Demand for copper is expected to keep rising over the coming years as the global economy electrifies and decarbonises. Miners are speeding up construction of their new copper projects, although they have continued to face coronavirus-related disruptions. After two consecutive years of declines, mainly due to the pandemic-related disruptions, particularly in South America, AME forecasts mined copper supply to grow 3.6% year on year to 21.15Mt in 2021 to and a further 7.3% in 2022 to 22.71Mt. Operations are expected to be less hindered by the pandemic, while new projects ramp up.
In 2021, producers are forecast to add 585kt
of mined copper capacity from new projects. The biggest capacity contribution
is expected to be Ivanhoe Mines and Zijin Mining’s Kamoa-Kakula mine in the DRC
which has started production from the Phase One 3.8Mtpa concentrator in June.
The Phase one is forecast to reach full capacity in 2022, producing 200ktpa of
copper in concentrate.
The 7.6Mtpa Phase two is under construction and is
expected to start production in the September Quarter of 2022, adding
additional 200ktpa of copper production. According to the Kamoa-Kakula PEA, the
project will expand by phases and finally reach the processing rate of 19Mtpa.
The 19Mtpa scenario would position Kamoa-Kakula as the world’s second-largest
copper mine, with peak production of more than 800ktpa.
The next three
largest new additions in 2021 are BHP’s 200ktpa Spence Growth Project
in Chile, Minsur’s 60%-owned 93ktpa Mina Justa in Peru and Cupric Canyon
Capital’s 62ktpa Khoemacau in Botswana.
BHP approved US$2.46bn capital
expenditure for the Spence Growth Option in August 2017 that will extend mine
life beyond 2070. This option involves open-pit mining of the hypogene resource
below the supergene reserve and construction of a 35Mtpa concentrator to
produce approximately 200ktpa of copper in concentrates.
Construction of Mina Justa started in the
September Quarter of 2018. Minsur aims produce 51ktpa of copper in concentrate
from a 6Mtpa concentrator and 42ktpa of copper cathode from a 12Mtpa oxide
SX/EW plant from 2021.
In Botswana, Khoemacau has produced the
first concentrate in July. It plans to ramp up to the full capacity of 155
-165ktpa of high-grade copper concentrate, containing about 60 - 65kt of
payable in 2022. Khoemacau is planning an expansion project which is expected
to increase production of payable in concentrate to +125ktpa.

2022 is expected to be an anomalously
strong year for new project capacity. Forecast new capacity in 2022 totals 1,220kt.
Major new projects include 300ktpa from Anglo American’s Quellaveco, 275ktpa
from Teck’s US$4.7bn Quebrada Blanca Phase Two Concentrator Project, 175ktpa
from Baikai Mining’s Udokan, 165ktpa from Tibet Julong’s Qulong and 91ktpa from
Zijin’s Timok.
The Quellaveco copper project in southern
Peru is jointly owned by Anglo American and Mitsubishi. The development of an
open-pit mine and 47Mtpa concentrating operation producing 300ktpa of copper
equivalent in the first ten years was approved in July 2018. Capital cost is
estimated to be US$5.3-5.5bn. Despite of the COVID-19-related slowdown in 2020,
the project is tracking against its original schedule, with the first
production still expected in 2022.
In February 2021, Anglo approved the
construction of a coarse particle recovery (CPR) plant at Quellaveco. This
breakthrough technology will initially allow retreatment of coarse particles from
flotation tailings to improve recoveries by ~3%. This investment will also
enable future throughput expansion which will bring a reduction in energy and
water consumption per unit of production. The CPR project will incur additional
capital expenditure of approximately US$130m.
As Quebrada Blanca’s leaching-SX/EW
operation approached the end of its mine life in 2018, Teck is developing the
hypogene reserve below the mined-out supergene ore which is now developed as
the Quebrada Blanca Phase 2 (QB2) project. The US$5.2bn QB2 project includes
expansion of the open pit, a 51Mtpa concentrator, desalination and concentrate
dewatering plants. Forecast output for the Phase 2 project is 275ktpa of copper
in concentrates during the first five years of an initial 25-year mine life.
Overall project progress has surpassed the half-way point in April 2021. Teck
aims to commence hypogene production in the second half of 2022.
Udokan is the largest copper deposit in
Russia, with approximately 27Mt of contained copper in Resources expected to
sustain operations until 2065. The mine is designed to extract 13.5Mtpa of ore
in Stage 1 producing 65ktpa of copper in concentrate and 110ktpa of copper
cathode. Stage 2 expansion will potentially increase its capacity to process 36Mtpa
of ore producing 150ktpa of copper in concentrate and 190ktpa of copper
cathode. Forecast capital cost is US$5.1bn. The start of construction was
announced in September 2018 with production expected to commence in 2022.
In China, Julong Copper’s Qulong Phase
One Project is set to start operation by the end of 2021. Copper production
from the Qulong Phase One is expected to be 165ktpa. The second phase is
designed start in seven to eight years after the phase one starts commercial
production, taking Qulong’s total copper production to 260ktpa.
In Serbia, Zijin has started trial
productions at its Čukaru Peki Mine—a part of its Timok mine. The Čukaru Peki’s
Upper Zone is designed to produce 91ktpa of copper in concentrate. Zijin plans
to complete the trial production stage before September this year. The Timok
mine is divided into the Upper Zone and the Lower Zone. It contains a very
large resource of 1.28Mt of contained copper at grade of 3% and 2.6Moz of
contained gold at grade of 1.91g/t in the Upper Zone and 14.3Mt of contained
copper at grade of 0.86% and 9.6Moz of gold at grade of 0.18g/t in the Lower
Zone.

AME anticipates 761kt of additional
capacity to be sourced from greenfield projects from 2023–2025. The largest new
project is expected to be Wafi-Golpu project in Papua New Guinea. The
Wafi-Golpu project is owned by a 50:50 joint venture between Harmony Gold and
Newcrest Mining. Permitting process of the project has been delayed because of
a legal matter between the provincial and national government.
The recent
statements by the prime minister of PNG indicate that Wafi-Golpu is priority
project ant it will be advanced within the existing legal parameters of PNG. The
joint venture partners are encouraged by these statements. Steady production at
Wafi-Golpu is estimated at 161kt of copper and 266koz of gold in concentrate
over an estimated 28-year mine life with potential to extend to 40 years.
The Rosemont copper project is located
50km southeast of Tucson, Arizona, in the US. The project was acquired by
Hudbay Minerals in 2014 and is at the permitting stage. An open-pit mine and
concentrator producing an average 102ktpa of copper in concentrate and 2ktpa of
molybdenum in concentrate over a 19-year mine life is planned.
Construction of
the Rosemont mine had initially been planned to commence by the end of 2019,
with first production by the end 2022. However, the US$1.9bn open-pit copper
project has been stalled since the US District Court for Arizona overturned US
Forest Service approvals in July 2019. Hudbay is in the appeal process with
decision expected for the second half of 2021. AME classifies the project
likelihood as probable as the planned operation is reasonably large scale with
expected low production costs.
