Major copper producers replace 210% of production

By: Robert Anders | 17 July 2017


The recently published Strategies for Copper Reserves Replacement, or CRRS, series of reports examines growth strategies in the copper mining industry by compiling information on all aspects of the mined supply of copper. The study's different sections provide parameters for measuring the relative costs of various growth strategies for individual copper-producing companies and the industry as a whole.

The "Analysis of major copper-producer metrics" section compares the statistics of the 20 major copper producers profiled in the study. This analysis also includes a table summarizing the metrics of the 17 companies with the most complete and comparable information.


major copper producers total costs of reserves replacement

At the end of 2016, this group of 17 companies held a total of 398.2 million tonnes of copper in reserves, sufficient for 31 years of production at current rates after allowing 10% for recovery losses. They accomplished this while increasing their aggregate production by 31%, from 8.9 Mt in 2007 to 11.7 Mt in 2016. These 17 companies replaced 210% of their total production from 2007 through 2016, adding 227.7 Mt of reserves while producing 98.5 Mt of copper.

More than 87%, or $74.99 billion, of the group's total reserves-replacement expenditures went toward acquisitions, accounting for 31% of the group's reserves growth, and 13%, or $11.09 billion, went to exploration, accounting for 69% of reserves growth.

Grupo Mexico-controlled Southern Copper Corp. had the lowest cost of reserves replacement in the group at US$0.01/lb. Replacing 10.8 Mt of reserves, or one and one-half times its total production, it had no acquisitions — acquired copper is typically more expensive — and spent only US$230 million on copper exploration over the past 10 years. By contrast, Rio Tinto, which has always maintained a strong and diverse exploration program, spent US$1.72 billion on copper exploration during the period to add 10.8 Mt of exploration-derived reserves at a cost of more than US$0.07/lb.


Switzerland-based Glencore Plc had the largest reserves growth of all the companies in the study, adding 41.9 Mt of copper to reserves — five times its production over the period — through a skillful mixture of acquisitions (45%), notably through its 2012 takeover of Xstrata, and exploration (55%). It accomplished this while rising to become the world's third-largest copper producer, behind state-owned Codelco and Freeport-McMoRan Inc., and while holding back almost 400,000 tonnes per year of production from its African operations, as it aims to lower costs as part of a strategy to stem what it sees as unnecessary oversupply by the major producers.

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The Strategies for Copper Reserves Replacement studies is a series of reports dedicated to examining the costs of finding and acquiring copper from 1990-2016. The report series cover:

  • Major Copper Discoveries: All significant copper discoveries during a 15-year period are analyzed in terms of discovering companies, project location and discovery exploration costs.
  • Top 20 Copper Producers Profile: Individual Excel spreadsheets provide detailed data on each major producer's production, reserves, costs, exploration budgets, acquisitions, divestitures and copper discoveries during a 10-year period.
  • Analysis of Copper-Producer Metrics: Compares the statistics on production, reserves, costs, exploration budgets, acquisitions, divestitures and copper discoveries for the top producers during a 10-year period.
  • Copper Production Pipeline:A global view on forecast copper production over the next five years, projects in development and distribution of reserves & resources.

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