Television

EXPLAINER: How drilling results make the grade — Copper and Zinc

Mining

January 5, 2022 | Special Report

SHARE

• 
• 
• 
• 

In the second episode of our new series on drilling grades we look at two more of 2022’s key base metals, Mr Copper and Mrs Zinc.

Let’s dig in.

Two fundamental factors to keep in mind when reading a company’s drilling results are:

1. What is an average grade across the sector?
2. What is the price context of the metal?

Unlike precious metals, base metal grades are expressed in terms of percentages (%) instead of grams per tonne (g/t).

But there’s more to consider than just grades when assessing the viability of a project.

Grades versus scale and prices

Operating copper mines currently have an average grade of 0.53% and the current copper price is about A$13,341 per tonne (at the time of writing).

In global zinc mining, grades of 2.5-3% are considered medium grade and the price is approximately A$4731 per tonne.

Copper projects under development now have an average grade of 0.39% or less, according to Mining Intelligence.

Copper, green energy and some geopolitics

The declining grade profile at projects across the globe comes as analysts forecast copper demand doubling in the next 30 years thanks to copper’s role in cleaner energy sources and electric vehicles.

This scenario underpins a favourable and rising price environment, but also the reality that a higher incentive price is needed for the development of new projects.

Such a scenario makes existing mines more profitable while supporting the development of some currently uneconomic projects.