Copper: the economics?

The economic cost of copper production is built up from first principles in this model, from mine, to concentrator, to smelter to 99.99% pure copper cathodes. Our base case is $7.5/kg copper cathode, with 4 tons/ton CO2 intensity, after starting from an 0.57% ore grade. Numbers vary sharply and can be stress-tested in the data-file.


70-80% of all primary copper is produced by the smelting route and mainly starting with sulphide ores. First, ore is mined, moved, crushed and concentrated to around 20-40% purity. The ‘CopperOreMine’ tab of the model captures the costs, energy use and CO2.

Further downstream, the ores may be roasted to change their crystal structure before smelting, smelted in an environment of enriched oxygen to reject sulfur as sellable sulphuric acid, yielding matte with c50-70% purity.

Even further downstream, matte is upgraded to blister with c99% purity, which is melted and cast into anodes for electrochemical refining, yielding copper cathodes with 99.99% purity. Copper cathode is one of the most traded metals on Earth, underpinning the LME copper contract, as pure copper is purchased and processed into semis, wires and cables.

The economic cost of copper production is built up from first principles in this model, from mine, to concentrator, to smelter to 99.99% pure copper cathodes. Our base case is $7.5/kg copper cathode, with 4 tons/ton CO2 intensity. Capex intensity of copper is plotted below in $/Tpa.

But the costs of copper production depend heavily on ore grade and mining/refining technology. We estimate that a 0.1% reduction in future copper ore grading increases marginal cost by around 10% and CO2 intensity by around 10%, which matters as copper demand is set to treble in the energy transition.

Moreover, each $100/ton of CO2 prices would increase marginal cost by another 5%. It is not unimaginable that copper prices could reach $15,000/ton in an aggressive energy transition scenario, if you stress-test the model.

There is no silver bullet to decarbonize primary copper production, because of the large number of processing steps described above and in the data-file. Hence the best option to decarbonize copper production are to increase the reliance on secondary production (i.e., recycling, e.g., Aurubis).

The best option to decarbonize primary copper, based on stress testing our models, is to use clean electricity for processes such as crushing and flotation, which can save over 1 ton/ton of CO2. Using these processes flexibly can potentially even help to integrate renewables. Finally, we think that electrochemical production, e.g., via solvent extraction then electrowinning (the favored route for oxide ores that cannot be floated), can reduce total CO2 intensity by a further 1 tons/ton when using clean electricity.

Bioleaching: case studies and examples?

Bioleaching case studies

Bioleaching uses bacteria to metabolize insoluble sulfides and iron complexes. It produces 20% of the world’s copper, and other metals; with 50% lower capex, at least 50% less CO2 and up to 80-90% recoveries; but it is currently limited to specific mineralogies. An exciting prospect for the 2020s is that new technologies may unlock more minerals for bio-leaching. This data-file is an overview of 20 bioleaching case studies.


Bioleaching produces 20% of the world’s copper, and is also used in other metals, as naturally occurring bacteria – such as Acidobacillus ferrooxidans/thiooxidans – metabolize iron, and oxidize insoluble sulfides, releasing valuable metal ions into solution. From here, they can be concentrated via solvent extraction and refined via electrowinning.

The advantages of bioleaching are low costs and low CO2, as per broader heap leaching operations. The entire process likely costs $4,000-5,000/ton, which is approximately half the level of integrated mining-smelting operation. Avoiding smelting also avoids around 2 tons/ton of CO2 emissions, which is also around a 50% reduction (model here).

The technology is mature. This data-file tabulates over 20 examples. The first full-scale commercial success was 1982, with an acceleration in the 1990s. The median average size is small, at 20kTpa. But there are also world-scale operations using bio-leaching, such as BHP’s Escondida and Spence assets in Chile, both close to 200kTpa.

However mineralogy matters. Recovery rates average above c80%, when copper ores are chalcocites (Cu2S), covellites (CuS) and other easily leached minerals. Historically, these higher recovery rates have also been achieved on low-grade copper resources, averaging 0.5% copper, and sometimes as low as 0.3%.

Conversely, chalcopyrites (CuFeS2) make up over 70% of the world’s remaining copper resources and they cannot easily be leached, as a passivating layer forms at their surface. At best 20-25% recovery rates are reported when leaching chalcopyrite-heavy ores.

There is reason for excitement in the 2020s, as several companies are developing bio-leaching technologies that can recover copper from chalcopyrites. We have previously written about Jetti Resources. Rio Tinto has also developed a new process called Nuton. At best, CO2 may be 90% less than smelting.

20 bioleaching case studies are laid out in the data-file, as a useful overview, while we also see growing importance for metals and especially copper in our energy transition research.

Mine trucks: transport economics?

Mine Truck Economics

There are around 50,000 giant mining trucks in operation globally. The largest examples are around 16m long, 10m wide, 8m high, can carry around 350-450 tons and reach top speeds of 40mph.

This data-file captures the economics of a mine haul truck. A 10% IRR requires a charge of $10/ton of material, if it is transported 100-miles from the mine to processing facility. Assumptions can be stress-tested overleaf.

Fuel consumption is large, around 40bpd, or 0.3mpg, comprising around 30% of total mine truck costs at c$1.5-2/gal diesel prices. Some lower carbon fuels are c5x more expensive, and would thus inflate mined commodity costs.

High utilization rates are also crucial to economics, to defray fixed costs, which are c50% of total costs, as our numbers assume each truck will cover an average of 500 miles per day for c20-25 years.

Copper companies: a screen of leading producers?

Screen of copper producers

This data-file is a screen of the world’s largest copper companies, across c15 miners and producers that produce half of the global market, averaging 0.85MTpa each, deriving 30% of their EBITDA from copper, at 40% EBITDA margins, with a reserve life of 29-years. Summary details are given for each copper company in the data-file.


We have tabulated 15 copper companies’ size, type, headcount, patent count, production, reserves, RP ratio, relative exposure, key assets and other notes in this data-file.

These 15 leading companies produce half of the world’s copper, and generated $40bn of copper EBITDA in 2023, at an average margin of 38%. But do the data in our screen point to tightening markets?

The average company produces around 0.8MTpa of copper, has a 30 year reserve life, and derives 30% of its EBITDA from copper.

Global copper demand rises from 30MTpa in 2023 to 42MTpa by 2030, due to electrificationsolarEVs and the rise of AI

However RP ratios for the ten largest companies in the peer group have decreased from 28 years in 2013-14 to 27.5 years in 2023, even as global average copper prices rose 20% to $8.5/kg (below).

The reserve to production (RP) ratio for ten of the largest western copper companies has declined slightly even though copper prices have increased by 20%.

Average production costs across the group also increased by c20%, from $3.5/kg in 2013 to $4.1/kg in 2023. Labor productivity was more lumpy. Further cost details are available in our economic model of copper production.

15 companies are covered overall in our screen of copper producers, including diversified miners such as Glencore, BHP, Rio Tinto and Anglo American; and more concentrated specialists such as Codelco, Freeport McMoRan, Southern Copper, Antofagasta. Generally, the data do seem to imply that a copper capex cycle is gearing up.

Copper: global demand forecasts?

Global copper demand in the energy transition

This data-file estimates global copper demand as part of the energy transition, rising from 28MTpa in 2022 to 70MTpa in our base case scenario. The largest contributor is the electrification of transport. You can stress test half-a-dozen key input variables in the model.


This data-file estimates the growth in global copper demand in the energy transition: specifically, the rise of renewables, electric vehicles and other new energies technologies.

Global copper demand stood at 28MTpa in 2022, and will most likely increase to 70MTpa by 2050, in our base case scenario.

The global copper market today comprises 32% appliances, 28% buildings, 14% power T&D, 13% vehicles, 10% industrial equipment and 4% renewables, according to data from the Copper Council.

Copper demand intensity factors. Copper use in wind, copper use in solar, copper use in electric vehicles and copper use in power grids — transmission and distribution — are substantiated with industry data-points in the file.

The greatest source of growth is for electric vehicles, and automobile demand for copper can conceivably rise from 2MTpa to 20MTpa, as the world ramps up from producing 10M EVs and hybrids per year to 200M per year by 2050, or at least, this is the ascent projected in our oil demand forecasts.

A prior iteration of the model had copper demand ramping to 75MTpa, but we recently revised this lower, as we expected more thrifting and substitution towards aluminium as a lower-cost and lighter carrier for power transmission.

The data-file allows you to stress test different scenarios, varying the ultimate share of electric vehicles in the vehicle fleet, the rise of long-distance power transmission, global GDP growth, reductions in copper intensity, and the ultimate share of renewables in the grid. This is part of our broader research into metals and materials demand in the energy transition. Our other copper research is linked here.

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