200 (26.07.18)



Kindly provided by our well-travelled readers around the world:

Fracking for Copper

    On your article on fracking for copper (BHP & Barrick Chase Ultimate Prize) BHP is no stranger to in-situ leaching: it used the technology at the San Manuel copper-moly-gold mine in Arizona, which they inherited when they acquired Magma Copper for $3.2bn in 1996.
     Production peaked a year later. There were over 1,200 wells producing 28 million lbs of copper at 45 cents per lb, but the mine closed when BHP halted its copper mines in the US, due to low prices in 2002. A scoping study was completed on a potential restart in 2015 but the copper in-situ leaching scenario is problematic.
    The production rate is unpredictable and the economics are diluted with drilling intensity. If the ore isn't sufficiently porous, fragmented, or acid-soluble you can end up with highly variable production rates. From a recovery perspective, the oxide copper resource grade could be 0.4% to 0.65%, but the acid-soluble portion could be only 0.3% to 0.35%, which sterilizes part of the metal.
    From an economics perspective, the upfront capital is low but the sustaining capital is very high, not dissimilar to shale gas, where you are sinking or connecting new wells constantly to maintain production. Perth, Australia.

Close the Gait

    In response to the letter on Paul Gait’s column (“Silicon Valley is a Derivative of Mining”), I disagree with the letter and have to agree with Mr Gait. Booking a notional profit is easy. The profitability of the narcotics industry is huge, but socially destructive. The profitability of casinos likewise, and here it is not just destructive, but purely redistributive.
The fact that some entity books a profit is exactly offset by an equal and opposite loss elsewhere in the system. But by digging-up resources, mining companies can generate capital. London, UK

Peter Munk's Marina

    I am now finally back from Porto Montenegro, the marina that Peter Munk built when he stopped going to Monte Carlo, and wanted to suggest you might launch a travel page of mining-related holiday destinations.
    It's really a beautiful part of the world. I'd definitely recommend going. The marina is probably the least picturesque part of the bay, but it's very well done. It was a naval base, that's pretty obvious from being there, it kind of looks a bit like a brownfield development and it's only about a third built, but the fuel is duty-free and it's the cheapest place to moor a $300m superyacht so you can leave her there for most of the year. What’s more, you can fly direct with EasyJet.
    What was very odd about being there was that everyone had heard of Peter Munk, which I couldn't get my head around. London, UK

Cashmere vs Alpaca

    Thank you for your article on copper in Mongolia and the Andes (“Cashmere or Alpaca?”), an interesting read.
    Our company has invested in Ecuador, and Mongolia is actually on our 'off-limits' list. A few reasons: the arbitration case between Khan Resources and Mongolia gave me a bad taste, Rio Tinto continues to have a hard time in the country and ongoing investigations continue.
    As per Ecuador, the government is more supportive of mining, three major mines are in construction, there is no mandatory ownership by the government and excellent infrastructure, including cheap power and fuel. $1.6bn of new investment has been announced since 2017, from some of the world's largest miners. It is also on the same time zone to Canada.
More money's going into copper exploration in Ecuador than Mongolia. Toronto, Canada



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