SIC 1021 Copper Ores
SIC 1021
This category includes establishments primarily engaged in mining, milling, or otherwise preparing copper ores. This industry also includes establishments primarily engaged in the recovery of copper concentrates by precipitation and leaching of copper ore.
212234
Copper Ore and Nickel Ore Mining
A global commodity business, copper mining and milling is subject to swings in both prices and production levels, depending on world markets and individual companies' operating strategies. World demand for copper has grown steadily since the late 1970s, but in the late 1990s ambitious copper producers—including many in Chile, the world's largest copper-producing country—ramped up new mining capacity faster than the market could absorb their production. In addition, economic weakness in Asia and Latin America in the late 1990s left global demand growth at a slower pace than some producers anticipated.
As a result, copper supplies ran heavy, and copper prices slumped by as much as 50 percent in the latter half of the 1990s, especially during 1998 and 1999, reaching Great Depression-era levels when adjusted for inflation. Soft prices decimated copper companies' profits and triggered a frantic round of consolidation among major producers. Continuing into the 2000s, soft prices, weak demand, and rising inventories remained problematic for the industry.
The United States fell to the world's third largest copper producer and a net importer of copper, obtaining a record 37 percent of refined copper from abroad at the turn of the twenty-first century. In 2004 U.S. mines turned out 1.16 million metric tons of recoverable copper valued at $3.4 billion, representing approximately 11 percent of world production (13.2 million metric tons). The U.S. Geological Survey estimated net U.S. consumption of unmanufactured copper materials in 2004 at more than 2.6 million metric tons, along with 225 billion metric tons of copper recovered from copper-base scrap.
Building construction represented 48 percent of copper and copper alloy products in 2004. Transportation equipment accounted for 10 percent, as well as industrial machinery and equipment. Electric and electronic products totaled 11 percent, and consumer and general product mix constituted 21 percent.
Copper extraction and processing involves several stages, which vary with the kind of ore and technology being used. Integrated producers are involved in all stages, including ones that are considered outside the scope of this industry classification. Also, because copper ores are recovered along with a variety of other useful minerals, most copper-mining companies also have side businesses to handle other metals, such as gold, silver, and molybdenum.
Copper ore, which may be mined underground or, more commonly, at the surface in an open pit, is unearthed with digging equipment or explosive devices. The material is then transported by conveyor or by truck to a mill or plant, often on site, that crushes and grinds the ore into a powder.
In the next step, called concentrating, the powder is mixed with water and chemicals, which cause copper sulfide ores to float to the top, where they may be separated from some of the other minerals. Once the copper is skimmed, the copper mix, or concentrate, may be piped as slurry to another site for additional processing, or it may be dried and transported via truck or ship.
Meanwhile, the leftover liquid, known as tailings, can be processed further for copper oxide ores and other useful minerals. This material can be broken down further by treating with acid, known as leaching, and applying one of several methods to separate the copper from other substances.
Concentrate must be purified and refined before it yields copper that is ready for manufacturing applications. While for classification purposes this advanced processing is the domain of SIC 3331: Primary Smelting and Refining of Copper, in practice many of the major copper-mining firms are involved to some degree in these activities. Many mines have smelters or refineries on site.
Large copper producers typically sell their products in two ways: by contract and on-the-spot markets. Contracts are usually for one to three years and may involve selling copper ores or concentrates at various points in the production process, depending on the client's needs and capabilities. While many manufacturers require copper in a state that's ready to go directly into their products, and thus purchase it as refined cathode, rod, or wire, others buy concentrate and do their own smelting, refining, shaping, and so forth.
Copper also is sold on the open market. Major world markets, such as the London Metal Exchange, provide a large and efficient medium for financial transactions relating to the copper trade. Transactions may take the form of spot contracts, in which the parties arrange for the physical transfer of copper or futures/options contracts, which are market instruments that enable financial hedging against adverse price movements, but no physical exchange occurs. A variety of...
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