Economic of Copper Processing

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Economic of Copper ProcessingEconomic of Copper ProcessingBy : Pambudi Pajar Pratama BEng., MSc.

Economic of Milling and Smelter Processing

Milling and Smelter Costs The balance between milling cost and metal losses is crucial,

particularly with low-grade ores. Most mills keep detailed accounts of operating and maintenance

costs, broken down into various sub-division, such as labor, supplies, energy, etc. for the various areas of the plant.

The analysis is very useful in identifying high-cost areas where improvements in performances would be most beneficial. It is impossible to give typical operating costs for milling operations, as these vary enormously from mine to mine and particularly from country to country, depending on local costs of energy, labor, water, supplies, etc. Table 1 shows a simplified example of such a breakdown of costs for 100,000 tpd copper concentrator.

The balance between milling cost and metallurgical efficiency is very critical on a concentrator treating an ore of low contained value, where it is crucial that milling costs be as low as possible.

Economic of Milling Processing

Milling Costs (Simplified of Breakdown Costs)Table 1. Costs per metric tonne milled for a 100,000 tpd copper concentrator

Item Cost – US$ per tonne Percent Cost

Crushing 0.088 2.8

Grinding 1.482 47.0

Flotation 0.510 16.2

Thickening 0.111 3.5

Filtration 0.089 2.8

Tailings 0.161 5.1

Reagents 0.016 0.5

Pipeline 0.045 1.4

Water 0.252 8.0

Laboratory 0.048 1.5

Maintenance Support 0.026 0.8

Management Support 0.052 1.6

Administration 0.020 0.6

Other expenses 0.254 8.1

Total 3.154 100

Economic of Smelter Processing

Smelter Costs Such smelter contract are usually fairly complex. Concentrates are sold under contract to “custom smelters” at

prices based on quotations on metal markets such as London Metal Exchange (LME).

The smelter, having processes the concentrates, disposes of the finished metal to consumers.

The proportion of the “free market” price of the metal received by the mine is determined by the terms of the contract negotiated between mine and smelter, and these terms can vary considerably.

Table 2 summarizes a typical smelter contract for the purchase of copper concentrates.

As is usual in many contracts, one assay unit is deducted from the concentrate assay in assessing the value of the concentrates, and arsenic present in the concentrates is penalized.


Smelter Costs A typical smelter contract for copper concentrates is

summarized in table 2. Table 2. Simplified copper smelter contract

Payments

Copper Deduct from the agreed copper assay 1 unit, and pay for the remainder at the LME price for higher-grade copper.

Silver If over 30 gpt pay for the agreed silver content at 90% of the LME silver price.

Gold If over 1 gpt pay for the agreed gold content at 95% of the LME gold price.

Deductions

Treatment charge £ 30 per dry tonne of concentrates.

Refining charge £ 115 per tonne of payable copper.


Smelter Costs The concentrate assay is the prime importance in determining the

valuation, and the value of the assay is usually agreed on the result of independent sampling and assaying performed by the mine and smelter.

The assays are compared and if the difference is no more than an agreed value, the mean of the two results may be taken as the agreed assay.

In the case of a greater difference, an “umpire” sample is assayed at an independent laboratory.

This umpire assay may be used as the agreed assay, or the mean of this assay and that of the party which is nearer to the umpire assay may be chosen.

The use of smelter contracts and the importance of the by-products and changing metal prices, can be seen by briefly examining the economics of processing two base metals -gold and copper- whose fortunes have fluctuated over the years for markedly different reasons.

Separation Efficiency (Economic Combination)

Separation Efficiency Although the value of separation efficiency can be useful in

comparing the performance of different operating condition on selectivity, it takes no account of economic factors and as will become apparent, a high value of separation efficiency does not necessarily lead to the most economic return.

Since the purpose of mineral processing is to increase the economic value of the ore, the importance of the recovery-grade relationship is in determining the most economic combination of recovery and grade which will produce the greatest financial return per tonne of ore treated in the plant.

This will depend primarily on the current price of the valuable product, transportation cost to the smelter, refinery, or other further treatment plant and the cost of such further treatment, the latter being very dependent on the grade of concentrate supplied.


Separation Efficiency A high grade concentrate will incur lower smelting costs, but

the lower recovery means lower returns of final product. A low grade concentrate may achieve greater recovery of the values, but incur greater smelting and transportation cost due to the included gangue minerals.

Also of importance are impurities in the concentrate which may be penalized by the smelter, although precious metals may produce a bonus.

The net return from the smelter (NSR) can be calculated for any recovery-grade combination from:

This summarized in Figure 1, which shows that the highest value of the NSR is produced at an optimum concentrate grade which is as close as possible to this target grade.


NSR vs Concentrate grade It is essential that the mill achieves a concentrate grade which is as close as possible to this target grade. Although the effect of moving slightly away from the optimum may only be of the order of a few pence per

tonnes treated, this can amount to very large financial losses, particularly on high-capacity plants treating thousands of tonnes per day (TPD).

Figure 1. . Variation of payments and charges with concentrate grade


Effect of Metal Price on NSR vs Concentrate Grade

Changes in metal price, smelter term, etc., obviously affect the NSR-concentrate grade curve and the value optimum concentrate grade.

For instance, if the metal price increases, then the optimum grade will be lower, allowing higher recoveries to be attained.

Figure 2. . Effect of metal price on NSR-grade relationship


Other costs impact to NSR It is, of course, necessary to deduct the costs of mining and

processing from the NSR in order to deduce the profit achieved by the mine.

Some of these costs will be indirect, such as salaries, administration, research and development, medical and safety, as well as direct costs, such as operating and maintenance, supplies and energy.

The breakdown of milling costs varies enormously from mine to mine, depending very much on the size and complexity of the operations.

Mines with very large ore reserves tend to have very high throughputs, and so although the capital outlay is higher, the operating and labour costs tend to be much lower than those on smaller plants.

Mining costs also vary enormously, and are very much higher for underground than for open-pit operations.

Effective costs of Copper Processing

Example of porphyry copper mine processing costs

A typical smelter contract for copper concentrates is summarized in Table 2. Consider a porphyry copper mine treating an ore containing 0.6% Cu to produce a concentrate containing 25% Cu, at 85% recovery. This is a concentrate production of 20.4 kg/ton of ore treated. Therefore, at a copper price of £ 980/ton.


Example of porphyry copper mine processing costs Assuming a freight cost of £ 20/ton of concentrate,

The total deduction are £ (0.61 + 0.56 + 0.41) = £ 1.58 The NSR per tonne of ore treated is thus

As mining, milling, and other costs must be deducted from this figure, it is apparent that this mine with very low operating costs can have any hope of profiting from such low-grade operations.

Assuming a typical large open-pit mining costs of £ 1.25/ton of ore, a milling cost of £ 2/ton and indirect costs of £ 2/ton, the mine will lose (for every tonne of ore treated):


The breakdown of costs and revenue is summarized in Figure 3.

Figure 3. . Breakdown of costs and revenues for treatment of typical porphyry copper ore (fmp = free market price)

1 ton of mined ore (0.6% Cu)Contained value = £ 5.88 (fmp)

MINING

Concentrate (85% recovery) Contained value £ 5.00 (fmp)

TailingContained value £ 0.88 (fmp)

Transport, smelting & refining

Effective cost£ 5.00 - £ 3.22 = £ 1.78

Payment of £ 3.22

PROCESSING

Cost £ 3.25(inc. other costs)

Cost £ 2


As each tonne of ore produces 0.0051 t of copper in concentrates, with a free market value of £ 5.00, so total production costs of copper in concentrates :

However, if the ore contains appreciable by-products, the effective production costs are reduced.

Assuming the concentrate contains 25 gpt of gold and 70 gpt of silver, then

The payment of gold, at LME price of £ 230/troy oz (1 troy oz = 31.1035),

The payment of silver, at LME price of £ 4.5/troy oz,


The NSR is thus increased to: (per tonne of ore treated)

And the mine makes a profit of (per tonne of ore treated)

The Effective Production Cost (EPC) of 1 tonne of copper is thus reduced to:

By-products are thus extremely important in the economic of copper production, particularly for very low-grade operation.

In this example, 42% of the mine’s revenue is from gold, copper contributing 56%.


Since the profit margin involved in the processing of modern copper ores is usually only small, continual efforts must be made to try to reduce milling costs and metal losses.

Even relative small increases in return per tonne can have a significant effect, due to the very large tonnages that are often treated.

There is, therefore, a constant search for improved flowsheets and flotation reagents.

Figure 3 above shows that in the example quoted, The contain value in the flotation tailings is £ 0.88/ton of treated

ore. The concentrate contains copper to the value of £ 5.00, but the

smelter payment is £ 3.22. Therefore, the mine realizes only 64.4% of the free market value of

copper in the concentrate. On this basis, the actual metal loss into the tailings is only about £ 0.57/ton of ore. This is relatively small compared with milling costs and an increase in recovery of 0.5% would raise the net smelter return by only £ 0.01.


Nevertheless, this can be significant; to a mine treating 50,000 tpd, this is an increase in revenue of £ 500/day, which is extra profit, providing that is not offset by any increased milling costs.

For example, improved recovery may be possible by the use of more effective reagent or by the use of a more effective reagent or by increasing the dosage of an existing reagent, but if the increased reagent cost is greater that the increased in smelter return, the action is not justified. Reagent costs are typically around 10% of the milling costs on a large copper mine, but energy costs may contribute well over 25% of these costs.

Grinding is by far the greatest energy consumer and this process undoubtedly has the greatest influence on metallurgical efficiency. Grinding is essential for liberation of the mineral in the assembly,

but it should not be carried out any finer than is justified economically.

Not only is fine grinding energy intensive, but it also leads to increased media costs.


Grinding steel often contributes as much as, if not more than, the total mill energy cost, and the quality of grinding medium used often warrants special study.

Grinding is by far the greatest energy consumer and this process undoubtedly has the greatest influence on metallurgical efficiency.

Figure 4 shows the effect of the fineness of grind on NSR and grinding costs foe a typical low-grade copper ore. Although flotation recovery, and hence NSR, increases with fineness of grind, it is evident that there is no economic benefit in grinding finer than 105 microns. Even this fineness will probably by beyond the economic limit because of the additional capital cost of the grinding equipment required to achieve it.

Figure 4. . Effect of fineness of grind on net smelter return and grinding costs

Economic Efficiency

It is evident from the foregoing that the metallurgical significance of grade and recovery is of less importance than the economic consideration.

It is apparent that a certain combination of grade and recovery produces the highest economic return under certain conditions of metal price, smelter term, etc.

However, this metallurgical efficiency combination may not promote the highest return if those conditions change.

Economic efficiency compares the actual NSR per tonne of ore milled with the theoretical return, thus taking into account all the financial implications.

The theoretical return is the maximum possible return that could be achieved, assuming “perfect milling”, i.e. complete separation of the valuable mineral into the concentrate, with all the gangue reporting to tailings.

Using economic efficiency, plant efficiency can be compared even during periods of fluctuating market conditions.

Economic Efficiency

Example the calculation of overall economic efficiency The following assay data was collected from a copper-zinc

concentrator:

Mass flow measurement showed that 2.6% of the feed weight reported to the copper concentrate, and 3.5% to the zinc concentrate.

Calculate the overall economic efficiency under the following simplified smelter terms:

Feed 0.7% Copper 1.94% Zinc

Cu Concentrate 24.6% Copper 3.40% Zinc

Zn Concentrate 0.4% Copper 39.7% Zinc

Copper

Copper price £ 1,000/ton

Smelter payment 90% of Cu content

Smelter treatment charge £ 30/ton of concentrate

Transport cost £ 20/ton of concentrate

Economic Efficiency

Zinc

Zinc price £ 400/ton

Smelter payment 85% of Cu content

Smelter treatment charge £ 100/ton of concentrate

Transport cost £ 20/ton of concentrate

Economic Efficiency

Economic Efficiency

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Economic of Copper Processing

Technology

smelter processing milling

agreed copper assay

agreed assay

typical smelter contract

concentrate assay

agreed value

use of smelter contracts

assay unit