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Copper Industry

Copper Industry

BIBLIOGRAPHY

The copper industrys growth and prosperity are based on the metals inherent properties: an attractive appearance, high conductivity, good corrosion resistance, ability to alloy with other metals, and ease of working. While there are substitutes in specific uses, copper has entrenched and expanding markets in the electrical, electronic, and communications industries. Electrical and electronic products, including power cables, account for over one third of total usage, and construction, including wiring and water tubing, for a similar share. Transport industries use roughly one eighth of the total, industrial machinery and equipment nearly one tenth, and a wide range of consumer and other products the remainder. Global demand, which moves in step with capital expenditure, especially on construction and infrastructure, and with spending on automobiles and consumer durables, has increased from 3.7 million tonnes in 1960 to 6.8 million tonnes in 1970, 9 million tonnes in 1980, 10.9 million tonnes in 1990, 15.1 million tonnes in 2000, and 16.5 million tonnes in 2005. The annual average rate of growth is 3.1 percent, but with marked annual and geographical variations. The geographical center of demand has altered, with the most rapid increases in China, India, and the countries of the Asia-Pacific Rim. In 1980 the main markets were the countries of the European Union of 15 (30 percent), the United States (21 percent), the USSR (12 percent), and Japan (13 percent). By 2005 China had gained first place with 22 percent and the Asia-Pacific region had 14 percent. These increased shares were only partially offset by the collapse of demand in the former Soviet Union and its European satellites. In recent years demand has flattened out, or even fallen, in the United States (14 percent of the 2005 total), Japan (7 percent), and many of the European Union of 15 (20 percent) as their economic activity has become increasingly dependent on service industries and imported manufactures. Global turnover amounted to $21 billion in 2002 and $60 billion in 2005, with increased prices explaining most of the rise. World exports of refined copper metal accounted for 38 percent of production, worth almost $23 billion, in 2005.

Copper is priced on terminal markets, mainly the London Metal Exchange, and prices fluctuate with changes in the balance between supply and demand and with general economic and financial conditions. Whereas demand is cyclical, supply tends to be relatively inelastic as mines need to spread heavy fixed costs over as high an output as possible. The industry is a modest employer of labor, but is capital intensive at both the mining and refining stages. Volatile prices can be hedged in forward markets, but nonetheless create problems for producers and consumers alike. For example, the daily cash price fell from $3065/tonne on January 20, 1995, to a low of $1319/tonne on November 11, 2001, and rose to a high of $4650/tonne on December 28, 2005. The annual averages were $2934/tonne in 1995, $1560/tonne in 2002, and $3684/tonne in 2005. High prices both encourage substitution by other materials, and lead governments and labor to press for increased shares of profits. Weak prices inhibit exploration and new investment and may force the closure of higher cost mines.

The relatively strong growth of demand since the late 1980s has been facilitated by changes in the structure and nature of supply. Global mine production of copper was about 15 million tonnes in 2005, with the balance of demand for refined copper metal met from recycled materials. In many instances ores contain other payable products as well as copper, which can contribute considerably to mine profitability, and can influence production patterns. Because individual ore deposits are finite, continued spending on exploration and mine development is required merely to maintain output, let alone satisfy rising demand. Improved exploration techniques have partly offset the tendency for the average grade of copper ore to fall with the depletion of the richer and most accessible ore deposits. Also, technological improvements and rising mine size have tended to neutralize any impact of falling average grades on production costs. During the 1990s output became increasingly concentrated in large open-pit mines, where economies of scale more than offset the relatively low grades of contained metal in the ore. In 2004 the three largest mines produced about 2.5 million tonnes, or 15 percent of output. The annual copper output of the median mine grew from 75,000 tonnes in 1980 to 110,000 tonnes in 1990 and almost 200,000 tonnes in 2000. Larger mine sizes and falling average grades have greatly increased the local environmental impact of mining, as greatly increased volumes of waste and overburden have to be moved per tonne of recovered metal. Energy needs have also risen sharply. Most mines are located in relatively unpopulated areas, but social and community tensions can arise when they are developed near population centers, particularly where indigenous peoples are involved.

With the exhaustion of many small high-grade mines in Europe and parts of North America since the late 1980s, the geographical focus of output has shifted. That shift has been accompanied by changes in patterns of ownership. Whereas the shares of leading companies in total output have not altered significantly, the identity of those leading companies has changed markedly. During the 1950s, 1960s and early 1970s, many mines were wholly or partially nationalized, largely but not entirely in developing countries in accordance with the then-prevailing ethos of national ownership and control of mineral resources. In countries such as Chile, Zambia, and Zaire, foreign-owned mining companies had dominated, or even distorted, the local economy and exerted considerable political power, often fueling strong local resentment. Some nationalized U.S. companies, like Anaconda in Chile, blocked foreign aid and further investment in their former host countries in the 1970s. The greater part of U.S. mine output was acquired by oil companies during the 1970s. (For example, Anaconda Coppers Chilean assets were nationalized in the 1960s and early 1970s, and its remaining assets were acquired by Atlantic Richfield in the late 1970s.) Subsequent decades have witnessed the complete withdrawal of the oil companies from copper production, and the privatization of copper projects in many countries. As of 2007 only Chile retains a significant state holding, through Codelco, but the company now coexists with privately owned companies and accounts for only 35 percent of a greatly expanded Chilean output, compared with about 82 percent in the early 1980s. Elsewhere, state-owned producers generally failed to invest sufficiently to sustain their output and remain competitive. U.S. mine output collapsed from 1973s 1.6 million tonnes to 1 million tonnes in 1983, and it would have fallen further but for the oil companies investment and the application of new technology. Until the late 1970s most copper ore was crushed, concentrated by a variety of means, and then smelted and refined. Not all ores are amenable to processing by such means and oxide ores were often left untreated. Acid leaching, followed by solvent extraction and electro-winning (SX-EW) enabled the treatment of such ores and waste dumps, often at low costs, and these hydrometallurgical processes were suitable for many deposits in the Southwestern United States. In consequence, U.S. mine output expanded to 1.8 million tonnes in 1993 and 1.9 million tonnes in 1996, only to contract to 1.1 million tonnes by 2003, after prices had collapsed cyclically in the late 1990s.

Many South American copper ores are amenable to SX-EW processing and by 2004 the technique accounted for 18 percent of global mine output. One advantage is that the process produces saleable copper metal rather than intermediate products requiring further processing. Russian production fell with the collapse of the Soviet Union, and output fell during the 1980s and 1990s in Europe, Canada, Central Africa, and the Philippines. The number of producing countries has dwindled along with the number of mines. As of 2007 Chile accounts for 35 percent of global mine output, followed by the United States (8 percent), Indonesia (7 percent), Peru (7 percent), Australia (6 percent), and Russia (5.5 percent). The leading five copper mining companies supply 38 percent of global output, and the top ten 58 percentsimilar shares to those of the mid 1970s. The five leading companies are Codelco (12.7 percent of 2004s output), BHPBilliton (7.3 percent), Phelps Dodge (7.1 percent), Grupo Mexico (6.1 percent), and Rio Tinto (5.1 percent).

There is large global trade in ores and concentrates (28 percent of total mine output, and 34 percent of the output of concentrates) as not all copper is smelted and refined at, or near, the mine site. Some smelters and refineries continued to produce from imported raw materials when local mines were depleted, and some countries, like Japan, Korea, and China, deliberately fostered metal production for strategic or developmental reasons. The main countries producing copper metal are Chile (17 percent), China (15 percent), European Union of 15 (11 percent), Japan (8 percent), and the United States (7 percent). The ownership of copper refineries is rather less concentrated than that of mines, with the ten leading companies having 50 percent of output, rather less than in the mid-1970s.

SEE ALSO Allende, Salvador; Dependency; Mining Industry

BIBLIOGRAPHY

Crowson, Phillip. 2003. Mine Size and the Structure of Costs. Resources Policy 29 (1-2): 1536.

International Copper Study Group. Copper Bulletin. Lisbon, Portugal: ICSG. (Monthly.)

Prain, Ronald, Sir. 1975. Copper: The Anatomy of an Industry. London: Mining Journal Books.

Radetzki, Marian. 1985. State Mineral Enterprises: An Investigation into Their Impact on International Mineral Markets. Washington, DC: Resources for the Future.

U.S. Geological Survey. Copper: Statistical Compendium. Washington, DC: U.S. Geological Survey. http://minerals.usgs.gov/minerals/pubs/commodity/copper/stat.

U.S. Geological Survey. Minerals Yearbook. Washington, DC: U.S. Geological Survey. http://minerals.usgs.gov/minerals/pubs/commodity/copper. (Annual; see chapters on copper.)

World Bureau of Metal Statistics. World Metal Statistics. Ware, U.K.: WBMS. (Monthly.)

Phillip Crowson

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Copper Industry

COPPER INDUSTRY

COPPER INDUSTRY. Archaeological evidence found in pits on the Upper Peninsula of Michigan and on Isle Royal in Lake Superior reveals that copper mining and the making and use of copper implements and weapons in North America were carried on during a prehistoric

period extending from about 5,000 to 1,000 b.c. Vast copper mining pits remained that indicated extensive production. Copper production revived in the United States with the discovery of a vein of copper ore at Simsbury, Connecticut, in 1705. In 1709 copper production began from this ore, followed later by the discovery and development of other deposits in the colonies. English colonial law forbade smelting in the colonies, and so most of the ore was shipped to England. Small amounts of ore were smelted in the colonies, however, in spite of the prohibition.

It was not until exploitation of the rich ore deposits of the Upper Peninsula of Michigan in the early 1850s that copper production in the United States exceeded a few hundred tons per year. In 1842 the Chippewa Indians ceded all claims to thirty thousand square miles of the Upper Peninsula. In 1843 the copper rush began as thousands came to the peninsula to try their luck in the mines. The Keweenaw Peninsula, in Lake Superior, rapidly filled with copper mining boom towns, and several important harbors opened. Copper was shipped on Lake Superior to the St. Mary's River Canal at Sault Ste. Marie until the Soo Locks opened in 1855. The opening of the locks, combined with the advent of the railroad, increased both productivity and immigration to the area. In 1849, miners discovered massive deposits of copper buried deep in the earth at the Cliff Mine area near Eagle Harbor, Michigan. Unlike surface copper, which prehistoric glaciers had scattered across the country side, the Cliff Mine area boasted rich veins of ore. Rapid developments in copper mining technology produced equipment capable of hoisting massive amounts of metal from deep mine shafts.

Production of Michigan copper increased from 728 tons in 1850 to more than 30,000 tons in 1880. In the early 1850s the U.S. copper industry was dominated by the Calumet and Hecla Mining Company in Michigan, which was producing one-half of the domestic output from ore that ran as high as 20 percent copper. All the Michigan copper, known as Lake Copper, was marketed by Calumet and Hecla through a pooling agreement known as the Lake Pool. The preeminence of Michigan in copper mining was considered unassailable, particularly by those who financed the Lake development.

Despite Michigan's apparent monopoly, competition from the western states mounted. The first discovery of copper in Montana was at Butte in 1866 in the Parrot mine, which was then being mined for silver. The area became famous for copper production in the early 1880s from the output of the Anaconda mine. Later, the Anaconda Copper Mining Company gained control of most of the mining properties in the Butte area. During this same period, exploitation of the southwestern oxidized silver-copper deposits also began. In Arizona the operations of two mines, the Bisbee and the Copper Queen, merged in 1885, forming the basis for the great copper mining operations in Arizona. In the 1970s, the Arizona mines accounted for about one-half of the domestic production of primary copper.

In the 1860s the emerging electrical industry created a new demand for metals from which to make conductors. Copper proved to work best as an electrical conductor. The potential size of the electrical industry as a market was apparently not recognized, and the competition for a supposedly limited market between the western producers and the Lake Pool headed by Calumet and Hecla became critical. Prices were slashed, and by 1886 copper sold for ten cents per pound, compared with the average selling price of twenty cents per pound during the previous ten years. The price war scarcely checked western production, and the increasing production of Butte copper surpassed the Lake Pool total Michigan output by 1888. By 1900 the Michigan mines had reached maturity, and mining there became too expensive an endeavor. This shifted the focus of the copper industry to the West.

Advances in technology had considerable impact on the U.S. copper industry. Introduction of the Bessemer steel converter for smelting copper in the late 1880s made it possible to treat many lower-grade ores. The beginning of open-pit mining in 1907 permitted profitable exploitation of the huge bodies of low-grade disseminated copper sulfide ores in the Southwest. The flotation process introduced into the copper concentrators between 1913 and 1916 drove the tenor of profitable ore even lower. Since the standard blast furnace-converter process was not suitable for smelting the fine-grain flotation concentrate, the blast furnace was replaced by the open-hearth steel-making furnace to smelt roasted concentrates. Later, after the Phelps Dodge Company demonstrated that unroasted concentrates could be smelted, many companies eliminated the roasting step.

World War I provided tremendous impetus to the domestic copper industry. The United States became the copper clearinghouse for the Western Hemisphere and for the world. With increasing worldwide demand, South American and African deposits were developed and brought into production, largely with U.S. capital. World War II brought the copper industry to all-time high production records. Refining output soared to 1.5 million tons annually, and the United States firmly established dominance in copper production. Even so, the nation's needs outstripped domestic production, and by 1970, imports accounted for about 17 percent of the domestic supply.

Following World War II, hydrometallurgy grew as a commercial method of extracting copper in the United States. Dissolution and precipitation—collectively referred to as leaching—were used extensively for treating copper-bearing mine waste and for processing oxide ores. The copper precipitates produced by this method, which accounted for less than 5 percent of the total domestic copper produced in 1945, accounted for about 12 percent in 1970.

The processing of copper ores supplies a host of by products important to the economy, including lead, zinc, gold, silver, molybdenum, palladium, and platinum. Production of copper from the porphyry deposits in the western United States provides the only domestic source of the metal rhenium. Another important by-product is sulfuric acid, made from the stack gases at copper smelters. In 1970 about 600,000 tons of this acid were produced from this source. The production of acid and other sulfurous products, whether marketable or not, increased dramatically in the late twentieth century as smelter operators strived to meet new and stringent air-pollution regulations, which severely restricted the amount of sulfur dioxide that could be discharged into the atmosphere. Pollution abatement at smelters is costly and will force the industry to adopt new smelting technologies.

In 1974 U.S. consumption of refined copper was 2.3 million tons—of which 1.6 million tons were produced domestically—and an additional 0.8 million tons of copper were consumed as scrap in production of alloys, chemicals, and other products. By 1991 the United States produced almost 18 percent of the world copper production of some 8.8 million metric tons. By the early 2000s the largest copper ore producing states were Arizona, Utah, and New Mexico.

Because copper is so malleable and has high electrical conductivity properties, the largest use of copper is in electrical applications, which consume about one-half of the supply. Copper is extremely ductile and can be drawn into wires with diameters as small as .025 mm. It is widely used in outdoor power cables and in household wiring, as well as in signaling devices, electromagnets, and communications equipment. Copper wires are commonly used in the manufacture of electric motors, power generators, motor-generator sets, electrical controls, and related apparatuses, which require the use of copper for best performance.

BIBLIOGRAPHY

Finn, Janet L. Tracing the Veins: Of Copper, Culture, and Community from Butte to Chuquicamata. Berkeley: University of California Press, 1998.

Hildebrand, George Herbert, and Garth L. Mangum. Capital and Labor in American Copper, 1845–1990: Linkages between Product and Labor Markets. Cambridge, Mass.: Harvard University Press, 1992.

Hyde, Charles K. Copper for America. Tucson: University of Arizona Press, 1998.

Lankton, Larry D. Beyond the Boundaries: Life and Landscape at the Lake Superior Copper Mines, 1840–1875. New York: Oxford University Press, 1997.

Thurner, Arthur W. Strangers and Sojourners: A History of Michigan's Keweenaw Peninsula. Detroit, Mich.: Wayne State University Press, 1994.

James T.Dunham/h. s.

See alsoAir Pollution ; Electricity and Electronics ; Electrification, Household ; Mining Towns .

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