Economic of Copper Processing


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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.

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Economic of Copper Processing

  1. 1. Copyright © Wondershare SoftwareCopyright © Wondershare SoftwareEconomic of Copper ProcessingEconomic of Copper ProcessingBy : Pambudi Pajar Pratama BEng., MSc.
  2. 2. Economic of Milling and Smelter Processing Milling and Smelter Costs The balance between milling cost and metal losses iscrucial, particularly with low-grade ores. Most mills keep detailed accounts of operating andmaintenance costs, broken down into various sub-division,such as labor, supplies, energy, etc. for the various areasof the plant. The analysis is very useful in identifying high-cost areaswhere improvements in performances would be mostbeneficial. It is impossible to give typical operating costsfor milling operations, as these vary enormously from mineto 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 abreakdown of costs for 100,000 tpd copper concentrator. The balance between milling cost and metallurgicalefficiency is very critical on a concentrator treating an oreof low contained value, where it is crucial that milling costsbe as low as possible.
  3. 3. Economic of Milling Processing Milling Costs (Simplified of Breakdown Costs)Table 1. Costs per metric tonne milled for a 100,000 tpd copper concentratorItem Cost – US$ per tonne Percent CostCrushing 0.088 2.8Grinding 1.482 47.0Flotation 0.510 16.2Thickening 0.111 3.5Filtration 0.089 2.8Tailings 0.161 5.1Reagents 0.016 0.5Pipeline 0.045 1.4Water 0.252 8.0Laboratory 0.048 1.5Maintenance Support 0.026 0.8Management Support 0.052 1.6Administration 0.020 0.6Other expenses 0.254 8.1Total 3.154 100
  4. 4. 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 asLondon Metal Exchange (LME). The smelter, having processes the concentrates, disposesof the finished metal to consumers. The proportion of the “free market” price of the metalreceived by the mine is determined by the terms of thecontract negotiated between mine and smelter, and theseterms can vary considerably. Table 2 summarizes a typical smelter contract for thepurchase of copper concentrates. As is usual in many contracts, one assay unit is deductedfrom the concentrate assay in assessing the value of theconcentrates, and arsenic present in the concentrates ispenalized.
  5. 5. Economic of Smelter Processing Smelter Costs A typical smelter contract for copper concentrates issummarized in table 2.Table 2. Simplified copper smelter contractPaymentsCopper Deduct from the agreed copper assay 1 unit, and payfor the remainder at the LME price for higher-gradecopper.Silver If over 30 gpt pay for the agreed silver content at90% of the LME silver price.Gold If over 1 gpt pay for the agreed gold content at 95%of the LME gold price.DeductionsTreatment charge £ 30 per dry tonne of concentrates.Refining charge £ 115 per tonne of payable copper.
  6. 6. Economic of Smelter Processing Smelter Costs The concentrate assay is the prime importance indetermining the valuation, and the value of the assay isusually agreed on the result of independent sampling andassaying performed by the mine and smelter. The assays are compared and if the difference is no morethan an agreed value, the mean of the two results may betaken as the agreed assay. In the case of a greater difference, an “umpire” sample isassayed at an independent laboratory. This umpire assay may be used as the agreed assay, or themean of this assay and that of the party which is nearer tothe 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 brieflyexamining the economics of processing two base metals-gold and copper- whose fortunes have fluctuated over theyears for markedly different reasons.
  7. 7. Separation Efficiency (Economic Combination) Separation Efficiency Although the value of separation efficiency can be useful incomparing the performance of different operating conditionon selectivity, it takes no account of economic factors andas will become apparent, a high value of separationefficiency does not necessarily lead to the most economicreturn. Since the purpose of mineral processing is to increase theeconomic value of the ore, the importance of the recovery-grade relationship is in determining the most economiccombination of recovery and grade which will produce thegreatest financial return per tonne of ore treated in theplant. This will depend primarily on the current price of thevaluable product, transportation cost to the smelter,refinery, or other further treatment plant and the cost ofsuch further treatment, the latter being very dependent onthe grade of concentrate supplied.
  8. 8. Separation Efficiency (Economic Combination) Separation Efficiency A high grade concentrate will incur lower smelting costs,but the lower recovery means lower returns of finalproduct. A low grade concentrate may achieve greaterrecovery of the values, but incur greater smelting andtransportation cost due to the included gangue minerals. Also of importance are impurities in the concentrate whichmay be penalized by the smelter, although precious metalsmay produce a bonus. The net return from the smelter (NSR) can be calculatedfor any recovery-grade combination from: This summarized in Figure 1, which shows that the highestvalue of the NSR is produced at an optimum concentrategrade which is as close as possible to this target grade.
  9. 9. Separation Efficiency (Economic Combination) NSR vs Concentrate grade It is essential that the mill achieves a concentrate gradewhich is as close as possible to this target grade. Although the effect of moving slightly away from theoptimum may only be of the order of a few pence per tonnestreated, this can amount to very large financial losses,particularly on high-capacity plants treating thousands oftonnes per day (TPD).Figure 1.. Variation of payments and charges with concentrate grade
  10. 10. Separation Efficiency (Economic Combination) Effect of Metal Price on NSR vs Concentrate Grade Changes in metal price,smelter term, etc., obviouslyaffect the NSR-concentrategrade curve and the valueoptimum concentrate grade. For instance, if the metal priceincreases, then the optimumgrade will be lower, allowinghigher recoveries to beattained.Figure 2.. Effect of metal price onNSR-grade relationship
  11. 11. Separation Efficiency (Economic Combination) Other costs impact to NSR It is, of course, necessary to deduct the costs of mining andprocessing from the NSR in order to deduce the profitachieved by the mine. Some of these costs will be indirect, such as salaries,administration, research and development, medical andsafety, as well as direct costs, such as operating andmaintenance, supplies and energy. The breakdown of milling costs varies enormously from mineto mine, depending very much on the size and complexity ofthe operations. Mines with very large ore reserves tend to have very highthroughputs, and so although the capital outlay is higher, theoperating and labour costs tend to be much lower than thoseon smaller plants. Mining costs also vary enormously, and are very much higherfor underground than for open-pit operations.
  12. 12. Effective costs of Copper Processing Example of porphyry copper mine processing costs A typical smelter contract for copper concentrates issummarized in Table 2. Consider a porphyry copper minetreating an ore containing 0.6% Cu to produce aconcentrate containing 25% Cu, at 85% recovery. This is aconcentrate production of 20.4 kg/ton of ore treated.Therefore, at a copper price of £ 980/ton.
  13. 13. Effective costs of Copper Processing 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 thisfigure, it is apparent that this mine with very low operatingcosts can have any hope of profiting from such low-gradeoperations. Assuming a typical large open-pit mining costs of £ 1.25/ton ofore, a milling cost of £ 2/ton and indirect costs of £ 2/ton, themine will lose (for every tonne of ore treated):
  14. 14. Effective costs of Copper Processing The breakdown of costs and revenue is summarized in Figure 3.Figure 3.. Breakdown of costs and revenues for treatment of typicalporphyry copper ore (fmp = free market price)1 ton of mined ore (0.6% Cu)Contained value = £ 5.88 (fmp)MININGConcentrate (85% recovery)Contained value £ 5.00 (fmp)TailingContained value £ 0.88 (fmp)Transport, smelting &refiningEffective cost£ 5.00 - £ 3.22 = £ 1.78Payment of £ 3.22PROCESSINGCost £ 3.25(inc. other costs)Cost £ 2
  15. 15. Effective costs of Copper Processing As each tonne of ore produces 0.0051 t of copper inconcentrates, with a free market value of £ 5.00, so totalproduction costs of copper in concentrates : However, if the ore contains appreciable by-products, theeffective production costs are reduced. Assuming the concentrate contains 25 gpt of gold and 70gpt of silver, then The payment of gold, at LME price of £ 230/troy oz (1 troyoz = 31.1035), The payment of silver, at LME price of £ 4.5/troy oz,
  16. 16. Effective costs of Copper Processing 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 thusreduced to: By-products are thus extremely important in the economic ofcopper production, particularly for very low-grade operation. In this example, 42% of the mine’s revenue is from gold, coppercontributing 56%.
  17. 17. Effective costs of Copper Processing Since the profit margin involved in the processing of moderncopper ores is usually only small, continual efforts must be madeto try to reduce milling costs and metal losses. Even relative small increases in return per tonne can have asignificant effect, due to the very large tonnages that are oftentreated. There is, therefore, a constant search for improved flowsheetsand flotation reagents. Figure 3 above shows that in the example quoted, The contain value in the flotation tailings is £ 0.88/ton oftreated ore. The concentrate contains copper to the value of £ 5.00, butthe smelter payment is £ 3.22. Therefore, the mine realizes only 64.4% of the free market valueof copper in the concentrate. On this basis, the actual metal lossinto the tailings is only about £ 0.57/ton of ore. This is relativelysmall compared with milling costs and an increase in recovery of0.5% would raise the net smelter return by only £ 0.01.
  18. 18. Effective costs of Copper Processing Nevertheless, this can be significant; to a mine treating 50,000tpd, this is an increase in revenue of £ 500/day, which is extraprofit, providing that is not offset by any increased milling costs. For example, improved recovery may be possible by the use ofmore effective reagent or by the use of a more effective reagentor by increasing the dosage of an existing reagent, but if theincreased reagent cost is greater that the increased in smelterreturn, the action is not justified. Reagent costs are typicallyaround 10% of the milling costs on a large copper mine, butenergy costs may contribute well over 25% of these costs. Grinding is by far the greatest energy consumer and this processundoubtedly has the greatest influence on metallurgicalefficiency. Grinding is essential for liberation of the mineral in theassembly, but it should not be carried out any finer than isjustified economically. Not only is fine grinding energy intensive, but it also leads toincreased media costs.
  19. 19. Effective costs of Copper Processing Grinding steel often contributes as much as, if not more than,the total mill energy cost, and the quality of grinding mediumused often warrants special study. Grinding is by far the greatest energy consumer and thisprocess undoubtedly has the greatest influence onmetallurgical efficiency. Figure 4 shows the effect of thefineness of grind on NSR andgrinding costs foe a typical low-grade copper ore. Althoughflotation recovery, and hence NSR,increases with fineness of grind, itis evident that there is noeconomic benefit in grinding finerthan 105 microns. Even thisfineness will probably by beyondthe economic limit because of theadditional capital cost of thegrinding equipment required toachieve it.Figure 4.. Effect of fineness of grindon net smelter return and grindingcosts
  20. 20. Economic Efficiency It is evident from the foregoing that the metallurgicalsignificance of grade and recovery is of less importance than theeconomic consideration. It is apparent that a certain combination of grade and recoveryproduces the highest economic return under certain conditions ofmetal price, smelter term, etc. However, this metallurgical efficiency combination may notpromote the highest return if those conditions change. Economic efficiency compares the actual NSR per tonne of oremilled with the theoretical return, thus taking into account all thefinancial implications. The theoretical return is the maximum possible return that couldbe achieved, assuming “perfect milling”, i.e. complete separationof the valuable mineral into the concentrate, with all the ganguereporting to tailings. Using economic efficiency, plant efficiency can be compared evenduring periods of fluctuating market conditions.
  21. 21. Economic Efficiency Example the calculation of overall economic efficiency The following assay data was collected from a copper-zincconcentrator: Mass flow measurement showed that 2.6% of the feed weightreported to the copper concentrate, and 3.5% to the zincconcentrate. Calculate the overall economic efficiency under the followingsimplified smelter terms:Feed 0.7% Copper 1.94% ZincCu Concentrate 24.6% Copper 3.40% ZincZn Concentrate 0.4% Copper 39.7% ZincCopperCopper price £ 1,000/tonSmelter payment 90% of Cu contentSmelter treatment charge £ 30/ton of concentrateTransport cost £ 20/ton of concentrate
  22. 22. Economic EfficiencyZincZinc price £ 400/tonSmelter payment 85% of Cu contentSmelter treatment charge £ 100/ton of concentrateTransport cost £ 20/ton of concentrate
  23. 23. Economic Efficiency
  24. 24. Economic Efficiency
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