STORY INLINE POST
The 1960s were colloquially known as the “porphyry heyday” within the mining industry. This was due to the recognition that very large, but low-grade copper deposits were economically viable due to the application of bulk mining and processing methods that dramatically reduced the unit costs to produce the red metal. These giant deposits, known as porphyry copper deposits, had often been overlooked by previous generations of explorers as the grades were too low to consider for mining by traditional methods. Open pit mines using huge machinery to excavate and haul the ore, and larger scale milling equipment to process the ore, brought down operating costs by an order of magnitude.
Copper has been an increasingly important part of the global economy as we strive to reduce reliance on fossil fuels. The solution has been to replace internal combustion engines with various forms of electronics and clean energy options. All of these solutions require substantial amounts of copper, which has ensured a continuously increasing demand for the metal, which has no rivals in terms of its usability in power transmission, electric motors and circuitry. With such strong demand, we clearly need to start finding more deposits.
When the transition to the big lower-grade open pit mines occurred, the exploration community intensified its search for these lumbering giants that were previously passed by. Airborne magnetics surveys, alternation mapping and reconnaissance geochemical surveys, such as stream sediment sampling and soil sampling, were used to home in on the big targets. During the 1950s but especially the 1960s, a multitude of discoveries were made and many of them were quickly put into production.
Today, many of those mines have been exhausted or are in the late stages of mine life at a time when the need for copper has never been greater. So, the pressure is on for the exploration community to come up with the next generation of discoveries and with a rising copper price, a substantial effort is underway. Unfortunately, the discovery rate over the past decade is less than impressive. A study completed by S&P Global estimates that there have been 16 major discoveries over the past decade, so an average of 1.6 discoveries per year. Between 1990 and 2010, there were 209 major discoveries or 10.5 discoveries per year. That is an order of magnitude drop in success rate, despite a substantial effort being made.
The reason for that change can be described as “the low hanging fruit has been plucked.” In other words, the big deposits that are found lying on the surface have mostly been found. The next generation of discoveries will be those that are covered under substantial thicknesses of glacial till, gravel, or in many cases, considerable thicknesses of unmineralized bedrock. To overcome this problem, geologists must rely more heavily on technology to vector their exploration efforts. For instance, deep looking geophysical techniques have been developed that can identify areas of higher metal content at depth. It falls short of being able to specifically identify copper mineralization, but it can get the geologists into the right area to develop a specific exploration plan, which usually employs deep drilling. Then the geologists need to convince investors to fund their ideas and allow drilling into the deep targets in order to test the thesis. It is a business that is fraught with risk of failure, but the reward for success can be substantial. This will be the challenge that industry will need to address with an evolving and increasingly sophisticated approach in the coming years.