Copper occurs in many forms, and in a variety of geological settings. There are various factors to consider in determining the value of a copper deposit. Historically, the most profitable mines have been large scale porphyry deposits, with chalcopyrite mineralization extracted via open-pit mining. When assessing the potential of a copper deposit, exploration companies consider the estimated copper resource, the grade of the copper, the ease at which the copper can be mined and the cost of refining the copper. However, the most profitable mines with their porphyry deposits and chalcopyrite mineralization defy this logic because the grade of the ore is not the highest, and the refining costs are more expensive. However, due to the fact that chalcopyrite is formed in a variety of geological settings, within various mineral assemblages, chalcopyrite deposits have the largest overall resource. The total size of the reserve often trumps grade and refining costs.
One of the largest copper mines in the world is the Escondida mine in Chile. Escondida means “hidden” in Spanish, and the deposit was given the name because there are no outcrops; in fact the main orebody is hidden below hundreds of meters of overburden. Copper production figures change rapidly, but in 2007 Escondida was the highest producing copper mine in the world. In 2007, the mine produced 1.483 million tonnes of copper worth US$10.12 billion. Escondida produces mainly copper concentrates, and sulfide ore, which contributes to 77 percent of the recoverable copper reserve.
Considerations behind Determining the Value of a Copper Deposit
Type of Deposit
Porphyry copper deposits are the largest source of ore, supplying nearly 60 percent of the world’s copper. Porphyry ore bodies typically contain between 0.4 and 1.0 percent copper in concert with smaller amounts of other metals such as molybdenum, silver and gold. Porphyry deposits are massive, and extracted by open pit mining. Copper bearing sedimentary rocks are the second most important deposit, accounting for approximately one quarter of the world’s identified copper deposits. Other types of copper deposits include volcanogenic massive sulfide ore deposits or VMS, a source of copper sulfide formed through hydrothermal events in submarine environments. Iron oxide copper gold ore deposits (IOCG) are highly valuable concentrations of copper, gold and uranium ores. Copper Skarn deposits, in the broad sense, are formed through chemical and physical mineral alterations created when two separate lithologies make contact.
Most copper ores contain only a small percentage of copper metal bound up within valuable ore minerals, with the remainder of the ore being unwanted rock. Exploration companies conduct drilling programs to extract samples of rock, called cores. The cores are subject to chemical assays to determine the “grade” of a deposit. Grade effectively is a measure of the concentration of metal. Grade is usually expressed as a weight percentage of the total rock. For example, 1000 kilograms of copper ore that contains 300 kg of copper metal has a grade of 30 percent. When the metal is at a much lower concentration, you may hear it described in terms of parts per million. However, with copper, grade is the common convention. Grade is a significant factor in how much a copper deposit is worth. Exploration companies estimate grade through drilling and assaying. The average grade of copper ores in the 21st century is below 0.6 percent Cu, with a proportion of ore minerals being less than 2.0 percent of the total volume of the ore rock. Approach grade estimates with a critical eye. When an exploration company issues grade statements make sure you compare it to the total depth of the drill core used to determine the grade. A high grade to a low depth can have far less value than a mediocre grade consistent through a deep core.
The largest, most profitable copper mines have been open pit mines. Of particular importance, in an open pit mine is a resource that is relatively close to the surface. Mining companies are particularly interested in the amount of overburden, which is the amount of worthless rock and soil on top of the copper resource. This material will have to be removed to access the resource. Once again, going back to the Escondida example, a resource covered with a large amount of overburden, a large resource can compensate for overburden.
Types of ore
There are two distinct types of copper ore, sulfide ore and oxide ore. Currently, the most common source of copper ore is the sulfide ore mineral chalcopyrite (CuFeS2), which accounts for about 50 percent of copper production.
Sulfide ores are refined via froth floatation. Copper ores containing chalcopyrite can be concentrated to produce a concentrate with between 20 percent and 30 percent of copper-in-concentrate. The more valuable chalcocite concentrates typically grade between 37 percent and 40 percent copper-in-concentrate, due to the fact that chalcocite has no iron within the mineral. Chalcocite is an important copper mineral ore. It 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 ease at which copper can be separated from sulfur. It is not, however, the primary ore of copper today due to its relative abundance. Oxide ores are leached with sulfuric acid, which is more economical compared to froth floatation.
Primary and Secondary Ores
The most profitable mines have different mineral assemblages. The primary assemblage is the mineralization type that is most prevalent. Secondary ores can add a great deal of value to a deposit. The Escondida mine is primarily a chalcopyrite porphyry deposit overlain by secondary oxides. Don’t discount secondary mineralization. It can add a great deal of value to the resource.
In conclusion, a world class deposit is one in which the value of the copper reserve far exceeds the cost of mining and refining. To date, some of the biggest copper finds have been the Kennecott Copper Mine, a large scale porphyry deposit, Escondida, and the Chuquicamata copper porphyry complex.