Everyone is talking about "declining global copper ore grades". Many companies' reports also state that due to the decline in grades, the output of a certain mine has also decreased year-on-year. Some readers hope to have a quantitative figure so that it can be incorporated into the prediction model for consideration. What is the rate of grade decline exactly? How much does it affect the copper output of mines each year?
Today, I found a 2017 report with clear charts for reference. Although the year is a bit early, the long-term trend should not be too different. We can make a quantitative estimation based on this chart.
Using AI to read the chart, the identified and fitted data results are as follows:
Average copper grade in 2020: 0.91%
Average copper grade in 2030: 0.86%
Annualized compound growth rate over the decade: -0.56%
So, based on this data, when making future predictions for the growth of copper mine supply, one can incorporate the grade decline factor, approximately a 130,000-tonne per year downward adjustment (Note: This result may deviate significantly from the actual situation due to factors such as selected time range, short-term fluctuations, and prediction errors, and is provided for reference only).
Those who are not familiar with geology and mining may find it difficult to understand the reasons for the decline in grade. I believe there are mainly three aspects:
Geological factors - Secondary enrichment effect of near-surface ore bodies: For porphyry copper deposits, there is usually an oxidized zone at the surface, and copper is mainly present in oxides such as malachite, azurite, and chalcopyrite; the weathering leaching process promotes the migration and re-enrichment of copper elements, so the ore in the oxidized zone usually has a higher copper grade. The underlying primary ore bodies have basically not undergone surface weathering, and the main copper-bearing minerals are chalcopyrite, often accompanied by a large amount of pyrite, and the grade of the primary ore is relatively low. In the early stage of mining, it is mainly secondary oxidized ore with a high grade, and in later stages, it is mainly primary sulfide ore with a gradually decreasing grade. It should also be noted that this rule does not apply to all mines. If a copper deposit is entirely a concealed primary ore body, then this secondary enrichment factor does not exist.
2. Mining Factors - Sequence of Mining: In actual mining plans, numerous factors are taken into consideration. Grade is one of the important factors. Companies tend to prioritize the mining of high-grade ore bodies or sections to achieve the rapid return of cash flow;
Economic Factors - Re-evaluation of Economicity: After the copper price rose, low-grade projects became more economically viable. Therefore, some low-grade mines, even those that had been previously mined out or tailings, would be redeveloped; or the low-grade ore within the same mine might have been planned not to be recovered originally, but after the copper price rose, it began to enter the processing plant for recovery. Thus, the overall data reflects the decline in average grade.