Market turns for custom copper concentrates

The reason for the market cycle, says Metals & Minerals, is that custom copper smelters’ production, where possible, responds quickly to developments in refined copper consumption and refined metal prices.

Custom concentrate output reacts to these developments, but only after a lag, and often increasing supplies of custom concentrates have met refined metal consumption (which is driven by industrial production) on its way down. Higher charges

The result is surpluses of concentrates at the worst possible time; however, smelting has usually been profitable as the custom treatment and refining charges moved sharply upwards and against the producer of concentrates. In turn, custom smelters and refiners are encouraged to continue operating at high levels of capacity utilization even when world consumption and prices do not justify it.

As a result, refined copper inventories started to accumulate sharply (in the mid-70s and again in the early-80s) and thus began, writes the research firm, the deep recessions seen in the market for refined metal.

Recently, says Metals & Minerals, the concentrate market has been recording significant but variable monthly deficits. With supplies of concentrates set to rise sharply when Portugal’s Neves- Corvo and Ok Tedi in Papua New Guinea, among others, begin volume production, custom treatment and refining charges will increase (probably marginally at first) and those custom smelters now producing below desired capacity will raise their utilization.

Later, between now and 1991, there will be a rise in world mine production capacity of more than 13%; the production of electrowon cathode will increasingly meet growing world consumption at low cost, and market conditions for copper concentrate producers may be increasingly unpleasant. But it won’t last long, Metals & Minerals writes.

Production from 78 primary, non-placer gold mines in Canada is thought to have exceeded 3.9 million oz in 1988, an increase of about 26% over 1987’s 3.1 million oz, Metals Economics Group of Halifax, N.S., reports.

About 41% of the 800,000-oz increase is attributed to initial production at 22 mines which came on stream last year. Another 31% can be attributed to a full year of production from 11 mines which came on stream in 1988, while 28% of the increase came from expansions at older operations.

The top five gold producers in the country in 1988, counting only output from their Canadian properties, were Placer Dome, Corona Corp., Hemlo Gold Mines, Lac Minerals and Teck Corp., the company reports.

Recently publishing a comparison chart of gold companies world- wide was the Mining Journal of London. Among the eight lowest cost producers are two Canadian firms, Hemlo Gold (in second place) and Corona. Topping the list is Amax Gold of Colorado. No Canadian companies figure among the eight highest cost producers.

The mining industries in Canada and the United States will spend an estimated $1.1 billion(US) in 1990 on more than 15 billion lb of chemicals, projects the consulting firm of Hochberg and Co. of New Jersey.

For gold-silver ore processing chemicals alone, projected expenditures in 1990 will total $60 million.

The most important chemicals consumed for the mining of ores include pH modifiers, frothers, depressants, collectors, flocculants, leaching agents, freeze-control agents, filtering aids, liquid ion exchange reagents, acids, alkalies and dewatering aids.

The recent surge in gold mining activity around the globe has resulted in at least one important chemical going in short supply, the leaching agent sodium cyanide.

The company points out that some of the newer technologies such as hydrometallurgy, liquid ion exchange and solvent extraction are requiring new chemical reagents that can improve yields and processing costs, particularly for lower grade ores.

New chemical opportunities are expected because of improved processing technologies to reduce costs and because of the impact of more stringent regulations to control the pollution of air, water and disposal of toxic solid wastes. In addition, there is a drive to reduce the use of toxic substances harmful to mine workers.

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