Chile’s largest copper mines have enough reserves of the coveted red metal to keep production levels steady for another 89 years at least, according to a study published by Gustavo Lagos, at the prestigious Universidad Católica’s Mining Center.
Measuring copper resources and reserves
Copper supply can be seen through two prisms: resources and reserves. Lagos explained that while “geological resources” refer to the total amount of identified mineral wealth, “reserves” correspond to the resources that are economically viable to extract at the current price, using available technology.
Chilean copper reserves today
In the case of state-owned Codelco, Lagos estimated the mining venture’s productive life to last for another 200 years – making it the reserves with the longest projected lifespan in Chile.
In fact, the Codelco reserves “are the largest copper reserves in the world,” said Diego Hernández, executive president of the state mining company.
Projections for the private sector are also on the increase, with mining giant BHP Billiton recently launching an exploratory probe that resulted in an announced increase of 17 percent in its overall copper resources. Of those deposits, the Escondida Mine in Antofagasta, which is the world’s highest producing copper mine, saw a further 25 percent increase in its reserves.
“Looking towards the future, the success of our exploratory program … suggests that we have enough resources in Escondida to sustain production at current levels for more than a century,” said Peter Beaven, president of BHP Billiton’s Base Metals division. Lagos’ calculations based on 2011 production levels confirmed that Escondida has enough copper for another 110 years.
Chile’s other major mining presences – Anglo American, Xstrata, and a Japanese consortium led by Mitsui – also announced substantial increases in their copper reserves at the Collahuasi mine. Los Pelambres, operated by the Luksic Group, similarly announced increased reserves several weeks ago.
A copper-toned future
All these resources mean that the copper industry has the capacity to promote Chilean economic development for decades, said John Tilton, of the Colorado Mining School. Tilton cautioned, however, that high prices will not last forever.
“High prices in recent years reflect the simple fact that we haven’t been able to increase capacity quickly enough to meet growing demand from China and other developing countries,” he said.
His Chilean colleague, and director of the Copper Study Center (Cesco), Juan Carlos Guajardo, said that resources are only the first step towards maintaining a profitable industry. Chile also has to continue nurturing its favorable environment for foreign direct investment, as well as strong institutions, with sustainable environmental and social standards, Guajardo said.