Modern Mining February 2024

CRITICAL METALS

mines. Copper production in Chile, the world’s larg est copper producer, accounting for 27% of global output, has seen a significant decline in recent years, which was mainly attributed to lower ore grades, water restrictions and local protests.” Ore deposits gradually deplete over time. In the past 15 years, average copper grades have decreased from 0.70% to 0.58% – a 17% decline. Back in the early 1900s, global copper grades ranged between 1.5–4%, something that is now only seen in a handful of mines around the world, primar ily in the Democratic Republic of Congo (DRC). At the same time, global copper discoveries have been on the decline, with a total of 228 cop per deposits discovered between 1990 and 2021, but only three new discoveries in the past five years. Between 2017 and 2021, only two major copper

Demand in electric vehicles was accelerated by policy frameworks and social pressure incentivising EVs.

Metals and minerals are integral to the decarbonisation agenda.

mines, namely the Kamoa Kakula mine in Congo and the Quellaveco mine in Peru, commenced operations. “A lack of high-quality, large-scale projects in the pipeline indicates that the rate of production growth may decelerate after 2024. Then on top of that, there are political and sovereign risks that may disrupt existing levels of supply. Moreover, there is political turmoil in Peru (protesting and blockades) which is the world’s second-largest copper producer (contributing nearly 10% to global production). This disrupted approximately 20% of its copper supply in early 2023,” says Gordon. Meanwhile the world is becoming increasingly reliant on copper production from DRC and Zambia. Africa’s contribution to global copper supply is expected to be 18% in 2027, up from 16% in 2023. “Of the list of committed mine projects (8) with capacity over 100k t/y in CRU’s project pipeline, South America (Chile) only contributes one. The African copper belt will have two large expansion projects in the next couple of years and Russia con tributes the only greenfield mine project to reach production. We are becoming increasingly reliant on copper supply from countries that historically contain more sovereign risk,” says Gordon. Nickel and Cobalt: CRU has identified nickel as criti cal, but mitigation efforts should enable the market to return towards core status as has been achieved over recent years in the cobalt market moving cobalt through critical and back towards core status Diversification in the chemistries used in batteries is reducing demand for nickel and cobalt chemicals, with the focus being on reprocessing materials from

Market predictability is clearly the most challenging area for critical commodities.

16  MODERN MINING  February 2024