Base Metals

The US Geological Survey has released its latest update on the potential for undiscovered copper deposits in Northeast Asia. The government agency estimates that the area holds about 260 million metric tons of copper associated with undiscovered porphyry deposits.

The US Geological Survey (USGS) has released its latest update on the potential for undiscovered copper deposits in Northeast Asia. The government agency estimates that the area holds about 260 million metric tons (MT) of copper associated with undiscovered porphyry deposits. 

That’s about 30 times the amount of copper identified in the two known copper deposits in Northeast Asia: the 7-million-MT Peschanka deposit in the interior of Northeastern Russia and the Lora deposit, with 1 million MT of identified copper, also in Russia.

Mainly focusing on Far East Russia and a small part of Northeasternmost China, the USGS report looks at five mineral resource assessment regions known to be conducive to hosting porphyry-type deposits. The largest region assessed was found to contain 53 significant porphyry copper prospects in addition to no less than 50 other smaller copper prospects.

That assessment is part of a broader cooperative international effort to “assess the world’s undiscovered mineral resources” called the Global Mineral Resource Assessment Project (GMRAP). It’s a project that has been going on for quite some time, involving partnerships with geological organizations in China, Canada, Chile, Turkey and Russia, to name a few.

As per this USGS article from 2002, the purpose of the project is to provide a global context to help inform planning and decision making in terms of sustainable resource development.

“Although no global shortages of nonfuel mineral resources are expected in the near future, the growing demand for and utilization of mineral resources require continued exploration and development of as-yet undiscovered mineral deposits,” the article reads. “The results of global mineral resource assessments will provide a regional and global context for viewing the nation’s mineral-resource base, help plan new mineral exploration and sustainable resource development, and aid regional resource, land-use, and environmental planning.”

The project started out looking at copper, potash and platinum-group element (PGM) deposits, with plans to consider lead, zinc, nickel, gold and phosphate as well. Copper was chosen for the project due to its global economic importance, according to the publication. That’s no surprise, as copper is widely used in residential and industrial infrastructure, as well as in electronics.

The USGS also announced in March that Central Asia could hold five times the amount of copper in currently known deposits — such as Rio Tinto’s (NYSE:RIO,ASX:RIO,LSE:RIO) Oyu Tolgoi. Last year, the government agency put out its estimate for the world’s undiscovered copper resources. That number came in at 3.5 billion MT. South America was pegged as the dominant region for copper, although parts of Asia, including China, were also picked as having significant potential for undiscovered copper resources.

The need for copper supply

The copper price has dropped about 36 cents, or 12 percent since the start of May, closing at around $2.57 per pound on Monday.

However, some market watchers are still holding to predictions that copper will swing into a deficit within the next two to three years, with the lower price squeezing producers even as they move to cut production costs. For example, PricewaterhouseCoopers recently reiterated a point that many have been making with regards to copper supply, stating that there’s “a growing concern over stability of supply,” and that the forecasted surplus for 2015 is small enough that it could “easily turn into deficit should planned world copper production not materialise due to factors such as unexpected events caused by severe weather, labour unrest or technical issues, all of which are fairly commonplace.”

And while one might take the recent USGS report to mean that there’s plenty of copper out there, that isn’t necessarily the case. The USGS notes in its report that the estimates of undiscovered deposits made in its assessment “represent deposits that are likely to exist, not necessarily deposits that are likely to be discovered.” For instance, it points out that even if discovered, some are deep enough that the logistics and costs associated with mining such deposits would prevent their development.

GMRAP has been going on for over a decade. Still, the fact that a US government agency has made it a priority to delineate the potential for mineral resources around the world speaks to the importance of copper and other metals to the global economy.


Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article. 

Related reading:

World’s Biggest Mining Companies Betting on Copper



S&P 5003901.36+0.57


Heating Oil3.62-0.05
Natural Gas8.06-0.25