Global copper smelting needs studied

New global copper smelting capacity, beyond those projects already announced, will be needed by 1993, says a research company from Pennsylvania. The closure of the Bougainville mine (180,000 tonnes per year) in Papua New Guinea in May, 1989, created a shortage of copper concentrates vis-a-vis smelter demand, Resource Strategies Inc. of Exton, Penn., reports. This near-term supply squeeze, it says, has tended to mask the developing problem of inadequate smelter capacity a few years down the road.

In its “base case” scenario, the company assumes that Mitsubishi’s Texas City, Tex., smelter (180,000 tonnes per year) is on-stream by mid-1993, Caraiba’s 50,000- tonne-per-year expansion of the Camacari smelter in Brazil is completed by the start of 1993, and that the Bougainville mine (closed because of the activity of rebel landowners in the area) reopens at the start of 1993.

This scenario, says the company, would yield a small smelter shortfall in 1993. By 1995, the shortfall would approach 250,000 tonnes. (If the first two mentioned projects do not proceed as scheduled, the shortfalls would be much greater.)

The company points out that most of the major new mine projects of recent years, including the giant Escondida in Chile that will start up at the end of this year, have not been integrated with their own smelters.

The reason, Resource Strategies says, has been that treatment charges available in the custom concentrate market have been considerably lower than the full production costs (capital plus operating) of a new smelter.

With the capital cost of a new smelter about $2,000 per tonne of blister capacity, the capital repayment cost alone would exceed the treatment charges currently available from custom smelters.

The company’s report examines seven potential projects to determine their economic viability when measured against forecast levels of custom treatment charges. Production cost estimates are developed for each project. The size of the sulphuric acid credit is determined by the smelter’s proximity to market. Proximity to concentrate supplies is another factor discussed in the study.