# From ground to market: What the ground offers: deposits, grades and waste Source page: https://www.materialinsights.org/learn/commodities/from-ground-to-market/p1/ [Understanding Commodities](https://www.materialinsights.org/learn/commodities/) / [Module 2: From ground to market](https://www.materialinsights.org/learn/commodities/from-ground-to-market/) Part 1 of 5 ## What the ground offers: deposits, grades and waste Every mined commodity starts as a geological accident: a place where nature pushed an element far above its average in the crust. The kind of accident decides most of what follows: how the ore is mined, how much waste is moved, how much energy is spent and which by-products come along. This part covers the main deposit types, the long fall in grades and the waste that follows. ### 1.1 Deposit type, not just tonnage, sets the economics of a mine An ore deposit is a local concentration of an element far above its crustal average. Tilton, summarising the geologist Brian Skinner, explains why that matters. Scarce metals such as copper, zinc and nickel exist in two forms. Most of their atoms are scattered through ordinary silicate rock by atomic substitution, at levels below about 0.1 to 0.01 per cent. Only a tiny share, perhaps 0.001 to 0.01 per cent of the total, has been gathered by hot fluids into separate ore minerals such as chalcopyrite. Each deposit type has a typical shape and grade. Porphyry copper deposits are huge, low-grade bodies formed above cooling magma; Tilton and Guzmán note that porphyries of about 0.4 per cent copper are fairly abundant and often carry molybdenum and gold. Sediment-hosted copper, as in the Central African Copperbelt, also carries cobalt (USGS). Banded iron formations, Smil explains, are ancient seabed layers of silica and iron oxide, hundreds of metres thick and hundreds of kilometres long, which is why iron ore comes from vast open pits. Placers are sediments in which running water has sorted out heavy, durable grains: gold, tin, and the titanium minerals and zircon of heavy-mineral sands. Deposit type also fixes the by-products. Tilton and Guzmán separate a main product, whose price alone decides how much ore is mined, from co-products and by-products, whose prices do not. Nassar, Graedel and Harper found that 38 of the 62 metals they assessed come mostly as companions of a host metal. Their supply follows the host rather than their own price, which makes it price-inelastic. In the data #### Tonnes of rock per kilogram Pitron shows how thin the rarest concentrations are. Purifying a kilogram of vanadium takes about 8.5 tonnes of rock; cerium needs 16 tonnes, gallium 50 and lutetium 1,200. Gallium also shows the by-product logic: Tilton and Guzmán note that it comes largely as a by-product of bauxite. Open the Gallium tile. In 2024 China supplied about 99 per cent of primary output, an HHI near 9,700. That reflects less Chinese geology than China's 60 per cent share of world alumina refining in 2024 (USGS). - Tilton (2003), On Borrowed Time? · pdf pp. 78-80 - Tilton & Guzmán (2016), Mineral Economics and Policy · pdf pp. 66-67, 74 - Smil (2016), Still the Iron Age · pdf p. 123 - Nassar, Graedel & Harper (2015), Science Advances [web ↗](https://doi.org/10.1126/sciadv.1400180) · pdf p. 1 - Pitron (2020), The Rare Metals War · pdf p. 11 - USGS Mineral Commodity Summaries 2026, Bauxite and Alumina [web ↗](https://pubs.usgs.gov/publication/mcs2026) · World Alumina Refinery Production - USGS Mineral Commodity Summaries 2026, Cobalt [web ↗](https://pubs.usgs.gov/publication/mcs2026) · World Resources ### 1.2 Nickel and lithium each come from two deposit types with different chains Two metals show how a second deposit type can reshape a market. Nickel occurs in magmatic sulphides, as at Norilsk in Russia and in Canada, and in laterites, formed when tropical weathering leaches rock and leaves nickel concentrated in the soil. USGS puts 54 per cent of world nickel resources in laterites and 35 per cent in sulphides. Sulphide ore can be floated into a concentrate and smelted like copper, yielding copper, cobalt and platinum metals too. Laterite cannot be floated. It must be smelted whole into ferronickel or leached with acid at high pressure, routes Humphreys calls inherently more costly. Tilton explains why moving from one to the other need not cause a cost jump: the grades of the poorest sulphides and the richest laterites overlap, so there was no cost cliff to fall off. Lithium splits the same way. In the salars of Chile, Argentina and Bolivia, Conway describes brine pumped from beneath the salt crust into ponds measured in kilometres. Sodium, potassium and magnesium salts precipitate in turn, and after more than a year the liquid is about 25 per cent lithium chloride. SQM first pumped Atacama brine for potash, with lithium as a by-product. Brine quality varies: Bolivia's Uyuni has less than half the Atacama's lithium per litre and more than three times its magnesium. Hard-rock spodumene is blasted, crushed and concentrated like copper ore, and Australia ships most of it to China for conversion. Conway notes that hard-rock lithium carries several times the emissions and water use of brine lithium, but it can be expanded far faster than ponds can be built and filled. Case #### Nickel pig iron: China improvises a deposit type Humphreys tells how Chinese demand pushed nickel from $5,945 a tonne in 2001 to $37,216 in 2007. Chinese firms with idle iron blast furnaces revived an old, dirty technique: smelting laterite directly into a low-grade alloy, nickel pig iron, good enough for cheaper stainless steel. Ore came from Indonesia, the Philippines and New Caledonia, some from old waste dumps. As producers moved to electric furnaces and rotary kilns, costs fell from over $20,000 to near $12,000 a tonne. By 2013 China made 694,000 tonnes of nickel, 482,000 of it as pig iron, over a third of world output. Its nickel ore imports reached 71 million tonnes. - USGS Mineral Commodity Summaries 2026, Nickel [web ↗](https://pubs.usgs.gov/publication/mcs2026) · World Resources - Humphreys (2015), The Remaking of the Mining Industry · pdf pp. 80-81, 232 - Tilton (2003), On Borrowed Time? · pdf p. 80 - Conway (2023), Material World · pdf pp. 286-287, 293-294 - Tilton & Guzmán (2016), Mineral Economics and Policy · pdf p. 66 ### 1.3 Grades have fallen for a century, and technology has mostly kept pace Grades fall because miners take the best ore first. Conway traces Cornish copper from 12 per cent or more in the eighteenth century to below 8 per cent by the late nineteenth. Radetzki and Wårell cite US averages of almost 6 per cent in 1890, under 2 per cent by 1920 and under 1 per cent by 1960. Humphreys reports world head grades falling from about 1.5 per cent in the 1980s to 1.1 per cent in 2010. At Chuquicamata, Conway reports, grade fell from 2.4 per cent in 1913 to below 1 per cent by the century's end. Rock moved and processed per tonne of copper rose from 50 to 800 tonnes, water from 75 to 150 cubic metres, and energy from about 250 to over 4,000 kWh. Yet the real copper price stayed roughly flat. Radetzki and Wårell add that it fell by almost 40 per cent between the 1890s and the 1920s, just as US grades collapsed. The reason is productivity. Haul trucks grew from about 40 to over 400 tonnes. Flotation, then heap leaching and electrowinning, let miners treat rock once counted as waste. In the twentieth century US copper employment fell by two-thirds while output more than quadrupled. When Paul Ehrlich bet Julian Simon in 1980 that five metals would rise in real price over a decade, all five fell. Grade decline is still pressure. Humphreys argues that rich copper discoveries are rarer, mines are no longer getting bigger and energy may not get cheaper. Technology decides whether rising cost reaches the price. - Conway (2023), Material World · pdf pp. 212-217 - Radetzki & Wårell (2021), A Handbook of Primary Commodities · pdf p. 182 - Humphreys (2015), The Remaking of the Mining Industry · pdf pp. 231-232 ### 1.4 Strip ratios measure the waste you move to reach the ore Grade measures how much metal is in the ore. The strip ratio measures how much barren rock must be removed to reach it, usually as tonnes of waste per tonne of ore. In an open pit the ratio tends to climb with depth, because each deeper bench needs a wider ring of waste to keep the walls stable. Humphreys notes that the rock stripped per tonne of ore at copper pits rose steadily as grades fell. A rough check shows how the two combine. Conway puts typical copper ore at barely 0.6 per cent. A tonne of such ore holds 6 kilograms of copper, so a tonne of metal needs about 167 tonnes of ore before any processing losses. Conway's figure of 800 tonnes of stone moved per tonne of copper at Chuquicamata implies that most of the rest is waste rock, a strip ratio of roughly four to one. Iron ores average close to 60 per cent iron, Smil reports, and for high-grade production the ratio of material excavated to marketed product is commonly 4:1 to 7:1. The ratio moves with technology and price. Tilton and Guzmán credit better rock mechanics with mine plans that cut stripping ratios at US copper mines in the 1980s. High prices push the other way: when metal is valuable, miners can afford to strip more waste and treat lower grades, so reserves grow and so does the waste pile. Conway reports that between 2004 and 2016 Chilean miners raised annual copper output by 2.6 per cent while the ore they dug rose by 75 per cent. - Humphreys (2015), The Remaking of the Mining Industry · pdf p. 232 - Conway (2023), Material World · pdf pp. 205, 215, 219 - Smil (2016), Still the Iron Age · pdf pp. 123-124 - Tilton & Guzmán (2016), Mineral Economics and Policy · pdf p. 161 ### See it in the table [H₂O Water](https://www.materialinsights.org/commodities/water/)[K Potash](https://www.materialinsights.org/commodities/potash/)[Cu Copper](https://www.materialinsights.org/commodities/copper/)[Zn Zinc](https://www.materialinsights.org/commodities/zinc/)[Ni Nickel](https://www.materialinsights.org/commodities/nickel/)[Fe Iron ore](https://www.materialinsights.org/commodities/iron_ore/)[St Steel](https://www.materialinsights.org/commodities/steel/)[Mo Molybdenum](https://www.materialinsights.org/commodities/molybdenum/)[V Vanadium](https://www.materialinsights.org/commodities/vanadium/)[Au Gold](https://www.materialinsights.org/commodities/gold/)[Pt Platinum](https://www.materialinsights.org/commodities/platinum/)[Li Lithium](https://www.materialinsights.org/commodities/lithium/)[Co Cobalt](https://www.materialinsights.org/commodities/cobalt/)[Mg Magnesium](https://www.materialinsights.org/commodities/magnesium/) ### Check your understanding Why did the real copper price stay roughly flat while the grade at Chuquicamata fell from 2.4 per cent to below 1 per cent? Conway and Radetzki and Wårell both show grades falling while real prices held or fell. Productivity in moving and treating rock outran the extra tonnage that lower grades required. Why is gallium supply described as price-inelastic? A by-product's price is too small to change how much host ore is processed. Supply follows the host, which is why Nassar and colleagues call companion metal supply price-inelastic. A pit moves 800 tonnes of rock per tonne of copper from ore grading 0.6 per cent. Roughly what share of that rock is waste stripped to reach the ore? At 0.6 per cent, one tonne of copper needs about 167 tonnes of ore. The other 633 tonnes, about 79 per cent of 800, is waste, a strip ratio near four to one. [← Module contents](https://www.materialinsights.org/learn/commodities/from-ground-to-market/)[Mark read · Part 2: From discovery to closure: the mine life cycle and how ore is extracted →](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p2/) ## Other sections - [Module overview](https://www.materialinsights.org/learn/commodities/from-ground-to-market/index.md) - [From discovery to closure: the mine life cycle and how ore is extracted](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p2/index.md) - [Turning rock into metal: concentration, smelting and refining](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p3/index.md) - [Hydrocarbons and harvests: the other extraction chains](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p4/index.md) - [Where value sits, and the licence to keep digging](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p5/index.md) - [Key terms, quiz and sources](https://www.materialinsights.org/learn/commodities/from-ground-to-market/review/index.md)