To address the shortage, more new mines need to be built. Just to meet the regular copper demand, the world must produce 115 percent more copper, according to a report from researchers at Cornell University and the University of Michigan, published by the International Energy Forum.
“To electrify the global vehicle fleet requires bringing into production 55 percent more new mines than would otherwise be needed,” the report said.
This article delves into the key advantages and challenges associated with revitalizing old copper mines and cites examples of successful restarts in recent history, helping investors gain insight into this mining trend.
Advantages of existing infrastructure
Typically, it takes about 10 to 20 years to build a new mine, from exploration to production, with regulatory and financial hurdles in between. This is why past-producing assets, those with historical resources, existing infrastructure and local skillset provide a quicker pathway to production.
The ability to leverage existing infrastructure can dramatically reduce capital expenditures, allowing mining companies to allocate resources more efficiently. A prime example of this approach is Doré Copper Mining's (TSXV:DCMC,OTCQB:DRCMF) efforts in the Chibougamau mining camp in Québec, Canada.
Doré Copper, which is set to be acquired by Australia's Cygnus Metals (ASX:CY5), has focused on advancing its hub-and-spoke operation with multiple high-grade copper-gold assets feeding its centralized Copper Rand mill. The Copper Rand mill closed in 2008 and Doré Copper has started to refurbish the mill. The mill is located at the past-producing Copper Rand mine, which was the largest mine in the Lac Doré (Chibougamau) mining camp in Québec. It operated from 1959 to 2008 and extracted 16.45 million MT at an average grade of 1.8 percent copper and 2.8 grams per MT gold.
This strategic move capitalizes on the existing infrastructure within the Copper Rand mill, significantly reducing the costs associated with new construction. The company's preliminary economic assessment( PEA), released in May 2022, demonstrated positive projections for the restart of the operations, underscoring the economic viability of this approach.
The PEA supports a hub-and-spoke model that leverages the nearby high-grade Corner Bay copper-gold deposit. This model not only enhances efficiency but also maximizes resource extraction from known sites, illustrating how past-producing mines can be revitalized to yield substantial economic benefits.
The Pumpkin Hollow mine, located in Yerington, Nevada, has seen several starts and restarts over the years, since it was acquired by Nevada Copper in 2006. Now owned by Kinterra Capital, the 22,862 acre Pumpkin Hollow copper project is bound for a restart. The asset consists of a large-scale, permitted, open-pit project and an underground mine with significant existing infrastructure.
In Southern Spain, the Aguablanca project, operated by Denarius Metals (OTCQX:DNRSF,FWB:T7C0), is a historic nickel-copper producer discovered in 1994 that was mined for 11 years, from 2005 to 2015. The project has an environmental permit from 2017 that is still in force, and includes a 5,000 MT per day processing plant that's in good condition.
Economic opportunities
Restarting past-producing mines and mills can provide a significant boost to local economies. One of the most immediate and tangible benefits is job creation. When these sites are brought back to life, they generate a wide range of employment opportunities, from skilled mining positions to roles in supporting industries.
Doré Copper's operations, for instance, are located a mere 10 kilometers from the town of Chibougamau, offering local employees the opportunity to go home daily.
The impact of these jobs extends beyond direct employment in the mining sector. As workers are hired and spend their wages locally, there's a multiplier effect that stimulates growth across various sectors of the local economy. This can lead to improved infrastructure, better public services, and an overall increase in the standard of living for communities near these revitalized mining operations.
Another economic advantage is the potential for toll milling. This practice allows mining companies to offer processing services to other miners, creating an additional revenue stream. Smaller mining operations can benefit from access to processing facilities without the need for substantial capital investment, fostering a more collaborative and efficient industry ecosystem.
Maximizing resource extraction
Advancements in mining technology and changing market conditions can make previously uneconomical deposits viable for extraction. By refurbishing past-producing mines, companies can access these newly valuable resources, maximizing the potential of known sites.
A Reuters analysis shows that current ongoing efforts to restart old mines could collectively provide around 7 million MT of copper to the market. This not only helps meet growing demand but also extends the production life of existing mining sites, reducing the need for new exploration and its associated environmental impacts.
While the economic and operational benefits of refurbishing past-producing assets are substantial, this approach is not without its challenges. One of the primary concerns is ensuring compliance with current environmental standards, which may have evolved significantly since the original operation of the mine.
Mining companies must navigate complex regulatory landscapes, often requiring substantial investments in environmental remediation and updated safety measures. This can include addressing historical site conditions, such as managing tailings or mitigating acid mine drainage.
Additionally, there may be technical challenges in integrating modern mining techniques and equipment with existing infrastructure. This requires careful planning and often specialized expertise to ensure that the refurbished operation is both efficient and compliant with current industry standards.
Key takeaway
Revitalizing past-producing mines and mills represents a compelling opportunity for the mining industry and investors in the critical minerals space. By leveraging existing infrastructure, stimulating local economies, and maximizing resource extraction, companies can achieve significant economic benefits while potentially reducing their environmental footprint.
Given the right assets under ideal conditions, companies such as Doré Copper are leveraging this advantage to get ahead of the copper supply race by unlocking value in known deposits while minimizing capital expenditures. As the global demand for critical minerals like copper continues to grow, the strategy to revitalize and restart past-producing mines offers a path to sustainable resource extraction that balances economic opportunity with responsible stewardship.
This INNSpired article is sponsored by Doré Copper Mining (TSXV:DCMC,OTCQB:DRCMF,FWB:DCM). This INNSpired article provides information which was sourced by the Investing News Network (INN) and approved by Doré Copper Miningin order to help investors learn more about the company. Doré Copper Mining is a client of INN. The company’s campaign fees pay for INN to create and update this INNSpired article.
This INNSpired article was written according to INN editorial standards to educate investors.
INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.
The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Doré Copper Miningand seek advice from a qualified investment advisor.
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