of high grade at low depth is much lower than the value of mediocre grade consistent through a deep core.
3
How much does it cost to mine copper?
The largest and most profitable copper mines are open-pit mines, although underground copper mines are not uncommon. The most important thing in an open pit mine is the resource relatively close to the surface.
Mining companies are particularly interested in the amount of overburden, which is the amount of worthless rock and soil above the copper resource. This material must be removed to access the resource. Escondida, mentioned above, has resources that are covered by extensive overburden, but the deposit still has economic value due to the large amount of resources underground.
4
What are the types of copper mines?
There are two distinct types of copper deposits: sulfide ores and oxide ores. Currently, the most common source of copper ore is the sulfide mineral chalcopyrite, which accounts for approximately 50% of copper production. Sulfide ores are processed through froth flotation to obtain copper concentrate. Copper ores containing chalcopyrite can produce concentrates containing 20% to 30% copper.
The more valuable chalcocite concentrates are usually of higher grade, and since chalcocite contains no iron, the copper content in the concentrate ranges from 37% to 40%. Chalcocite has been mined for centuries and is one of the most profitable copper ores. The reason for this is its high copper content, and the copper it contains is easily separated from the sulfur.
However, it is not a major copper mine today. Copper oxide ore is leached with sulfuric acid, releasing the copper mineral into a sulfuric acid solution carrying a copper sulfate solution. The copper is then stripped from the copper sulfate solution (called a rich leach solution) through a solvent extraction and electrolytic deposition process, which is more economical than froth flotation.
Post time: Jan-25-2024
