The latest research by S&P Global Market Intelligence shows that despite the significant increase in exploration investment, the discovery rate of copper mines is declining.
Similar to a report released in May, the S&P study found that global copper exploration costs totaled $26.6 billion over the past 10 years, compared with a record high of $4.7 billion in 2012.
In the past 18 years, the global copper exploration investment was only 12.4 billion US dollars. In other words, the investment in copper exploration in the past 10 years is twice that of the latter.
Despite the increase in exploration investment, only 29 discoveries have been made in the past 10 years, and 140 million tons of copper resources have been obtained. And 2/3 of the copper resources come from four deposits: Pampa Escondida, Kamoa and Kakula, and Los Helados. .
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From 1990 to 2008, 191 discoveries were made, with a copper resource of 862.8 million tons.
The S&P here refers to a deposit with a resource/reserve of more than 500,000 tons.
The survey in 2016 fell to the level before the 2006 mining boom, but began to pick up after 2016.
What needs to be alarmed is that there have been no new discoveries since 2014.
Standard & Poor’s senior analyst Kevin Murphy said that although the budget has increased, so far no new large copper mines have been discovered. In the next 10 years, the newly discovered resources of large copper mines can only increase to 245 million tons. However, the entire copper production chain has remained stable, and new capacity can sustain production in 2017 at least until 2020.
Standard & Poor’s believes that the concentration of mining companies in brownfield exploration is the reason for the decline in discovery rates.
The 1990s was the period of concentrated discovery of copper mines. Of the 220 major copper discoveries discovered in the past 28 years, 106 were discovered during this period, and their resources accounted for half of the discovered copper mines.
The copper mines discovered in Chile and Peru in Latin America since 1990 accounted for half of the world’s copper mines found in the same period. From 1990 to 2017, Chile’s copper mines were found to account for 35.1% of the world, followed by Peru (11%), the United States (8.7%) and the Democratic Republic of Congo (6%). During the same period, Australian copper mines only accounted for 2.6% of the world.
Standard & Poor’s warned that the period from discovery to production of copper mines is about 20 years. In other words, the new discovery of copper mines in the past 10 years may appear in the next 15 to 20 years. Unless the discovery rate can be improved in the near future, in the long run, the world will lack quality projects that can be put into development.
According to the S&P May report, the world’s top 15 producers saw a decline in production in March.
The International Copper Research Group (ICSG) predicts that global copper production will increase by 3% in 2018, and will remain flat in 2019. It is estimated that there will be a surplus of 40,000 tons of copper this year and a shortage of 330,000 tons next year.
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