INTERVIEW: Boliden to fully restore cathode production by 2027

Nordics-focused base metals producer Boliden expects to fully restore its copper cathode production in 2027 once a new cellhouse at its Ronnskar smelter due to start up at the end of this year ramps up to full 230,000 mt/year capacity, Daniel Peltonen, president of Boliden's smelting operations, told Platts, part of S&P Global Energy, in an interview, adding that the global concentrate shortage, while presenting challenges, has not affected the company's output.

The Ronnskar smelter in Vasterbotten county, northern Sweden, has been producing only anodes since it lost its cellhouse in a fire in mid-2023; the smelter is capable of producing over 250,000 mt/year of anodes.

To offset the temporary loss, Boliden has been using spare capacity at the Harjavalta smelter in Finland, which produces copper cathode and an intermediate nickel product -- matte. Cathode capacity at the Finnish smelter is being utilized to its maximum of 160,000-170,000 mt/year, Peltonen said.

Boliden expects stable copper production both in 2026 and 2027, but cathode tonnage will be far higher in 2027 and the company will no longer sell anodes as all of them will be converted into cathodes. Consequently it expects cathode output to be restored to 350,000 mt or more in 2027, up from 150,000 mt this year.

Nautanen to be satellite mine

The global copper concentrate market has slipped into a structural deficit over the last two years amid smelter capacity expansions and a lack of matching new mining projects as well as unexpected mine closures -- something that has been a concern for Boliden.

The company has longer term plans and last year was looking to apply for a concession for the major Laver copper deposit in Norrbotten, Sweden, where its major Aitik mine is located. However, that project would only come on stream far in the future and the company remains interested in increasing its backward integration sooner rather than later, according to Peltonen.

Last year, it completed the acquisition of the two zinc mines -- Somincor in Portugal and Zinkgruvan in Sweden -- both of which also contain copper. That pushed Boliden's self-sufficiency in copper concentrate from 30% to 40%. More recently, in May, the company secured a mining concession for the Nautanen copper deposit, only 15 km away from its flagship Aitik mine. The deposit will be developed as an underground satellite operation, utilizing existing infrastructure at the Aitik site.

E-waste should stay in EU

For now, however, the company's reliance on third-party concentrate remains high. To offset that dependency, Boliden tries to use as much copper scrap and electronic waste as possible, but that substitution has its limits due to several complexities, including pre-treatment material separation, the formation of viscous, high-melting-point slags, and even hazardous emissions and accelerated refractory wear.

"You cannot run a smelting unit only on e-waste. In our installation, we have to have a mix of electronic scrap and copper matte or concentrate because it is about energy balance and other things, like plastic content of e-waste, to take into account," he said.

"We don't have refining capacity for more than 230,000 tons, so it's always a balance of what you have and how you do the mixing, but what is important for us, for the whole EU, is that electronic scrap should not be exported. It should stay here because it is a valuable raw material, and we should not be shortsighted and give it away," Peltonen said.

Despite concentrate shortages and unprotected e-waste exports, Boliden's production has not been affected. "We have been able to keep our smelters fully running. But of course, the terms are not good, and we have to adapt to that with different measures, essentially internal costs," he said.

"We buy the raw material on the global market with global price setting, and also the metal itself is sold with the global price setting. The only thing that we can affect is really how well we do our work, how good our recovery levels are and what our cost level is," he said.

Aitik grades to improve

On costs, Peltonen noted that the Aitik operation has been "in a low-grade situation for a couple of years now" but is about to turn the corner.

"The life of mine remains pretty long, but the copper grades are currently very low, below 0.18% or something like that. And if you are in a low-grade period, you get less concentrate," he said.

But grades are expected to improve very soon, year by year, as operations expand into more copper-rich areas of the mine, according to Peltonen.

One advantage for Boliden in the current environment for concentrate and other consumables is that it does not procure sulfur externally, as it is already contained in the ore or concentrate it produces and buys.

Since the end of February when the conflict in the Middle East broke out, the price of sulfur has more than tripled to over $1,000/mt, presenting a cost and availability risk for the industry.

"This [sulfur self-sufficiency] is, of course, something very valuable now for us," said Peltonen. "Some concentrates contain less sulfur and others more, and we have to mix the different concentrates from internal and external mines in a way that we get a good blend, because sulfur is the fuel for having self-sustaining combustion in flash furnaces," he said, adding that pyrometallurgical smelting processes yields about one ton of byproduct sulfuric acid for every ton of copper concentrate processed.

Miners reap benefits of price rally

Pressured by concentrate and now also sulfur tightness, copper prices have gone up quite sharply too, with the LME three-month benchmark rising almost 14% from the start of the year to a mid-May peak of $14,150/mt, although it had cooled to $13,378/mt by June 26.

"The copper price makes the miners very happy," Peltonen said, underscoring that, unlike mining companies, smelters do not automatically get rich when metal prices rise due to their different economics and more complex profit structure. A higher copper price also means externally sourced copper concentrate becomes more expensive for smelters.

Peltonen noted that smelters earn money from treatment and refining charges, free metal, byproduct credits such as sulfuric acid, and metal premiums, but of these revenue items, TC/RCs are at record lows, even negative in the spot market, and so the copper price rally has mostly boosted the free metal part, he said.