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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

01 Introduction

02 Background and context

03 Smelting technologies

04 Copper concentrates market

05 Concluding remarks

@CochilcoChile
 01 INTRODUCTION

Chilean Copper Commission

 INTRODUCTION

• Sulphide copper accounts for almost 80 percent of world mine

production and more than 2/3 of Chilean production and its
expected to grow its share over the time.

• Smelting arise as a strategic process for copper producer

countries. Chile maintains around 9 percent of global smelting
production.

• New technology developments and higher competition for

copper concentrates motivates this study.

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02 BACKGROUND AND CONTEXT
 MAIN TECHNOLOGIES

Stage Input Output Technology

Matte, smelting slag
Smelting Concentrate
and gases
Mainly Bath and Flash
Blister, converting slag
Converting Matte Mainly Peirce-Smith
and gases
Anodic Copper, refining
Refining Blister Anode Furnace
slag and gases
Matte, discard slag and Milling-flotation, Electric
Slag treatment Slag
gases furnace, Slag furnace

• Chinese reactors (BBS, SBS), bath technology.

Recent
• Chilean packed bed converting technology.
developments
• Ausmelt C3 Converting®

@CochilcoChile Source: Wood et al (2009), Jie (2013), Yunnan Copper (2015), COCHILCO (2015)
 CHILEAN CHALLENGE: COMPLEX CUCON

• Mineralogical composition affects concentrates market

performance.

• Arsenic compounds arise in northern Chile and some mines in

Peru.

• Mixing concentrates from various sources and penalties

charges could cost more than 200 $US/DMT.

@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)

03 SMELTING TECHNOLOGIES
 OPERATING SMELTERS

• 57 operating smelter database, accounts for 88 percent of

world anode capacity in 2016.

Anode Capacity 2016

Zone # Smelters
(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

@CochilcoChile Source: Wood Mackenzie (2016), World Metal Statistics (20016)

 SMELTING TECHNOLOGIES

24 Bath 23 Flash 7 mixed 3 other

smelters smelters smelters smelters

@CochilcoChile Source: Wood Mackenzie (2016)

 CHANGING PREFERENCES

• Until 2000’s flash smelting technology represent most of the

smelting preferences in new operations.

• Since, most of the new smelter prefer bath smelter, mostly

Ausmelt/Isasmelt® furnaces and Chinese reactors.
14 Smelting technologies through time 13

12

10 9
8 8
# Smelters

8 Bath
6
6 Flash
4 Mixed
4 3 3 3 Other
2

0
Before 1980 Between 1980 - 2000 After 2000

@CochilcoChile Source: Wood Mackenzie (2016), COCHILCO (2015)

 COST COMPARISON BY TECHNOLOGY

Smelting capacity and direct cash costs* Average cost: 26.6 c/lb
Range: 19-36 c/lb

OTHER capacity (3%)

MIXED capacity
FLASH capacity (44%) BATH capacity (36%) (17%)
Average cost:
Average cost: 15.2 c/lb Average cost: 18.8 c/lb 25.6 c/lb
Range: 9 to 31 c/lb Range: 9 to 45 c/lb Range: 13 to 68
c/lb

*Including labour, energy, maintenance, consumables and services.

@CochilcoChile Source: Wood Mackenzie (2015)

 BATH SMELTING COST DISPERSION

• Great differences between bath technologies.

• Teniente/Noranda technology appears to be

less competitive as other bath smelters.

60 • Chinese technology climb on better positions in

Teniente
50
the cost curve.

Ausmelt
Teniente
Teniente
Side blown
Direct cash cost (c/lb)

40

Ausmelt
Noranda
Isasmelt
Isasmelt
Teniente
Noranda
Ausmelt
Bottom blown
Chinese reactor

30

Isasmelt
Mitsubishi
Mitsubishi

Isasmelt

Isasmelt
Side blown

Ausmelt
Isasmelt

20

10

-
0 10 20 30 40 50 60 70 80 90 100
Bath smelting capacity (%)
Source: Wood Mackenzie (2016)
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 THE BUSINESS MODEL IMPLICATION

• Integrated smelters appears in the last position in terms of

costs.

• High-price cycle decrease competitiveness of integrated

smelters. Effort and investment to mines to increase
70 profitability.
60
Direct cost (c/lb)

50

40 Integrated smelters (mine to smelter)

30

20

10

0
0 3 6 9 12 15 18
Anode capacity [Mton]
Source: Wood Mackenzie (2016)
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 SMELTING COSTS

• Average direct cash cost was 19 c/lb un 2015. Almost 40% of

total capacity was above that cost.

• Energy (power and fuel) is responsable for more than one

third of avergae costs.

Direct Cash Costs

20
18
On-site Services (c/lb)
16 17%
22%
14
Consumables (c/lb) 12%
12
c/lb

10
Maintenance (c/lb)
8
6
Total Gross Energy (c/lb) 14%
4 35%
2
0
Labour (c/lb)
2015

Source: Wood Mackenzie (2016)

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04 COPPER CONCENTRATES MARKET
 COPPER CONCENTRATES MARKET

• XXXXXXXXXXXXXX

• XXXXXXXXXXX

@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)

 COPPER CONCENTRATES MARKET

• XXXXXXXXXXXXXX

• XXXXXXXXXXX

@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)

 COPPER CONCENTRATES MARKET

• XXXXXXXXXXXXXX

• XXXXXXXXXXX

@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)

 COPPER CONCENTRATES MARKET

• XXXXXXXXXXXXXX

• XXXXXXXXXXX

@CochilcoChile Source: Wood Mackenzie (2015), COCHILCO (2015)

05 CONCLUDING REMARKS
 CONCLUDING REMARKS

• New developments in China appears attractive but need

validation in western countries.

• New smelting capacity would tend to consider bath

technology. But not any.

• Change in technology is not the only driver. Non-integrated

smelters appears as a better bussiness model.

• Chile in the center of a major challenge: Teniente bath

smelting and integrated smelters are less competitive than
any other.
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THANK YOU!

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