{"id":516164,"date":"2010-04-05T10:51:00","date_gmt":"2010-04-05T14:51:00","guid":{"rendered":"http:\/\/www.businessinsider.com\/peak-copper-2010-4"},"modified":"2010-04-05T10:51:00","modified_gmt":"2010-04-05T14:51:00","slug":"amazing-presentation-on-the-end-of-the-copper-era","status":"publish","type":"post","link":"https:\/\/mereja.media\/index\/516164","title":{"rendered":"Amazing Presentation On The End Of The Copper Era"},"content":{"rendered":"

\"peak<\/a>(This is a guest post from The Oil Drum<\/a> by Jean Laherrère, a longtime head of exploration for TOTAL. As is his nature, Jean speaks more with graphs than words. This posts contains over 40 images amounting to 2 Mbytes of data; keep this in mind when proceeding.)<\/em><\/p>\n

Copper has been an important mineral in the world growth, in use for at least 10 000 years. The Bronze Age is well known for having replaced the Stone Age, and bronze is the alloy of copper and tin. Copper has the second highest electrical conductivity after silver. Its price went so high that copper cables are now often stolen, disturbing telephone and Internet communications. Copper is used in piping (water supply, refrigeration and air conditioning). Measured by weight, it is the third most important metal used by man after iron and aluminium (Radetzki 2009). Its use is challenged by new substitutes, but copper production will peak because it is a limited resource amounting to around 1400 Mt. Unlike oil, copper can be recycled, but developing countries’ needs are huge.<\/p>\n

What follows is an evaluation of world copper production, then an analysis country by country–there are many charts and graphs so that we may try to understand where we are with regard to future copper production.<\/p>\n

See The Coming Of Peak Copper ><\/a><\/h2>\n

Soon we will use all of Earth’s copper<\/h2>\n

\"Soon<\/div>\n

I found it fairly easy to model gold production both for the world and the main producers in my 2009 post The gold peak, easier to model than the oil peak<\/a> (part II<\/a>). In this post, I have tried to do the same for copper production.<\/p>\n

The best source of data is the USGS which provides complete time-series since 1900 for the US and the world. For other countries unfortunately, I had to turn to individual annual reports (from 1932) where the scanned data is hard to read in old reports. The USGS should compile the country by country copper production data from the annual reports in one document like Porter and Edelstein did for the world and for the US: U.S. Geological Survey, in Kelly, T.D., and Matos, G.R. Historical statistics for mineral and material commodities in the United States<\/a>: U.S. Geological Survey Data Series 140.<\/p>\n

Since 1995, the USGS reports its annual remaining reserve estimate as USGS reserves and USGS reserve base. The cumulative production from 6000 years ago to 1900 is estimated at 17 Mt<\/a>. The world copper cumulative production can be easily modeled with a logistic curve for ultimates of 1200 Mt and 1600 Mt fitting the USGS estimates.<\/p>\n

<\/p>\n

Production will peak in a short time <\/h2>\n

\"Production<\/div>\n

For these two ultimates the annual production can also be easily model led and the peak seems to occur soon, despite (or because) the high price increase since 2000. Yet the copper price today is cheaper than in 1900 when reported in 1998 dollars per kg (USGS data). The secondary production is small and decreasing to almost nothing!<\/p>\n

<\/p>\n

These eight countries have 60% of the resources<\/h2>\n

\"These<\/div>\n

The eight main copper producers (Chile, US, Peru, Indonesia, China, Australia, Canada and Russia) have been studied and the synthesis is plotted on a single graph. These eight producers have an ultimate of 820 Mt that is about 60% of the world’s ultimate.<\/p>\n

<\/p>\n

Chile emerged as the key producer<\/h2>\n

\"Chile<\/div>\n

Gavin Mudd in Historical trends in base metal mining: back casting to understand the sustainability of mining[pdf!]<\/a>, a publication from 2009, shows annual copper production starting in 1840.<\/p>\n

<\/p>\n

International Copper Study Group (ICSG) appears to overstate the reserves<\/h2>\n

\"International<\/div>\n

The details for the eight main copper producers are presented in the following slides.<\/p>\n

World<\/strong><\/p>\n

The world primary production is less than the secondary production and both added less than the refined reported by the ICSG.<\/p>\n

<\/p>\n

1600 metric tons (Mt) is the high estimate for cumulative reserves<\/h2>\n

\"1600<\/div>\n

The Hubbert linearisation of production data – being the growth of production (or annual\/cumulative in %) versus cumulative production – is extrapolated with a linear trend with the aim of estimating the ultimate, but it works only if the cumulative production fits a logistic curve, when in reality there are often several cycles. The present plot for the world shows only a recent trend from 2000 onwards, which can be extrapolated towards 1600 Mt (present cumulative production plus USGS reserve base) but the previous declining trend (1975-1995) was pointing towards 1000 Mt.<\/p>\n

<\/p>\n

But copper reporting is sloppy. Russia has “not declined” in 15 years.<\/h2>\n

\"But<\/div>\n

The best approach is to rely on the geological inventory of the world potential estimated by the USGS, based on the study of known discoveries and possible yet to find. The USGS does not give a good and precise definition of its estimates reported as reserves and reserve base!<\/p>\n

Contrary to the obsolete SEC rules for oil, forbidding reporting of probable reserves (now changed in 2010) the SEC rules for minerals (industry guide 7) allow to report proved and probable. The USGS only changes its data on copper reserves from time to time, when it shows the remaining discovered reserves, but it should be decreased when production isn’t matched by new discovery. Only US and Canada reserves have decreased!<\/p>\n

The reserves reported by the USGS since 1995 show a poor evolution when plotted in a log scale.<\/p>\n

<\/p>\n

<\/h2>\n

\"<\/div>\n

This poor evolution, such as for Russia with no change during 15 years, means that their estimate lacks good data!<\/p>\n

Geoscience Australia in their 2009 report [pdf!]<\/a> use a more precise definition of resources and report Economic Demonstrated Resources (EDR) for Australia and the world at the end 2008 being 78 Mt and 603 Mt respectively. In its turn the USGS reserves stand at 24 Mt and 540 Mt and the USGS reserve base amounts to 43 Mt and 1000 Mt. USGS reserves look pessimistic compared to Geoscience Australia EDR. The reserve base looks similar, but there should be an upper limit.<\/p>\n

<\/p>\n

It is difficult to estimate the the point at which production ceases to be economic<\/h2>\n

\"It<\/div>\n

In mining, economics depends mainly on the grade of the ore and it is important to plot the evolution with time. But my data is not good enough. Gavin Mudd (2009) has a graph showing the decline of the ore grades for the world, US, Australia and Canada, all declining below 1% in 2008. It is difficult to estimate the the point at which production ceases to be economic.<\/p>\n

<\/p>\n

America estimates reserves at a high percentage of reserve base — that means we are very optimistic in the amount it is feasible to recover<\/h2>\n

\"America<\/div>\n

United States<\/strong><\/p>\n

The cumulative US copper discovery (starting in 1545) from USGS 98-206A is 350 Mt at the end of 1998 and seems very optimistic compared to the USGS reserve base (around 200 Mt with cumulative production).<\/p>\n

The cumulative production in 1900 is assumed to be around 6 Mt and it is at 129 Mt at end 2008. We have taken 200 Mt as the ultimate production.<\/p>\n

<\/p>\n

We can see that the U.S. has 200Mt<\/h2>\n

\"We<\/div>\n

The Hubbert linearisation of production is more reliable, having passed peak, trending towards 200 Mt.<\/p>\n

<\/p>\n

The US annual production of copper is increasing chaotically from 1900 to a peak in 1998 at 2.1 Mt, and drops drastically to 1.2 Mt in 2005, despite a sharp increase in price!<\/h2>\n

\"The<\/div>\n

<\/p>\n

The USGS has almost doubled Chile’s copper reserves from 1995 to 2009.<\/h2>\n

\"The<\/div>\n

Chile<\/strong><\/p>\n


<\/strong><\/p>\n

<\/p>\n

Chile probably has 275Mt<\/h2>\n

\"Chile<\/div>\n

We have model led for an ultimate of 250 Mt because the Hubbert linearisation since 1999 trends towards such value, but also 300 Mt, guessing that 275 Mt is not a bad value.<\/p>\n

<\/p>\n

Chile copper production has peaked in 2007.<\/h2>\n

\"Chile<\/div>\n

<\/p>\n

Peru has 100 Mt<\/h2>\n

\"Peru<\/div>\n

Peru<\/strong><\/p>\n

Like for Chile, the USGS has doubled its reserves estimate, but in 2008, from 30 to 60 Mt.
We guess that the ultimate is around 100 Mt.<\/p>\n

<\/p>\n

But it is hard to estimate the peak for Peru<\/h2>\n

\"But<\/div>\n

The Hubbert linearisation is hopeless, being far from peak.<\/p>\n

<\/p>\n

Peru’s production will peak around 2025<\/h2>\n

\"Peru's<\/div>\n

For an ultimate of 100 Mt, Peru’s copper production will peak around 2025 at 1.7 Mt.<\/p>\n

<\/p>\n

China is also hard to plot<\/h2>\n

\"China<\/div>\n

China<\/strong><\/p>\n

Data for China is hard to check and the USGS has increased its reserves lately. We have taken an ultimate of 50 Mt.<\/p>\n

The Hubbert linearisation plot trends towards infinite!<\/p>\n

<\/p>\n

But China should peak in 2020<\/h2>\n

\"But<\/div>\n

The annual production should peak around 2020 at 1.2 Mt.<\/p>\n

<\/p>\n

Indonesia has around 45 Mt<\/h2>\n

\"Indonesia<\/div>\n

Indonesia<\/strong><\/p>\n

The USGS has sharply increased Indonesia’s reserves around 2000, but reduced them last year. We have taken an ultimate of 45 Mt.<\/p>\n

<\/p>\n

Once again, it is hard to estimate the peak<\/h2>\n

\"Once<\/div>\n

Hubbert linearisation plot is impossible to extrapolate.<\/p>\n

<\/p>\n

But Indonesia has already peaked<\/h2>\n

\"But<\/div>\n

Indonesia copper production has peaked in 2001 and will decline slowly until 2100.<\/p>\n

<\/p>\n

Australia has a better way of predicting reserves<\/h2>\n

\"Australia<\/div>\n

Australia<\/strong><\/p>\n

In the US, Wall Street (SEC) dominates reserves definition and it is good to see a country with a better scientific approach. Australia is a good choice to compare the USGS estimate with Geosciences Australia’s estimate [pdf!]<\/a>. Australia has a better reserve definition for minerals (EDR = Economic Demonstrated Resources).<\/p>\n

<\/p>\n

Check out the volatility<\/h2>\n

\"Check<\/div>\n

The sharp increase in Australia’s copper reserves comes mainly from the huge Olympic Dam field (copper and uranium) in South Australia. K.F.Bampton in Copper mining and treatment in South Australia [pdf!]<\/a> displays (in a logarithmic scale) the up and down copper production in South Australia starting around 1840.<\/p>\n

<\/p>\n

We see that Australia has 100 Mt<\/h2>\n

\"We<\/div>\n

Olympic Dam copper reserves are estimated at 32 Mt. Australia copper ultimate is estimated at 100 Mt.<\/p>\n

<\/p>\n

Volatility makes it hard to name the peak in Australia<\/h2>\n

\"Volatility<\/div>\n

The Hubbert linearisation is hard to extrapolate!<\/p>\n

<\/p>\n

Australia may peak in 2030<\/h2>\n

\"Australia<\/div>\n

For an ultimate of 100 Mt Australia’s copper production will peak around 2030 at 1.5 Mt.
But this optimistic future production increase is based only on geological constraints (reserves), yet above ground constraints (Economy) could dampen this forecast into a more chaotic behaviour!<\/p>\n

<\/p>\n

Canada has 50 Mt<\/h2>\n

\"Canada<\/div>\n

Canada<\/strong><\/p>\n

Canada is another good place to compare USGS and Natural Resources Canada (NRCan) approaches. NRCan reserves are more complete and slightly lower than the USGS reserves. From NRCan we estimate Canada’s copper ultimate at 50 Mt.<\/p>\n

<\/p>\n

At least Canada has a clear sense of reserves<\/h2>\n

\"At<\/div>\n

The Hubbert linearisation seems to be trending towards 50 Mt since 1970.<\/p>\n

<\/p>\n

Canada’s production will peak in five years.<\/h2>\n

\"Canada's<\/div>\n

Canada’s copper production has peaked in 1974 and will be producing at half peak around 2015.<\/p>\n

<\/p>\n

Russia has 60 Mt<\/h2>\n

\"Russia<\/div>\n

Russia<\/strong><\/p>\n

Russia is a difficult country to get reliable data from, because before the break up of the USSR the data was global and because the cold war data was very imprecise. We have assumed the copper production of Russia during the period of the FSU by taking a certain percentage of FSU data. The USGS reserves have not changed from 1995 to now, despite production, indicating the uncertainty of the estimate. The largest field is Udokan in Eastern Siberia, which displays some negative growth (from 20 to 14 Mt); it was sold in 2008 to be developed and is planned to be producing 0.5 Mt by 2016. We have assumed Russia’s copper ultimate to be 60 Mt.<\/p>\n

<\/p>\n

Their peak is hard to predict<\/h2>\n

\"Their<\/div>\n

The Hubbert linearisation could be extrapolated towards 60 Mt but it is not reliable!<\/p>\n

<\/p>\n

Russia’s peak is now<\/h2>\n

\"Russia's<\/div>\n

Russia’s copper production has dropped sharply with the break up of the FSU, and is likely peaking now.<\/p>\n

<\/p>\n

US consumption has likely peaked<\/h2>\n

\"US<\/div>\n

Copper consumption<\/strong><\/p>\n

The US copper consumption displays a chaotic constant increase from 1900 to 2000, and then a decline. The US consumption peak follows the US production peak.<\/p>\n

<\/p>\n

Did world consumption peak in 2006? Or will it continue to rise?<\/h2>\n

\"Did<\/div>\n

The world copper consumption (N. Brewster, Rio Tinto, Outlooks for commodity markets [pdf!]<\/a> displays a harmonious increase since 1850 but a possible peak in 2006, or just a bump! The real (in 2009 dollars) copper price displays an opposite trend!<\/p>\n

<\/p>\n

This is how we use copper<\/h2>\n

\"This<\/div>\n

It is hard to find a good graph of the distribution of the world copper use.
This Russian graph (from Copper industry: world production – Part I<\/a>) shows the large range of use by industry.<\/p>\n

<\/p>\n

<\/h2>\n

\"<\/div>\n

Another good graph on US copper use<\/a>.<\/p>\n

<\/p>\n

Copper is roughly 20 years behind gold<\/h2>\n

\"Copper<\/div>\n

Copper & gold & oil<\/strong><\/p>\n

Gold production has peaked in 2000 and copper will likely peak in 2020. Their growth was roughly parallel (with a 20 years gap).<\/p>\n

<\/p>\n

Like gold, the price is chaotic<\/h2>\n

\"Like<\/div>\n

Copper’s price in 1998 dollars has been chaotic with a sharp increase in 2006 (still, lower than in 1900!), but the gold price was also chaotic.<\/p>\n

<\/p>\n

Now copper pricing follows oil<\/h2>\n

\"Now<\/div>\n

Since 1980 the copper price has been following the oil price.<\/p>\n

<\/p>\n

The copper age is ending. The only question is when.<\/h2>\n

\"The<\/div>\n

Conclusions<\/strong><\/p>\n

Copper has been an important mineral in the world growth, in use for at least 10 000 years. The Bronze Age is well known for having replaced the Stone Age, and bronze is the alloy of copper and tin.<\/p>\n

Copper has the second highest electrical conductivity after silver. Its price went so high that copper cables are now often stolen, disturbing telephone and Internet communications. Copper is used in piping (water supply, refrigeration and air conditioning). Measured by weight, it is the third most important metal used by man after iron and aluminium (Radetzki 2009). Its use is challenged by new substitutes, but copper production will peak because it is a limited resource amounting to around 1400 Mt. Unlike oil, copper can be recycled, but developing countries’ needs are huge.<\/p>\n

Chile and China dominate the world’s copper production. But Chile’s production peaked in 2007 and China will likely peak around 2020. The future of copper is uncertain!<\/p>\n

The Copper peak<\/em> seems a real concern for many and there are several “Peak Copper” sites. The use of peak xxx<\/em> has become a fashion following the introduction of the term Peak oil<\/em> by Colin Campbell in 2001. Peak fat is described by Ugo Bardi.<\/p>\n

From Goggle (February 2010) peak oil<\/em> finds 2 080 000 quotes but oil peak<\/em> only 91 400 quotes; peak copper<\/em> finds 53 100 quotes, but copper peak<\/em> only 24 100 quotes.<\/p>\n

The Copper peak is not something new! The only question is when.<\/p>\n

<\/p>\n

Don’t miss…<\/h2>\n

\"Don't<\/p>\n

Image: MCA\/Universal Pictures<\/p>\n<\/div>\n

15 Depressing Facts About The Coming Water Crisis >><\/a><\/h2>\n

Join the conversation about this story »<\/a><\/p>\n

<\/img><\/a>
\n<\/img><\/a><\/p>\n

\n<\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a> <\/img><\/a>\n<\/div>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

(This is a guest post from The Oil Drum by Jean Laherrère, a longtime head of exploration for TOTAL. As is his nature, Jean speaks more with graphs than words. This posts contains over 40 images amounting to 2 Mbytes of data; keep this in mind when proceeding.) Copper has been an important mineral in […]<\/p>\n","protected":false},"author":3226,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"class_list":["post-516164","post","type-post","status-publish","format-standard","hentry","category-news"],"_links":{"self":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/516164","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/users\/3226"}],"replies":[{"embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/comments?post=516164"}],"version-history":[{"count":0,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/posts\/516164\/revisions"}],"wp:attachment":[{"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/media?parent=516164"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/categories?post=516164"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mereja.media\/index\/wp-json\/wp\/v2\/tags?post=516164"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}