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World News See other World News Articles Title: Copper mine flashes warning of ‘huge crisis’ for world supply Copper mine flashes warning of ‘huge crisis’ for world supply Bloomberg News | May 3, 2023 | 8:01 am Intelligence Top Companies Asia Canada Copper Copper mine flashes warning of 'huge crisis' for world supply Oyu Tolgoi open pit has been producing since 2012. (Image courtesy of Turquoise Hill.) Accompanied by tinny taped music and overall-clad workers, Rio Tinto Group executives and Mongolian officials gathered a kilometer beneath the freezing Gobi Desert earlier this year to open one of the world’s richest underground copper mines. It was a celebration four decades in the making. Oyu Tolgoi, in southern Mongolia just north of the Chinese border, is key to Rio’s efforts to move beyond its dependence on iron ore and expand in copper, the metal that underpins the clean energy transition. It’s also a vast deposit whose corporate, political and technical vicissitudes offer a glimpse of the red metal’s troubled future. As demand for copper surges, supply is increasingly likely to come from mines like this one on the arid steppe: expensive, technically complex, outside traditional copper jurisdictions and operating under the eye of governments jealously guarding their natural resources. “There’s a huge crisis,” says Doug Kirwin, one of the earliest geologists to work at the deposit that became Oyu Tolgoi, or Turquoise Hill, named after the area’s rocks, stained by oxidized copper. “There’s no way we can supply the amount of copper in the next 10 years to drive the energy transition and carbon zero. It’s not going to happen,” adds Kirwin, now an independent consulting geologist. “There’s just not enough copper deposits being found or developed.” Analysts at Wood Mackenzie estimate a greener world will be short about six million tons of copper by next decade, meaning 12 new Oyu Tolgois need to come online within that period. But they aren’t — there are simply not enough new mines, much less enough large ones. The result is a gap: BloombergNEF estimates appetite for refined copper will grow by 53% by 2040, but mine supply will climb only 16%. The world’s largest miners aren’t standing idly by. After more than a decade of repenting for the excess that followed the China-led boom in demand in the 2000s, deals are back, with green metals in buyers’ sights. The looming green metal shortfall has encouraged Glencore Plc’s move on Teck Resources Ltd, long a coveted copper target, and top gold miner Newmont Corp’s record bid for Australian peer Newcrest Mining Ltd, a deal that will add bullion but also copper to its production profile. BHP Group Ltd has just completed the acquisition of copper producer Oz Minerals, its largest deal in over a decade. None of these, even if successful, will alter the overall global balance. Building mines, as opposed to buying them, is still too painful a headache. Prices are not shiny enough to cover rising costs, and risks abound. Take Oyu Tolgoi, where construction has involved adding a 200km labyrinth of concrete tunnels to the open pit, but also roads, an airport, power transmission and water infrastructure. Never mind Mongolia’s largest canteen, for 20,000 or so workers — and, Mongolia hopes, an eventual power plant. Even more worrying, though exploration has ticked higher of late, is that spending remains far short of what is required. And what does emerge tends to be smaller and lower grade, meaning the percentage of metal in the ore is more slight, so more effort (and waste) is required to hit the same production levels. The last heavyweight discovery, aarguably, was roughly a decade ago — the combined Kamoa-Kakula operation in the Democratic Republic of Congo, owned by entrepreneur Robert Friedland’s Ivanhoe Mines. “Mines are getting older, mines are getting deeper, and mines are getting lower grade,” said David Radclyffe, managing director at Global Mining Research. “Then you’ve had the added complications of the need to conform with the shift in terms of environmental requirements. And political risk on top of that.” Poster Comment: I wonder how this compares to the open pit copper mine at Silver City, New Mexico? Post Comment Private Reply Ignore Thread
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