Global copper ore resources structure and overseas investment by Chinese companies

SUZHOU, Dec 4 (SMM)—Production cost of global copper ore is expected to rise in the future amid new inflation cycle, lower raw ore qualities and improved concerns on environmental protection and mining safety, according to Bingo Yang, SMM consultant.

Speaking at the Shanghai Metals Market’s 2020 Nonferrous Metals Industry Chain Annual Conference held in Suzhou on December 4, Yang introduced global copper ore resources structure and overseas investment by Chinese companies to China delegates as well as international participants.

“The distribution of global copper resources is relatively concentrated. Copper ore reserves in Chile, Australia, Peru, Russia, Mexico and the US account for 62% of global copper reserves combined. Global copper concentrate production has remained at around 20 million mt with metal content, and is concentrated in Chile, Peru, China, Congo (DRC), US and Australia. Top six copper concentrate producers account for 65.4% of global production,” Yang said.

China’s copper mine resources are widely distributed in north-west and south-west regions, among which resources in Tibet, Yunnan, Jiangxi, Xinjiang and Inner Mongolia totalled over 60%. The country’s copper concentrate output has rebounded to 1.63 million mt (Cu content) since 2016, and the output in Jiangxi, Yunnan, Heilongjiang, Gansu, Xinjiang, and Inner Mongolia contributed 67.6% of total output.

As for cost evolution of copper concentrate, Yang said that China's production cost on copper concentrate is higher than the 90th fractile of all costs in the world, with the weighted average cost of copper mines at 27,000 yuan/mt, excluding by-product profits.

source: SMM

source: SMM

“Copper concentrate production cost includes manpower, electricity, tax and so on, and cost of global copper ore is expected to rise further due to inflation, degrading raw ore quality and concerns over environmental protection and mining safety.”

source: SMM

Yang also introduced overseas investments by Chinese companies. He said that China’s relatively scarce copper resources, encouraging policies issued by the government and enhanced international cooperation prompted Chinese companies to accelerate investments in overseas mining projects in recent years.

China's overseas mining investment is mainly in countries and regions with rich mineral resources, political stability, and sound legal systems, namely Asia, Europe and Americas. The number of Chinese equity copper mine projects overseas has exceeded 50, with reserves exceeding 50 million mt and output exceeding 1 million mt on an equity basis.

Also, Yang mentioned in her speech that limited number of mines in operation and slow project construction are the major issues facing overseas equity copper mine investment.