Copper

Content maintained by Keith Porritt

• Copper
• Resources
• Accessible EDR
• JORC Reserves
• Exploration
• Production
• World Ranking
• Industry Developments

Australia is a major copper (Cu) producer with mining and smelting operations at Olympic Dam in South Australia (SA) and Mount Isa in Queensland (Qld). Other significant copper producing operations are at Cadia-Ridgeway, Northparkes and Tritton in New South Wales (NSW), Ernest Henry and Osborne (Qld), Nifty, Telfer and Golden Grove in Western Australia (WA), and Mount Lyell in Tasmania (Tas). Copper and copper alloys are used in building construction, electrical cables and electrical equipment as well as in industrial machinery and equipment. An average car contains more than 20 kilograms (kg) of copper and suburban homes have around 200kg of copper.

Australia's total demonstrated resources of copper rose by 7 million tonnes (Mt) in 2010 to 132Mt. Almost all of the increase occurred in SA.

Australia's Economic Demonstrated Resources (EDR) of copper rose by 5Mt to 85.6Mt, an increase of 7% on the EDR in 2009. South Australia has the largest EDR at 57.1Mt, which is 67% of the national total. Almost all of the SA EDR are associated with the Olympic Dam deposit, where EDR of 54.6Mt is unchanged from 2009 following a doubling of EDR during 2007 and 2008. New South Wales and Qld each have 13% of Australia's copper EDR. Queensland EDR rose 2Mt in 2009 as a result of increased or upgraded resources for Mount Elliott, Rocklands, E1 and Starra. The balance of Australia's copper EDR is largely in WA with 6%.

Inferred Resources rose by 13% to 43.3Mt in 2010 largely as a result of the two newly reported SA deposits of Carrapateena with 4.4Mt Inferred Resources and Hillside with 1.2Mt. South Australia holds 72% of Australia's Inferred Resources (mostly at Olympic Dam) followed by Qld 15%, WA 8% and NSW 4%.

All copper EDR is accessible.

Joint Ore Reserve Committee (JORC) Code Reserves account for around 29% of Accessible Economic Demonstrated Resources (AEDR). The remaining AEDR comprise those Measured and Indicated Resources reported by mining companies which Geoscience Australia considers will be economic over the long term. The copper resource life using national EDR divided by annual production is 98 years, but using the ore reserve and dividing by annual production gives a resource life of only 29 years.

Spending on exploration for copper rose by 94% in 2010 to $261 million. Expenditure in SA of $82 million was 31% of all copper exploration. Expenditure in Qld of $76 million represented a further 29%. The main areas of expenditure in SA were in the search for further Olympic Dam style mineralisation in the Gawler Craton. In Qld expenditure was in the Mount Isa and Cloncurry districts. Western Australia had 25% of spending on copper exploration across a range of projects, largely focused on seeking volcanogenic massive sulphide (VMS) ore deposits, including at DeGrussa. New South Wales had 9%, with the remainder in the Northern Territory (NT) with 4% and in Victoria and Tasmania, both with 1%. Expenditure on exploration for copper made up 10% of all mineral exploration.

In 2010, Australia's mine production of copper totalled 870 kilotonne (kt) of contained copper, 2% higher than in 2009 (853kt). Queensland continued as the top producer of copper with 280kt, largely from the Mount Isa region. This was 5% more than in 2009 and represented 32% of Australian production, but for a second year Qld production was significantly down on the historic average for the years 2000 to 2008 of around 400kt per annum (ktpa). South Australia held the second largest producer position with 244kt. Olympic Dam and the recently commissioned Prominent Hill mine produced almost all of SA's output, contributing 16% and 14% respectively of national production. Western Australia produced 169kt (19%), up 17%, mainly from Nifty, Golden Grove and Telfer. New South Wales produced 149kt (17%) in 2010, largely from Northparkes, Cadia, Ridgeway and Tritton. Tasmania produced 28kt, up 2%, mostly from Mount Lyell, but with some from Rosebery.

The value of Australia's exports of copper concentrates and refined copper in 2010 totalled $7.6 billion, up 30% on the $5.8 billion in 2009 but holding at 3% of the value of total merchandise exports. Australian dollar copper prices rose in 2010 breaking a run of three years of decreases, which, in turn, had followed three years of substantial rises prior to 2007. The average copper price was up 28% in 2010 to $8165 a tonne compared to the average of $6398 a tonne in 2009. The average copper price in the December quarter of 2010 was $8727, 12% higher than in the corresponding quarter of 2009. Copper exports in 2010 increased 7% to 845kt partly contributed to by the 2% increase in copper production.

Based on United States Geological Survey (USGS) data for other countries, Australia has the third largest world economic resources of copper (13%) after Chile (23%) and Peru (14%) and ahead of Mexico (6%), the USA, China, Indonesia and Russia with 5% each. As a producer, Australia ranks fifth in the world, with 5% of world copper production, after Chile (34%), Peru (8%) and China and the USA (both 7%).

Olympic Dam (SA): BHP Billiton reported that 132kt of copper cathode was produced during 2010. This was 15% less than in 2009 and 44% below the design capacity of 235ktpa. Production was greatly reduced following extensive damage to the Clark Shaft haulage system by a falling ore skip in October 2009. Ore hoisting continued at 25% of capacity from the secondary Whenan Shaft before the mine returned to full production during the June quarter 2010. Planned maintenance activities were brought forward during the repair period. Self-insurance claims associated with the Clark shaft incident totalled US$297 million in 2010/11.

BHP Billiton continued to investigate a series of staged capacity expansion options for Olympic Dam. Project activity was scaled back in 2010 to securing required approvals. In December 2010, BHP Billiton submitted a supplementary Environmental Impact Statement (EIS) for review by the Australian, South Australian and Northern Territory Governments in response to more than 4000 public submissions on the project as outlined in the draft EIS of May 2009. For the expansion project, the southern part of the deposit will be mined by a large open pit. Annual production of copper is forecast to increase four-fold to 750ktpa for Olympic Dam to become one of the world's largest mines. This will require major infrastructure for water, energy and transport as well as an expansion of the Roxby Downs township. The proposed expansion would be a progressive development, requiring construction activity over a period of 11 years. The project progressed to the feasibility study stage in March 2011.

Mount Isa and Ernest Henry (Qld): Copper-in-concentrate production in 2010 from Xstrata Plc's Mount Isa and Ernest Henry operations totalled 232kt, an increase of 18% on 2009. At Mount Isa, underground operations production was 158kt of copper-in-concentrate, a decrease of 3% on the previous year as a result of lower grades which was partially offset by higher tonnages of ore mined and milled and improved recoveries. At Ernest Henry, copper-in-concentrate production increased 110% to 75kt because of higher mining rates, mill head grades and throughput. The Mount Isa smelter produced 215kt of anode (214kt in 2009). Using anode from the Mount Isa smelter plus some anode from Xstrata's Altonorte smelter in Chile, the Townsville refinery produced a record 287kt of copper cathode, an increase of 3% on 2009.

At the Mount Isa underground copper operations underground drilling exploration in 2010 again focused on mineralisation associated with existing orebodies and this will continue into 2011. A concept study into a large scale zinc and copper open pit as an extension to the current Black Star open pit mine was commenced in the second half of 2010. A pilot plant leaching trial of the Mount Isa concentrator tailing commenced in late 2010 as part of a pre-feasibility study into potential recovery of residual copper and cobalt.

Conversion of Ernest Henry from an open pit to an underground copper-gold mine with magnetite credits continued. Construction of the large scale underground sub-level cave mine reached 11 066 metres of completed development by the end of 2010. Design, construction and initial production and testing of the 1.2Mtpa magnetite plant also was completed in 2010. Plant commissioning and export of the high-grade magnetite product from Townsville port is scheduled for 2011. Regional exploration drilling continued to focus on targets in the Cloncurry and Mount Isa region which have the potential to provide additional ore feed to the Ernest Henry and Mount Isa plants.

Prominent Hill (SA): 2010 was the first year of full production at Prominent Hill and OZ Minerals Limited reported 112kt of copper and 196 400 ounces (ozs) of gold contained in concentrate were produced. Gold production was more than double the original forecast because of higher than expected quantities of gold-only ore being processed. Plant commissioning was completed in April 2009 and for 2010, the plant throughput rate was 19% above design capacity. Prominent Hill concentrates are the highest grade copper-in-concentrate traded on the open market, with copper grades of around 50%. Prominent Hill concentrates are transported 120 kilometres (kms) to the Adelaide to Darwin railway and to the Port of Darwin, which offers a shipping time of around two weeks to most Asian ports.

In July 2010, final board approval was granted for the development of an underground mine to access the Ankata deposit, originally known as the Western Copper Zone. The Ankata high grade ore will contribute an average of 25kt of copper and 12 000ozs of gold each year for five years, augmenting ore from the Malu open pit 800 metres away. The Ankata mineralisation was discovered in 2007 when drilling was carried out on the Western Gravity Ridge. Following deposit definition through a series of exploration programs finishing in early 2010, a feasibility study was completed in June 2010. Development of the Ankata decline is underway and full production is expected by the third quarter of 2012. In 2010, further near mine drilling revealed a new copper zone known as Kalaya, together with new copper intersections within the Munda zone and near the Papa zone. The Ankata decline will be used for further drill testing of the Munda and Kalaya zones from mid 2011.

Cadia-Ridgeway (NSW): Copper production was 26kt for Cadia and 17kt for Ridgeway for 2010. Ridgeway's production was 10kt less than in 2009 because of transition from the sub-level cave to the Ridgeway Deeps block cave, which has been completed. The Ridgeway gold-copper mine is located 3kms from the Cadia Hill open pit and the top of the Ridgeway deposit lies approximately 500 metres below the surface. Ridgeway Deeps was successful in ramping up to a design production rate of 6Mtpa. The Cadia Hill pit is nearing completion and has a forecast mine life to early 2013.

The Cadia East project feasibility study was completed by the end of 2009. In January 2010, the New South Wales Government granted Newcrest Mining Limited the approval to proceed with the construction of the A$1.9bn project. The Cadia East underground panel cave mine will be Australia's largest underground mine and will underpin production from the Cadia Valley province for at least the next 30 years. Construction began in April 2010. Cadia East will enable production to increase to around 100kt of copper and 800 000ozs of gold per year with the first commercial production expected in mid-2012. The existing Cadia Valley processing plant capacity will be expanded from 24Mtpa to 26Mtpa.

Carrapateena (SA): In April 2010 Reuters reported that RMG Services Limited and Teck Resources were seeking buyers for the Carrapateena deposit estimated to have 4.4Mt of copper and 6 million ounces (Mozs) of gold. Subsequently, on 9 March 2011, OZ Minerals Limited purchased the Carrapateena deposit for US$250 million and three weeks later released an Inferred Mineral Resource for the southern portion of Carrapateena of 203Mt at 1.31% Cu and 0.56g/t Au, equating to 2.7Mt of copper and 3.7Mozs of gold. Discovery of the Carrapateena deposit in 2005 by Rudy Gomez of RMG Services was co-funded by the South Australian Government's Plan for Accelerating Exploration (PACE) incentive program. Mineralisation has been intersected over a vertical height of approximately 1000 metres. The deposit is roughly cylindrical and its top is located 470 metres below the surface.

DeGrussa (WA):In mid-2009, Sandfire Resources NL discovered high-grade VMS copper-gold mineralisation at DeGrussa, located 900km north of Perth and 150km north of Meekatharra. The discovery hole included an intersection of 53.2 metres at 17.3% Cu and 2.5g/t Au. In September 2010 Sandfire reported for DeGrussa a Measured, Indicated and Inferred Resource totalling 10.67Mt at 5.6% Cu, 1.9g/t Au and 15g/t Ag containing 600kt of Cu, 0.66Mozs Au and 5.1Mozs Ag. By November 2010 the DeGrussa metal inventory increased to 644kt Cu and 0.72Mozs Au as the result of an increase in the oxide copper resource from in-fill drilling. Proposed early stage mining will include 151kt of direct shipping material grading 25.6% Cu and 2.6g/t Au.

Hillside (SA): In December 2010, Rex Minerals Limited released an updated estimate for the Hillside copper project of an Inferred Mineral Resource of 170Mt at 0.7% Cu and 0.2g/t Au, containing 1.2Mt Cu and 1.1Mozs Au. The maiden resource of 100Mt at 0.7% Cu and 0.2g/t Au was released in July 2010.

Rocklands (Qld): In August 2010, Cudeco Limited released an updated Measured, Indicated and Inferred Resource estimate for Rocklands, using a copper equivalent cut off of 0.15%, of 245Mt at 0.21% Cu, 0.04g/t Au and 177ppm Co, containing 510kt Cu, 0.34Moz Au and 43kt Co.