This year’s analysis of major copper discoveries has identified 224 copper deposits discovered over the 1990-2019 period, containing 1.08 billion tonnes of copper in reserves, resources and past production. Of the 224 copper deposits discovered, only 16 have been found in the past 10 years and only one since 2015. While there is still an abundance of undeveloped discoveries, most are smaller or low grade, with relatively few high-quality assets available for development.
A dismal decade
We have been tracking the lower trend of new major discoveries for some time, and conditions have been worsening rather than improving. Only 16 deposits were discovered over the past decade, containing 8%, or 81.3 Mt, of all copper contained in discoveries since 1990. While this underperformance is mostly the result of less exploration for new discoveries, a portion of the shortfall reflects the additional exploration still required at recent discoveries to expand the endowment above our major discovery threshold.
One factor contributing to the lack of major discoveries is a key shift in focus within the exploration sector. Since the 1990s, the industry has halved its share of copper budgets devoted to grassroots exploration, with the 36% allocated in 2019 near the low of 32% set in 2009. Companies are focusing more on established assets: juniors at projects with established resources and majors at and around their mine sites. Although some new major discoveries have been found at late-stage projects and existing mining camps, the probability of finding new major discoveries at such projects is lower than at riskier, early-stage prospects.
Quantity over quality
The bulk of the major discoveries made since 1990 are not yet in production; there are 144 deposits containing 620.4 Mt in various stages of assessment and development, compared to 80 deposits that are currently in production or have closed. This seems to be a significant pool of assets that could be developed. Only 16 of these undeveloped assets, however, have more than 10 Mt of copper in reserves and resources, enough to support a large copper mine over a mine life of at least 20 years, and only five of the 16 have a copper grade over 1%. A large majority of copper assets are small or have a copper grade below 0.5%.
While there are enough quality assets being developed to meet increasing demand over the near term, additional assets will be required for the medium term as existing operations ramp down or close. This means companies of all sizes need to invest more in grassroots exploration to discover the deposits that will be required to supply demand 20 years from now.