Chapter 12: Copper

Copper is one of the oldest metals known to mankind, and definitely the first one to be used extensively. The use of copper signalled the beginning of the progression from the Stone Age to the emergence of the first identifiable civilisations. This transitive period was named Chalcolithic Age, because of the use of both stone (λίθος) and copper (χαλκός). The first alloy ever to be manufactured also involved copper, when it was discovered that adding a small quantity of tin immensely improved copper’s durability. The next long period in human history – the Bronze Age – was named after this alloy, and trading activities often emerged because of the need to find new sources of copper and tin.

Copper objects have been found among the remains of many ancient civilisations, including those of Egypt, Asia Minor, China, South-eastern Europe, Cyprus (from which the word copper is derived) and Crete. It was also known to ancient American civilisations and European explorers found evidence of extensive use of the metal for utilitarian and ornamental purposes.

Copper was valued for its attractive red lustre, its malleability, and its resistance to corrosion; and was used extensively for the construction of tools and weapons. With the advent of iron, the use of copper was restricted to more domestic and ornamental uses but, during the Middle Ages and in the early modern era, the use of copper in the manufacture of brass cannons and other military supplies greatly increased the consumption of the metal.

At the beginning of the Industrial Revolution almost all of the world’s refined copper was produced in Britain but, as the Revolution proceeded, other countries soon overtook Britain, and one of them – Chile – came to be the most important producer and exporter after the 1850s, holding this position until today.

Physical characteristics

Copper occurs in a variety of ores but unlike aluminium and iron, which are found in relatively large concentrations, it is contained only in small quantities – at best 5-6%, sometimes as low as 0.5%. Copper occurs in three types of minerals – sulphides, carbonates, and silicates. The principal copper compounds are chalcopyrite and bornite, mixed sulphides of copper and iron. Other important ore minerals are chalcocite and covellite, sulphides of copper, which are found in Arizona and Nevada in the United States and in Cornwall, England. Enargite, a sulpharsenate of copper, is found in various parts of the United States. Azurite, a basic carbonate of copper, is found in France and Australia; and malachite, also a basic carbonate of copper, in the Ural Mountains. Tetrahedrite, a sulphantimonide of copper and various other metals, and chrysocolla, a copper silicate, are both widely distributed. Cuprite, an oxide, is found in Cuba; and atacamite, a basic chloride, in Peru.

Supply determinants

Copper deposits are usually classified into three main categories: porphyry; strata-bound; and massive sulphide. Porphyry are the most common deposits, primarily found in Chile, Peru, south-west United States, northern Mexico, western Canada, Papua New Guinea and Philippines. The grade and size of these deposits vary considerably: typical deposits in Chile and Peru contain 1-2% Cu; in the United States and Mexico, ores typically have 0.4-0.8% Cu; Philippines and Canada have ores with a 0.3-0.5% Cu content. Exhibit 1 shows the key reserve holders, among which Chile is the largest with a fifth of the world’s total reserves.

Strata-bound deposits are typically silicates and carbonates, but also sulphides. They are not as important and widespread as porphyry deposits, but they usually have the largest copper content. They are encountered mostly in Zaire and Zambia; Zambian deposits are sulphides with 2-4% Cu content; Zairian deposits are carbonates and silicates, with 4-6% Cu content. Finally, massive concentrations of sulphide minerals also contain copper, and occur mainly in eastern Canada, Australia, South Africa and Philippines; they usually contain 1-5% copper.

The metallurgy of copper varies with the composition of the ore. The most important ores – the sulphides – must first be crushed and concentrated by flotation. The outcome of the flotation is a product containing 22-32% copper by weight. On the other hand, carbonates, silicates, and oxides, usually undergo a process known as leaching.[1]

After crushing, the concentrates are roasted – or smelted – in furnaces, which yield crude metallic – or blister – copper, approximately 98% pure. There are two main types of furnaces used for roasting: reverberatory furnaces, which are rather old-fashioned, and inefficient in burning the sulphur in the concentrates; and the flash furnace, which uses oxygen to remove iron and sulphur in the form of slag.

Flash smelting is a more efficient method, especially because it yields a desirable by-product, sulphur dioxide, which can be recovered in a sulphuric acid plant. Some of the variants of this method include the Noranda, Mitsubishi, and Outokumpu processes.

An alternative to smelting (pyrometallurgy) is the use of hydrometalllurgy, whereby copper concentrates are leached in an acid solution, and separated with the method described in footnote [1]. There are several hydrometallurgy processes, the most well-known being: Cymet (by Cyprus Corp.); CLEAR (by Duval); and Arbiter (by Anaconda).

Whether pyrometallurgy or hydrometallurgy is used, the result is crude copper, which is further purified by electrolysis, yielding bars – or copper cathodes – exceeding 99.9 percent purity. Finally, copper can also be manufactured from recycled copper scrap.

Production

One of the main pre-requisites for a successful mining project is that the metal occurs in large enough concentrations, and large enough quantities. In the case of copper, this becomes even more important, because copper is found in rather small concentrations in its ores. Copper manufacturers normally extend their interests in mining as well, with the biggest of them having interests on a worldwide basis.

As of 2023, Chile remains the world’s largest producer of copper ore, with almost a third of world production, as can be seen in Exhibit 3. China has increased its presence in mine production, following its rapid industrialisation from 2004 onwards; it is currently the fourth largest producer of copper ore, with nearly 2 million metric tons of copper content. Other important producers include DR Congo, Peru, USA, Australia and Zambia. 

Only a few years ago, Chile was also the world’s leading copper smelter. From 2005 onwards, however, China rose head and shoulders above Chile and other important copper smelters, such as Japan and Russia. This leading group is followed by Japan, Russia, India and Zambia. Exhibit 6 shows the development in smelter production in terms of primary and secondary copper, while Exhibit 7 shows the shares over the various producing regions, where the large share of Asian countries is evident.

This change in leadership follows through to refined copper production, with China at the top, followed at some distance by Chile. Other important refined copper producers include Japan, USA, Russia, India, Germany, South Korea, Poland, Australia and Zambia. Exhibit 8 shows the development of refined copper production by type, while Exhibit 9 shows production in key geographical regions.

For the same reasons as for the aluminium industry, there are strong tendencies for concentration in the copper industry, as well. With the emergence of China and India as new dynamic economies based on manufacturing and IT (both requiring copper resources), it became evident that the formerly neglected copper sector became a prime target for investment once again. As a result, the first few years of the new millennium saw substantial takeover activity. 

Other important producers include Southern Copper Corporation (with operations in Peru and Mexico), Anglo American (with operations in Chile, having bought Disputada from ExxonMobil, and South Africa), KGHM Polska Miedź (which produces copper in Poland). Finally, several other companies have smaller interests in copper mining and smelting.  Brazil’s Vale explores for copper in the Carajás region, not far away from its own iron ore operations, as well as in Peru through its association with Antofagosta. India’s Vedanta has a controlling share in Zambia’s KCM (Konkola Copper Mines) and also has copper operations in India.

Demand determinants

Refined copper usage rapidly increased since the 1990s, rising from 10 million tonnes to 25 million tonnes in 2020 and higher up since then. Copper is a versatile metal, used in a wide range of applications. Pipes for plumbing, telecoms cable, power generation and transmission and a variety of automotive components, are just a few examples of such applications. Exhibits 10 and 11 show the shares of some of copper’s main first uses by product and end uses by sector.

One of its principal uses is for electrical products, because of copper's extremely high conductivity, which is second only to that of silver. Because copper is very ductile, it can be drawn into wires of any diameter from about 0.025 mm upwards. The tensile strength of drawn copper wire is about 4,200 kg/cm2; it can be used in outdoor power lines and cables, as well as in house wiring, lamp cords, and electrical machinery such as generators, motors, controllers, signalling devices, electromagnets, and communications equipment.

Copper has been used for coins throughout recorded history and has also been fashioned into cooking utensils, vats, and ornamental objects. Copper was at one time used extensively for sheathing the bottom of wooden ships to prevent fouling. Copper can easily be electroplated alone, or as a base for other metals. Large amounts are used for this purpose, particularly in making electrotypes –  reproductions of type for printing.

Certain copper solutions have the power of dissolving cellulose, and large quantities of copper are for this reason used in the manufacture of rayon. Copper is also used in many pigments and in such insecticides as Paris green and such fungicides as Bordeaux mixture, although it is being largely replaced by synthetic organic chemicals for these purposes.

As for any other metal, demand for copper is affected by the income disposable to consumers; copper is normally used in goods which have high income elasticities – like cables, cars, machinery, etc. – and is, therefore, more responsive to income changes when the absolute level of income is low, i.e. when the economy is edging out of the ‘pre-industrial’ an into the ‘take-off’ stage. On the other hand, mature economies with high disposable incomes grow accustomed to goods, which are considered luxuries in less well-off countries, so that demand for these products – and their components – becomes less income elastic.

The use of copper in an economy is also affected by the degree of substitution between this metal and other metals, e.g. aluminium. In recent years, copper has been challenged by competitive materials on three main fronts – electricity transfers, telecommunications and building construction. In electricity transfers, copper is challenged by aluminium, which displays a low weight-to-conductivity ratio and is, therefore preferable, especially for long-distance transfers of high-voltage current, using overhead cables. In telecommunications, copper is increasingly challenged by optic fibres, which have an edge when transferring signals from the source of emission to distribution centres; copper wires, however, are still very much used for connecting individual consumers to distribution points. Finally, in building construction copper is being challenged by plastics and other materials, which are now extensively replacing copper in plumbing and weatherproofing.

As the reader can deduce, the usage of copper is closely associated with the growth of industrial production and economic development. As a result, countries on a path of rapid economic development tend to use more copper across all sectors. The rapid economic growth of China and several other countries in the same region resulted in the shift of demand from Europe and N. America to Asia, as can be seen in Exhibits 12 and 13.

Trade and pricing

Copper is shipped from the refinery in five different shapes: cathodes, wirebars, continuous cast rod, billets, and cakes. Billets are normally used to produce seamless copper tubes, while cakes are large slabs of copper, used by fabricators to make plates, sheets, strips, and bars. 

It is the largest of anode copper producers that offer all of these products on the market, while a host of smaller, independent copper fabricators produce a wide range of finished copper, bronze and brass products, including tubes, plates, extrusions in many shapes and types and, of course, cable.

Copper was among the world’s top ten traded commodities in 2024, with a turnover of ca. $230bn for trade in copper products, whether semi-fabricated or finished products (see Exhibits 14 and 15). Compared to steel and aluminium ores and concentrates, however, copper generates only small volumes of trade. Crude copper ores are almost never traded, because they contain uneconomically small concentrations of copper.

Instead, copper concentrates are exported to large copper refiners, such as China and Japan (see Exhibits 16 and 17). Copper is often smelted at the place of production and exported in the form of either unrefined copper (anode/blister copper, ca. 98% purity), refined copper (99.9% purity), alloyed products and scraps (see Exhibits 18-23).

As would be expected, Chile dominates international exports of copper in all forms except unrefined copper (anodes), where Zambia is the biggest exporter. Other important exporters include DR Congo, Peru, Australia, Mexico and Indonesia. In terms of importers, China features in all types of imports, accompanied by countries such as Japan, South Korea, India, Germany and Spain.

Concentrate pricing

From the analysis so far, it has become evident that the market for copper is very competitive, on an international basis. Copper pricing is quite similar to aluminium, with benchmark prices for the finished metal set in the two most liquid metal exchanges – the London Metal Exchange (LME) and the COMEX division in the New York Mercantile Exchange (part of the CME Group). A variety of derivative instruments on copper are actively traded on both markets and we shall discuss these in a later chapter.

The LME is considered as the price setter for the international copper market, and is also used as a benchmark for refined copper prices in domestic markets, as well as for differential pricing of copper concentrates. On the latter topic, it is worth expanding a bit more, as pricing copper concentrates reflects the common pricing practices for most non-ferrous base metals.[2]

Conclusion

In this chapter we examined the structure of the world’s oldest metal, copper, which still plays a vital role in our modern society. Unlike steel, but like aluminium, copper is a fairly standardised metal and both copper and aluminium are priced somewhat differently to steel. Both metals have been traded in organised exchanges for over a century, together with a few other base metals, such as lead, zinc, tin and nickel. 

Trade in copper is mainly in refined products, rather than crude ore, and, compared to iron and aluminium, it is rather small. The international market for copper is very competitive, with prices being determined primarily on the LME, and also on COMEX/NYMEX for the US market.  Due to the nature of its end uses, copper (like aluminium) is consumed primarily in developed and newly industrialising economies, such as China, Japan, India, North America and the EU.

References

Crowson, P. (2008). Mining Unearthed. Aspermont. London.

International Copper Study Group (2022). The World Copper Factbook 2022. https://icsg.org/copper-factbook/

Tarring, T.J. & Pinney, G. (1996) Trading in Metals. 3rd ed. Metal Bulletin. London.

US Geological Survey (2023). Copper Statistics and Information. https://www.usgs.gov/centers/nmic/copper-statistics-and-information