The balance between milling cost and metal losses is crucial, particularly with low-grade ores. Most mills keep detailed accounts of operating and maintenance costs, broken down into various sub-division, such as labor, supplies, energy, etc. for the various areas of the plant.

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Economic of Copper ProcessingEconomic of Copper Processing
By : Pambudi Pajar Pratama BEng., MSc.

2. Economic of Milling and Smelter Processing
 Milling and Smelter Costs
 The balance between milling cost and metal losses is
crucial, particularly with low-grade ores.
 Most mills keep detailed accounts of operating and
maintenance costs, broken down into various sub-division,
such as labor, supplies, energy, etc. for the various areas
of the plant.
 The analysis is very useful in identifying high-cost areas
where improvements in performances would be most
beneficial. It is impossible to give typical operating costs
for milling operations, as these vary enormously from mine
to mine and particularly from country to country,
depending on local costs of energy, labor, water, supplies,
etc. Table 1 shows a simplified example of such a
breakdown of costs for 100,000 tpd copper concentrator.
 The balance between milling cost and metallurgical
efficiency is very critical on a concentrator treating an ore
of low contained value, where it is crucial that milling costs
be as low as possible.

3. Economic of Milling Processing
 Milling Costs (Simplified of Breakdown Costs)
Table 1. Costs per metric tonne milled for a 100,000 tpd copper concentrator
Item Cost – US$ per tonne Percent Cost
Crushing 0.088 2.8
Grinding 1.482 47.0
Flotation 0.510 16.2
Thickening 0.111 3.5
Filtration 0.089 2.8
Tailings 0.161 5.1
Reagents 0.016 0.5
Pipeline 0.045 1.4
Water 0.252 8.0
Laboratory 0.048 1.5
Maintenance Support 0.026 0.8
Management Support 0.052 1.6
Administration 0.020 0.6
Other expenses 0.254 8.1
Total 3.154 100

4. Economic of Smelter Processing
 Smelter Costs
 Such smelter contract are usually fairly complex.
 Concentrates are sold under contract to “custom smelters”
at prices based on quotations on metal markets such as
London Metal Exchange (LME).
 The smelter, having processes the concentrates, disposes
of the finished metal to consumers.
 The proportion of the “free market” price of the metal
received by the mine is determined by the terms of the
contract negotiated between mine and smelter, and these
terms can vary considerably.
 Table 2 summarizes a typical smelter contract for the
purchase of copper concentrates.
 As is usual in many contracts, one assay unit is deducted
from the concentrate assay in assessing the value of the
concentrates, and arsenic present in the concentrates is
penalized.

5. Economic of Smelter Processing
 Smelter Costs
 A typical smelter contract for copper concentrates is
summarized in table 2.
Table 2. Simplified copper smelter contract
Payments
Copper Deduct from the agreed copper assay 1 unit, and pay
for the remainder at the LME price for higher-grade
copper.
Silver If over 30 gpt pay for the agreed silver content at
90% of the LME silver price.
Gold If over 1 gpt pay for the agreed gold content at 95%
of the LME gold price.
Deductions
Treatment charge £ 30 per dry tonne of concentrates.
Refining charge £ 115 per tonne of payable copper.

6. Economic of Smelter Processing
 Smelter Costs
 The concentrate assay is the prime importance in
determining the valuation, and the value of the assay is
usually agreed on the result of independent sampling and
assaying performed by the mine and smelter.
 The assays are compared and if the difference is no more
than an agreed value, the mean of the two results may be
taken as the agreed assay.
 In the case of a greater difference, an “umpire” sample is
assayed at an independent laboratory.
 This umpire assay may be used as the agreed assay, or the
mean of this assay and that of the party which is nearer to
the umpire assay may be chosen.
 The use of smelter contracts and the importance of the by-
products and changing metal prices, can be seen by briefly
examining the economics of processing two base metals
-gold and copper- whose fortunes have fluctuated over the
years for markedly different reasons.

7. Separation Efficiency (Economic Combination)
 Separation Efficiency
 Although the value of separation efficiency can be useful in
comparing the performance of different operating condition
on selectivity, it takes no account of economic factors and
as will become apparent, a high value of separation
efficiency does not necessarily lead to the most economic
return.
 Since the purpose of mineral processing is to increase the
economic value of the ore, the importance of the recovery-
grade relationship is in determining the most economic
combination of recovery and grade which will produce the
greatest financial return per tonne of ore treated in the
plant.
 This will depend primarily on the current price of the
valuable product, transportation cost to the smelter,
refinery, or other further treatment plant and the cost of
such further treatment, the latter being very dependent on
the grade of concentrate supplied.

8. Separation Efficiency (Economic Combination)
 Separation Efficiency
 A high grade concentrate will incur lower smelting costs,
but the lower recovery means lower returns of final
product. A low grade concentrate may achieve greater
recovery of the values, but incur greater smelting and
transportation cost due to the included gangue minerals.
 Also of importance are impurities in the concentrate which
may be penalized by the smelter, although precious metals
may produce a bonus.
 The net return from the smelter (NSR) can be calculated
for any recovery-grade combination from:
 This summarized in Figure 1, which shows that the highest
value of the NSR is produced at an optimum concentrate
grade which is as close as possible to this target grade.

9. Separation Efficiency (Economic Combination)
 NSR vs Concentrate grade
 It is essential that the mill achieves a concentrate grade
which is as close as possible to this target grade.
 Although the effect of moving slightly away from the
optimum may only be of the order of a few pence per tonnes
treated, this can amount to very large financial losses,
particularly on high-capacity plants treating thousands of
tonnes per day (TPD).
Figure 1.. Variation of payments and charges with concentrate grade

10. Separation Efficiency (Economic Combination)
 Effect of Metal Price on NSR vs Concentrate Grade
 Changes in metal price,
smelter term, etc., obviously
affect the NSR-concentrate
grade curve and the value
optimum concentrate grade.
 For instance, if the metal price
increases, then the optimum
grade will be lower, allowing
higher recoveries to be
attained.
Figure 2.. Effect of metal price on
NSR-grade relationship

11. Separation Efficiency (Economic Combination)
 Other costs impact to NSR
 It is, of course, necessary to deduct the costs of mining and
processing from the NSR in order to deduce the profit
achieved by the mine.
 Some of these costs will be indirect, such as salaries,
administration, research and development, medical and
safety, as well as direct costs, such as operating and
maintenance, supplies and energy.
 The breakdown of milling costs varies enormously from mine
to mine, depending very much on the size and complexity of
the operations.
 Mines with very large ore reserves tend to have very high
throughputs, and so although the capital outlay is higher, the
operating and labour costs tend to be much lower than those
on smaller plants.
 Mining costs also vary enormously, and are very much higher
for underground than for open-pit operations.

12. Effective costs of Copper Processing
 Example of porphyry copper mine processing costs
 A typical smelter contract for copper concentrates is
summarized in Table 2. Consider a porphyry copper mine
treating an ore containing 0.6% Cu to produce a
concentrate containing 25% Cu, at 85% recovery. This is a
concentrate production of 20.4 kg/ton of ore treated.
Therefore, at a copper price of £ 980/ton.

13. Effective costs of Copper Processing
 Example of porphyry copper mine processing costs
 Assuming a freight cost of £ 20/ton of concentrate,
 The total deduction are £ (0.61 + 0.56 + 0.41) = £ 1.58
 The NSR per tonne of ore treated is thus
 As mining, milling, and other costs must be deducted from this
figure, it is apparent that this mine with very low operating
costs can have any hope of profiting from such low-grade
operations.
 Assuming a typical large open-pit mining costs of £ 1.25/ton of
ore, a milling cost of £ 2/ton and indirect costs of £ 2/ton, the
mine will lose (for every tonne of ore treated):

14. Effective costs of Copper Processing
 The breakdown of costs and revenue is summarized in Figure 3.
Figure 3.. Breakdown of costs and revenues for treatment of typical
porphyry copper ore (fmp = free market price)
1 ton of mined ore (0.6% Cu)
Contained value = £ 5.88 (fmp)
MINING
Concentrate (85% recovery)
Contained value £ 5.00 (fmp)
Tailing
Contained value £ 0.88 (fmp)
Transport, smelting &
refining
Effective cost
£ 5.00 - £ 3.22 = £ 1.78
Payment of £ 3.22
PROCESSING
Cost £ 3.25
(inc. other costs)
Cost £ 2

15. Effective costs of Copper Processing
 As each tonne of ore produces 0.0051 t of copper in
concentrates, with a free market value of £ 5.00, so total
production costs of copper in concentrates :
 However, if the ore contains appreciable by-products, the
effective production costs are reduced.
 Assuming the concentrate contains 25 gpt of gold and 70
gpt of silver, then
 The payment of gold, at LME price of £ 230/troy oz (1 troy
oz = 31.1035),
 The payment of silver, at LME price of £ 4.5/troy oz,

16. Effective costs of Copper Processing
 The NSR is thus increased to: (per tonne of ore treated)
 And the mine makes a profit of (per tonne of ore treated)
 The Effective Production Cost (EPC) of 1 tonne of copper is thus
reduced to:
 By-products are thus extremely important in the economic of
copper production, particularly for very low-grade operation.
 In this example, 42% of the mine’s revenue is from gold, copper
contributing 56%.

17. Effective costs of Copper Processing
 Since the profit margin involved in the processing of modern
copper ores is usually only small, continual efforts must be made
to try to reduce milling costs and metal losses.
 Even relative small increases in return per tonne can have a
significant effect, due to the very large tonnages that are often
treated.
 There is, therefore, a constant search for improved flowsheets
and flotation reagents.
 Figure 3 above shows that in the example quoted,
 The contain value in the flotation tailings is £ 0.88/ton of
treated ore.
 The concentrate contains copper to the value of £ 5.00, but
the smelter payment is £ 3.22.
 Therefore, the mine realizes only 64.4% of the free market value
of copper in the concentrate. On this basis, the actual metal loss
into the tailings is only about £ 0.57/ton of ore. This is relatively
small compared with milling costs and an increase in recovery of
0.5% would raise the net smelter return by only £ 0.01.

18. Effective costs of Copper Processing
 Nevertheless, this can be significant; to a mine treating 50,000
tpd, this is an increase in revenue of £ 500/day, which is extra
profit, providing that is not offset by any increased milling costs.
 For example, improved recovery may be possible by the use of
more effective reagent or by the use of a more effective reagent
or by increasing the dosage of an existing reagent, but if the
increased reagent cost is greater that the increased in smelter
return, the action is not justified. Reagent costs are typically
around 10% of the milling costs on a large copper mine, but
energy costs may contribute well over 25% of these costs.
 Grinding is by far the greatest energy consumer and this process
undoubtedly has the greatest influence on metallurgical
efficiency.
 Grinding is essential for liberation of the mineral in the
assembly, but it should not be carried out any finer than is
justified economically.
 Not only is fine grinding energy intensive, but it also leads to
increased media costs.

19. Effective costs of Copper Processing
 Grinding steel often contributes as much as, if not more than,
the total mill energy cost, and the quality of grinding medium
used often warrants special study.
 Grinding is by far the greatest energy consumer and this
process undoubtedly has the greatest influence on
metallurgical efficiency.
 Figure 4 shows the effect of the
fineness of grind on NSR and
grinding costs foe a typical low-
grade copper ore. Although
flotation recovery, and hence NSR,
increases with fineness of grind, it
is evident that there is no
economic benefit in grinding finer
than 105 microns. Even this
fineness will probably by beyond
the economic limit because of the
additional capital cost of the
grinding equipment required to
achieve it.
Figure 4.. Effect of fineness of grind
on net smelter return and grinding
costs

20. Economic Efficiency
 It is evident from the foregoing that the metallurgical
significance of grade and recovery is of less importance than the
economic consideration.
 It is apparent that a certain combination of grade and recovery
produces the highest economic return under certain conditions of
metal price, smelter term, etc.
 However, this metallurgical efficiency combination may not
promote the highest return if those conditions change.
 Economic efficiency compares the actual NSR per tonne of ore
milled with the theoretical return, thus taking into account all the
financial implications.
 The theoretical return is the maximum possible return that could
be achieved, assuming “perfect milling”, i.e. complete separation
of the valuable mineral into the concentrate, with all the gangue
reporting to tailings.
 Using economic efficiency, plant efficiency can be compared even
during periods of fluctuating market conditions.

21. Economic Efficiency
 Example the calculation of overall economic efficiency
 The following assay data was collected from a copper-zinc
concentrator:
 Mass flow measurement showed that 2.6% of the feed weight
reported to the copper concentrate, and 3.5% to the zinc
concentrate.
 Calculate the overall economic efficiency under the following
simplified smelter terms:
Feed 0.7% Copper 1.94% Zinc
Cu Concentrate 24.6% Copper 3.40% Zinc
Zn Concentrate 0.4% Copper 39.7% Zinc
Copper
Copper price £ 1,000/ton
Smelter payment 90% of Cu content
Smelter treatment charge £ 30/ton of concentrate
Transport cost £ 20/ton of concentrate

22. Economic Efficiency
Zinc
Zinc price £ 400/ton
Smelter payment 85% of Cu content
Smelter treatment charge £ 100/ton of concentrate
Transport cost £ 20/ton of concentrate

23. Economic Efficiency

24. Economic Efficiency

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