Copper

Content maintained by Keith Porritt

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

Australia is a major copper producer with mining and smelting operations at Olympic Dam (SA) and Mt Isa (Qld). Other significant copper producing operations are at Northparkes, Cadia Ridgeway and Tritton in NSW, Ernest Henry, Osborne, and Mt Gordon in Qld, Nifty and Golden Grove in WA and Mt Lyell in Tas. Copper and copper alloys are used in building construction and electrical equipment such as electrical cables as well as in industrial machinery and equipment.

Total Australian resources of copper rose by 21.7 Mt in 2007. The increase occurred almost wholly in SA.

Australia's economic demonstrated resources (EDR) of copper rose by 17 Mt to 59.4 Mt, an increase of 40% for the year. South Australia has the largest EDR at 43 Mt, which increased by 63% in 2007 to be around 72% of the national total. Almost all of these resources are associated with the Olympic Dam deposit where, with the release of new data in 2007, EDR rose by 16.6 Mt to 41.8 Mt. Queensland has the second largest EDR with 12% of the national total, followed by NSW (7%) and WA (6%).

Subeconomic demonstrated resources increased by 13% to 8.5 Mt, made up of 6.9 Mt in the paramarginal category and 1.6 Mt in the submarginal category. Most of the paramarginal demonstrated resources are in Qld, WA and NSW with 45%, 18% and 12% respectively. A range of deposits are being evaluated in all three States, including the Blackard and Little Eva deposits (Roseby project), and Mt Dore deposit in the Mt Isa region of Qld, the Maroochydore deposit in WA, and the Copper Hill and Woodlawn deposits in NSW.

Inferred Resources rose by 11% to 38.5 Mt in 2007. South Australia holds 70% of Australia's Inferred Resources (mostly at Olympic Dam) followed by Qld 13%, WA 8% and NSW 6%.

All copper EDR is accessible.

JORC Code reserves account for around 31% of 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.

Spending on exploration for copper rose by 49% in 2007 to $263.7 million. Expenditure in SA at $118 million was 45% of all copper exploration and was directed mainly to resource definition drilling at Olympic Dam and the search for further Olympic Dam style mineralisation in the Gawler Craton. Queensland had 29% of spending on copper exploration across a range of projects and WA had 13%, with the remainder largely in NSW with 11% and to a lesser extent in the Northern Territory with 2%. Expenditure on exploration for copper made up 13% of all mineral exploration.

In 2007, Australia's mine production of copper totalled 871 kt of contained copper, similar to that in 2006 (875 kt). Queensland continued to dominate production with 376 kt, largely from Mt Isa, which was 7% more than in 2006 and represented 43% of Australian production, up from 40% in 2006. South Australia regained the second largest producer position over NSW despite a decrease of 3% to 179 kt. Olympic Dam produced all of SA's output, contributing 21% of national production. New South Wales produced 168 kt in 2007, 19% less than in 2006 and mostly from Cadia Ridgeway and Northparkes. Other production saw WA produce 118 kt, up 14%, and Tas produce 30 kt, down 3%.

The value of Australia's exports of copper concentrates and refined copper in 2007 totalled just under $6.4 billion which was only slightly down on the $6.6 billion in 2006 and steady at 4% of the value of total merchandise exports. Copper prices levelled off in 2007 after three years of substantial rises, with the average down 5% to $8,512/t compared to the average of $9,003/t in 2006. Exports in 2007 decreased 2% to 707 kt in line with the slightly decreased copper production.

Based on USGS data for other countries, Australia has the second largest EDR of copper (12%) after Chile (30%) and ahead of the USA and Indonesia (both 7%) and Peru, Poland and Mexico (all 6%). As a producer, Australia ranks fifth in the world with 6% after Chile (37%), Peru and the USA (both 8%) and China (6%).

Olympic Dam (SA): Production for 2007 totalled 179 kt of copper cathode. This was 3% less than in 2006 and 17% below the plant capacity of 215 ktpa. Lower production was due to a scheduled smelter shut down, lower head grades and fewer tonnes milled. BHP Billiton continued with a pre-feasibility study to examine capacity expansion options with open-pit being the preferred mining method. The project would more than double copper production with Olympic Dam becoming one of the world's largest mines. This would require as a consequence, major infrastructure for water, energy, transport and a township expansion. The scheduled timeframe for the project is conclusion of the feasibility study by early 2009 and construction from 2009 to 2013, resulting in operation of the expanded facilities from 2013 onwards. Additional drilling (542 surface and underground drill holes for 240,000 m) has provided significantly more information to assist in geological interpretation. BHP Billiton reported a 77% tonnage increase and 38% copper metal increase in the Olympic Dam resource base. Major factors contributing to the increase in resource tonnage were a lower cut-off grade to reflect open-cut mining, higher long-term metal price forecasts and modelling changes. A non-sulphide gold only ore type mineral resource was reported separately for the first time.

Mt Isa and Ernest Henry (QLD): Copper-in-concentrate production in 2007 from Xstrata's Mt Isa and Ernest Henry operations totalled 268 kt, a decrease of 3% on 2006. Lower head grades at Mt Isa reduced production by 9% compared to 2006, but was largely offset by higher tonnages mined and improved head grades at Ernest Henry where production increased by 14% year-on-year. Smelter production of 218 kt copper was 2% higher than in 2006 and the Townsville refinery saw production increase by 11% to 232 kt compared to 2006. A series of projects to increase capacity at the refinery to 300 ktpa were completed in October 2007. The expanded refinery capacity enabled anode from Xstrata Copper's Altonorte metallurgical facility in Chile to be refined at Townsville during the fourth quarter. A concurrent expansion of the Mt Isa smelter to 300 ktpa was largely completed in 2007. This is designed to match the total copper-in-concentrate production from the Mt Isa and Ernest Henry copper mines.

In 2007, pre-feasibility studies progressed on underground bulk mining options for both Mt Isa and Ernest Henry mines with the aim to progressively increase the Mt Isa hoisting and milling rates to 7 Mtpa and to extend the mine life at both sites. The study included drilling that confirmed extensions to the Ernest Henry ore body for at least another 400 m below the final stages of the open pit. Xstrata will now spend $26 million on the first stage of an underground decline at Ernest Henry which is expected to be completed in 2009. The 3.2 km decline will be part of conversion of the mine to an underground operation and facilitate further evaluation as the decline is being developed. At Mt Isa, pre-feasibility drilling on the 500 ore body enabled a significant upgrade of 25 Mt of resource to an indicated status from an inferred category. The study into underground bulk mining options is expected to be completed by the end of 2008 with a full scale feasibility study planned for 2009.

Prominent Hill (SA): This new copper-gold mine is on schedule to be producing in the third quarter of 2008. Construction was almost 50% complete by the end of 2007. Pre-stripping of the 100 m of sedimentary cover had exposed the ore body and mining and stockpiling of ore was underway. In the first full year of operation, 2009, Prominent Hill is expected to produce almost 120 kt of copper and 80,000 oz of gold in concentrates. The capital cost of the project increased by around 30% to $1,080 million due to a combination of scope changes to improve the process plant and infrastructure, tight construction market conditions and cost increases in materials and equipment. Oxiana Limited (now renamed OzMinerals Limited) reported the discovery of further copper and gold resources both deeper and laterally to the present ore body. Consequently Oxiana is considering expanding throughput and extending the mine's life beyond the current 10-year pit. Work has commenced on studies of underground mining and expansion which could see mine life extended to 2030.

Nifty (WA): Ramp up of the underground Nifty sulphide project was completed in mid 2007 following commissioning in March 2006. Aditya Birla Minerals reported 53 kt of copper-in-concentrate was produced in 2007. The current expected mine life is 12 years at an average production rate of 60 ktpa from a reserve of 22 Mt at 2.5% Cu contained within a total resource of 43.5 Mt at 2.4% Cu. The Nifty oxide open pit ceased operations in mid 2006. The oxide operations from flushing existing heaps produced 5 kt of copper cathode during 2007, down from 15 kt in 2006. Consolidation and impermeable layers are reducing percolation, so a project for retreatment of the heaps by remining, desliming and restacking was approved. Costing $25 million for material handling equipment and a desliming plant, it is expected to be commissioned by mid 2009. The total material to be retreated is 15 Mt at 0.5% Cu over 7 years for 40 kt of available contained copper.

Northparkes (NSW): Production for 2007 was 43 kt of contained copper, down from 83 kt in 2006. Rio Tinto reported production was constrained by premature shutdown of the E26 Lift 2 due to the ingress of clay at the underground drawpoints. Ore was and will continue to be sourced from stockpiles, the E22 open pit and the Lift 2 North block cave, until production commences from the E48 block cave in 2009. The E48 block cave project will cost around $200 million and extend mine life until 2016. Current reserves for Northparkes are just under 48 Mt at 1% Cu and 0.4 g/t Au.

Roseby (QLD): The Roseby copper project consists of more than 10 deposits in a 25 km north-south corridor that includes the Blackard, Scanlan, Little Eva, Lady Clayre and Bedford deposits. Universal Resources Limited announced a new feasibility study had resolved previous issues associated with the Roseby project. Phasing in of the development is expected to substantially reduce the upfront capital cost on the basis of an initial 4 Mtpa throughput producing around 20 ktpa of copper-in-concentrates. A decision to expand the operation to around 8 Mtpa, producing around 40 ktpa of copper-in-concentrates is likely to be taken about 12 months after commissioning the first phase with completion in a further 2 years. If no expansion occurs, the Phase 1 operation is expected to have a mine life of 13 years from reserves of 51 Mt at 0.69% Cu and 0.05 g/t Au.

Mt Gordon (QLD): Production for 2007 was 24 kt of contained copper, which was similar to 2006. Aditya Birla Minerals Ltd announced its intention to embark on Phase 1 mining in mid-2008 at the Esperanza South deposit. The Esperanza South resource is estimated at a total of 3.3 Mt grading 2.6% Cu. The development of the Esperanza South Project increases the production rate at the Mt Gordon operation, extends the life of the mine to mid-2011 and provides the foundation for further extension of mine life.

Lady Annie (QLD): CopperCo Ltd officially opened operations at the Lady Annie copper project in October 2007. Production started at a rate of 19 ktpa and is expected to be ramped up to 25 ktpa by mid 2008 with 30 ktpa targeted thereafter. Copper cathode will be sold to Glencore International Ag under an off-take agreement for the life of mine production, which is estimated at nine years. The project consists of open pit mining from several deposits including Mt Clarke, Lady Annie, Flying Horse, Mt Kelly Workings, Swagman and Lady Brenda. CopperCo has invested more than $100 million in the Lady Annie Project which has a resource inventory of 40 Mt at 0.9% Cu for 359 kt of contained copper.

Browns (NT): Compass Resources reported significant cost increases in the development of the Browns base metals oxide project to well over $100 million. The operation is undergoing commissioning in 2008 and is expected to produce about 10 kt copper cathode, 1 kt cobalt and 750 t nickel annually from the 10-year, 1 Mtpa project. Compass said the cost-estimate increase resulted largely from additional works and extended construction time, but greater competition for equipment and construction personnel also had affected costs.

Leichhardt (QLD): In April 2007, Matrix Metals commenced mining copper oxide ore from the Mt Watson open pit for processing 30 km south at its refurbished Mt Cuthbert plant using heap leach and solvent extraction electrowinning to produce copper cathode. Glencore International Ag has an agreement to buy 100% of the cathode over the life of mine. The ramp up for Stage 1 of the project to 5.5 ktpa of copper cathode was completed on schedule in October 2007. In December 2007, Metals committed to a further scale-up of production to 9 ktpa copper cathode at an estimated cost of $5.5m by increasing plant throughput from 700 ktpa to 1 Mtpa from an oxide resource of around 8 Mt at 1% Cu.

Kanmantoo (SA): In December 2007, Hillgrove Resources Limited released a definitive feasibility study for the Kanmantoo copper gold project and announced its decision to proceed with development. The deposit has an 11 Mt probable ore reserve within a mineral resource of 31.8 Mt at 0.9% Cu and 0.2 g/t Au. From a pre-production capital expenditure of $130 million the open pit mine is expected to process 2 Mtpa to produce up to 19 kt of copper-in-concentrate and 6,000 oz gold annually for an initial minimum mine life of 6.5 years.

Eloise (QLD): Breakaway Resources Limited reported a new resource named Eloise Deeps of 2.1 Mt at 2.9% Cu and 0.7 g/t Au. Mine improvements in 2007 included the development of a decline to the upper portion of the Eloise Deeps block and a new $13 million ventilation rise and associated infrastructure to allow mining to continue to at least 400 vertical metres below the current stoping levels.

Redbank (NT): Redbank Mines Limited reported a 20% increase in resource to a new project total of 5 Mt at 1.4% Cu. Redbank currently is vat-leaching high grade oxide stockpiles to produce 1 ktpa Cu. A definitive feasibility study into expanding to a 6 ktpa operation is underway.