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COPPER CONCENTRATES:
SMELTING TECHNOLOGIES UPDATE AND CUCONS MARKET
Jorge Cantallopts
Research and Policy Director Chilean Copper Commission
April 2017
@CochilcoChile
CONTENTS
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02
04
03
05
Background and context
Introduction01
Smelting technologies
Copper concentrates market
Concluding remarks
INTRODUCTION
Chilean Copper Commission
01
INTRODUCTION
• Sulphide copper accounts for almost 80 percent of world mineproduction and more than 2/3 of Chilean production and itsexpected to grow its share over the time.
• Smelting arise as a strategic process for copper producercountries. Chile maintains around 9 percent of global smeltingproduction.
• New technology developments and higher competition forcopper concentrates motivates this study.
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BACKGROUND AND CONTEXT 02
MAIN TECHNOLOGIES
@CochilcoChile Source: Wood et al (2009), Jie (2013), Yunnan Copper (2015), COCHILCO (2015)
Stage Input Output Technology
Smelting ConcentrateMatte, smelting slag
and gasesMainly Bath and Flash
Converting MatteBlister, converting slag
and gasesMainly Peirce-Smith
Refining BlisterAnodic Copper, refining
slag and gasesAnode Furnace
Slag treatment SlagMatte, discard slag and
gasesMilling-flotation, Electric
furnace, Slag furnace
Recentdevelopments
• Chinese reactors (BBS, SBS), bath technology.
• Chilean packed bed converting technology.
• Ausmelt C3 Converting®
CHILEAN CHALLENGE: COMPLEX CUCON
@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)
• Mineralogical composition affects concentrates marketperformance.
• Arsenic compounds arise in northern Chile and some mines inPeru.
• Mixing concentrates from various sources and penaltiescharges could cost more than 200 $US/DMT.
SMELTING TECHNOLOGIES03
OPERATING SMELTERS
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• 57 operating smelter database, accounts for 88 percent ofworld anode capacity in 2016.
Source: Wood Mackenzie (2016), World Metal Statistics (20016)
Zone # SmeltersAnode Capacity 2016
(000’ tonne)
Chile 7 2,008
Rest of America 8 2,226
China 16 5,834
Japan 5 1,923
Rest of Asia 5 2,732
Europe 9 2,685
Rest of the World 7 1,643
Total 57 19,051
SMELTING TECHNOLOGIES
@CochilcoChile Source: Wood Mackenzie (2016)
24 Bath smelters
23 Flash smelters
7 mixedsmelters
3 othersmelters
CHANGING PREFERENCES
@CochilcoChile Source: Wood Mackenzie (2016), COCHILCO (2015)
• Until 2000’s flash smelting technology represent most of thesmelting preferences in new operations.
• Since, most of the new smelter prefer bath smelter, mostlyAusmelt/Isasmelt® furnaces and Chinese reactors.
3
8
13
89
6
34
3
0
2
4
6
8
10
12
14
Before 1980 Between 1980 - 2000 After 2000
# Sm
elte
rs
Smelting technologies through time
Bath
Flash
Mixed
Other
COST COMPARISON BY TECHNOLOGY
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Smelting capacity and direct cash costs*
Source: Wood Mackenzie (2015)
FLASH capacity (44%)Average cost: 15.2 c/lb
Range: 9 to 31 c/lb
BATH capacity (36%)Average cost: 18.8 c/lb
Range: 9 to 45 c/lb
MIXED capacity(17%)
Average cost: 25.6 c/lb
Range: 13 to 68 c/lb
OTH
ER c
apac
ity
(3%
)
*Including labour, energy, maintenance, consumables and services.
Average cost: 26.6 c/lbRange: 19-36 c/lb
BATH SMELTING COST DISPERSION
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• Great differences between bath technologies.
• Teniente/Noranda technology appears to beless competitive as other bath smelters.
• Chinese technology climb on better positions inthe cost curve.
Source: Wood Mackenzie (2016)
Sid
e b
low
n
Isas
mel
t
Ch
ines
e re
acto
r
Au
smel
t
Bo
tto
m b
low
n
Mit
sub
ish
i
Isas
mel
t
Isas
mel
t
Mit
sub
ish
i
Isas
mel
t
Au
smel
t
No
ran
da
Ten
ien
te
Isas
mel
t
Isas
mel
t
No
ran
da
Au
smel
t
Sid
e b
low
n
Ten
ien
te
Ten
ien
te
Au
smel
t Ten
ien
te
-
10
20
30
40
50
60
0 10 20 30 40 50 60 70 80 90 100
Dir
ect
cash
co
st (
c/lb
)
Bath smelting capacity (%)
0
10
20
30
40
50
60
70
0 3 6 9 12 15 18
Dir
ect
cost
(c/
lb)
Anode capacity [Mton]
THE BUSINESS MODEL IMPLICATION
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• Integrated smelters appears in the last position in terms ofcosts.
• High-price cycle decrease competitiveness of integratedsmelters. Effort and investment to mines to increaseprofitability.
Integrated smelters (mine to smelter)
Source: Wood Mackenzie (2016)
0
2
4
6
8
10
12
14
16
18
20
2015
c/lb
Direct Cash Costs
On-site Services (c/lb)
Consumables (c/lb)
Maintenance (c/lb)
Total Gross Energy (c/lb)
Labour (c/lb)
22%
35%14%
12%
17%
SMELTING COSTS
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• Average direct cash cost was 19 c/lb un 2015. Almost 40% oftotal capacity was above that cost.
• Energy (power and fuel) is responsable for more than onethird of avergae costs.
Source: Wood Mackenzie (2016)
COPPER CONCENTRATES MARKET04
COPPER CONCENTRATES MARKET
@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)
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COPPER CONCENTRATES MARKET
@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)
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COPPER CONCENTRATES MARKET
@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)
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COPPER CONCENTRATES MARKET
@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)
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CONCLUDING REMARKS05
CONCLUDING REMARKS
• New developments in China appears attractive but needvalidation in western countries.
• New smelting capacity would tend to consider bathtechnology. But not any.
• Change in technology is not the only driver. Non-integratedsmelters appears as a better bussiness model.
• Chile in the center of a major challenge: Teniente bathsmelting and integrated smelters are less competitive thanany other.
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THANK YOU!
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