Module 1 · The metal and the rock

Grade, cut-off and what a reserve commits you to

Level 2 · Working knowledge 10 min read 4 questions

Grade is not a property of a deposit. Cut-off grade is a decision that depends on price, cost and recovery, and it redraws the orebody every time one of the three moves.

A deposit contains copper at every concentration from nothing to a few per cent. Which of that is ore is not a geological question. It is the answer to a commercial one: at what concentration does a tonne of rock pay for its own mining, hauling, crushing, grinding, floating, smelting and refining, plus a return on the capital that built the plant?

That threshold is the cut-off grade, and it moves. Raise the copper price and material previously classed as waste becomes ore. Raise the diesel price or the power tariff and the reverse happens. Improve recovery in the concentrator by a point and the cut-off falls slightly for the whole deposit. The general treatment on this site is at grade and cut-off; what follows is what it means specifically for copper.

The numbers that actually describe a copper mine

Head grade

The copper content of the ore fed to the plant. For porphyries, typically in the range of a few tenths of a per cent to about one per cent.

Recovery

The share of the copper in the feed that ends up in concentrate. The rest goes to tailings and is gone.

Strip ratio

Tonnes of waste rock moved per tonne of ore. It usually rises as a pit deepens, which raises cost per tonne of copper over the mine's life.

Throughput

Tonnes of ore processed per day. When grade falls, throughput has to rise to hold metal output flat - which is why concentrators keep getting bigger.

By-product credits

Revenue from gold, silver, molybdenum and others, subtracted from cost to give a 'net of by-products' cash cost. It makes cost comparisons between mines treacherous.

Falling grades are the industry's structural problem

The richest and most accessible parts of known deposits are mined first, so the average grade of what remains declines over time. Holding copper output constant against a falling grade requires moving and grinding more rock for the same metal, which means more energy, more water, more equipment and larger tailings facilities. This is the quiet reason copper's cost curve steepens even when no individual mine has done anything wrong.

Where the world's copper is, on paper

Reserves are not the same as resources, and neither is the same as how much copper exists. This site's reserves versus resources lesson is the short version; the practical consequence is that a reserve figure rising is at least as likely to be an economic event as a geological one.