From ground to market: From discovery to closure: the mine life cycle and how ore is extracted

2.1 Exploration has gambler's odds and turns resources into reserves

Tilton and Guzmán describe primary production as four steps. Exploration finds identified resources. Some of these become reserves: known deposits that are economic at current prices and technology. Companies then invest in capacity, meaning the mine, mill, smelter, railway and port. Only then does production follow. Manufacturing skips the first two steps, which is what makes mineral supply distinctive.

The odds at the first step are long. Humphreys estimates that of every thousand deposits explored, about one becomes an economic discovery, and only about 0.03 per cent prove world-class. Much of the industry's value is created by finding and proving deposits rather than by mining them. That work falls largely to juniors, about 1,600 listed in Toronto and another 1,000 in Australia when Humphreys wrote, financed by equity because banks will not lend against a drill hole. Equity is easy to raise when prices are high, so exploration spending tracks metal prices closely, and juniors' spending swings most. Reporting codes such as JORC in Australia and NI 43-101 in Canada, the latter introduced after the Bre-X fraud, govern how a company may claim reserves.

Reserves are therefore an economic quantity, not a stock count, rising with discovery, technology and price. Conway notes that between 2010 and 2020 the world mined 207 million tonnes of copper while copper reserves grew by 240 million tonnes. USGS puts world copper reserves at 980 million tonnes in 2025, while its 2015 assessment put identified resources at 2.1 billion tonnes including past production, with undiscovered resources of a further 3.5 billion.

• Tilton & Guzmán (2016), Mineral Economics and Policy · pdf pp. 67-68
• Humphreys (2015), The Remaking of the Mining Industry · pdf pp. 141-144
• Conway (2023), Material World · pdf pp. 212, 214, 218-219
• USGS Mineral Commodity Summaries 2026, Copper web ↗ · World Mine and Refinery Production and Reserves; World Resources

2.2 New mine supply arrives years after the price signal

Once a deposit is proved, the slow part begins. Radetzki and Wårell put the usual lag from exploration to production at 5 to 10 years. Scheyder notes that a US federal mining permit can take a decade or more, against a few years in Canada. Construction takes years. Humphreys describes CITIC Pacific's Sino Iron project in Australia, which came into production $8 billion over budget and four years late.

The lags show in the data. Humphreys traces the copper price upturn of 1987 to faster world mine output only in 1995, eight years later. The price recovery of 2004 appeared in 2012 and 2013, when mine output grew 4 and 8.5 per cent after a decade of 1.7 per cent a year. Mining capital spending peaks about a year after prices, so new capacity tends to land as a boom fades.

Capital intensity deepens the problem. For years the rule of thumb was about $5,000 to build a tonne of annual copper capacity. By 2010, Humphreys reports, large projects cost $10,000 to $15,000 a tonne, some over $20,000. A greenfield iron ore mine went from about $100 to $200 or more per annual tonne. Because so much cost is sunk, mines keep running when prices fall below full cost, as long as price covers cash costs. Humphreys adds that copper miners tend to overshoot output forecasts in weak markets, squeezing out tonnes to spread fixed costs. The cycle ends with closure: Rio Tinto planned 40 to 50 years of operation at Resolution, then 5 to 10 years of reclamation.

• Radetzki & Wårell (2021), A Handbook of Primary Commodities · pdf p. 42
• Scheyder (2024), The War Below · pdf pp. 28, 45-46, 61-62
• Humphreys (2015), The Remaking of the Mining Industry · pdf pp. 98, 110, 146-147, 230

2.3 Open pits give way to underground mines as deposits deepen

Large, shallow, low-grade bodies suit open pits. Benches are drilled and blasted, loaded by shovels and hauled by trucks, and cost per tonne is low because the machines are enormous. Chuquicamata, Conway writes, is longer and wider than Central Park and deep enough to swallow the Burj Khalifa. In the Pilbara, Rio Tinto moves iron ore with autonomous trucks and 1,600 kilometres of railway (Smil).

As a pit deepens, the strip ratio climbs until it becomes cheaper to go underground. Conventional underground mining follows a vein or seam and drills and blasts it out. For big, low-grade bodies the method of choice is block caving. Miners drive tunnels beneath the ore, blast to undercut it, and let gravity collapse the rock into draw points. Codelco is now block-caving beneath Chuquicamata, and Freeport is doing the same under the Grasberg crater in Indonesia, where driverless trains are to haul ore along a 23-kilometre track (Conway). Rio Tinto estimates cited by Humphreys put underground mines at 27 per cent of world copper output in 2013, rising to 51 per cent by 2019. Underground mining, Humphreys stresses, is inherently harder and more costly.

Caving has a cost at the surface. The ground above collapses into a crater, which is why Resolution is so contested. At Kiruna in Sweden, Conway notes, the iron ore mine has spread so far beneath the town that it is being moved building by building. At Chuquicamata the threat came from waste: by 2008 Codelco had moved all 20,000 residents to Calama as waste rock and smelter fumes overran the town.

• Conway (2023), Material World · pdf pp. 203-207, 216-217
• Smil (2016), Still the Iron Age · pdf p. 125
• Humphreys (2015), The Remaking of the Mining Industry · pdf p. 232
• Scheyder (2024), The War Below · pdf p. 45

2.4 Solution mining and dredging recover minerals without digging hard rock

Some methods dissolve the metal instead of hauling the rock. Heap leaching piles crushed oxide ore on plastic liners and sprinkles it with dilute acid; at Chuquicamata, Conway says, the pads look like irrigated fields. Tilton and Guzmán describe two further variants. Dump leaching treats old waste heaps and needs no new mining at all. In situ leaching pumps solution through fractured ore that never leaves the ground. The copper-bearing liquor then goes to solvent extraction and electrowinning, covered in Part 3.

Salts are often mined the same way. USGS describes potash in Utah and New Mexico produced by deep-well solution mining: water dissolves buried sylvinite, the brine is evaporated in solar ponds, and flotation separates potassium chloride from salt. Lithium brines are a natural version of the same idea, pumped from beneath the salars of the Andes. These methods avoid open pits and large tailings dams, but they draw on water, and in deserts water is the binding constraint.

Dredging works loose sediment. Placer gold and tin, and heavy-mineral sands that yield titanium minerals and zircon, are scooped or pumped from river beds, beaches and shallow seas, then concentrated by gravity because the valuable grains are denser than the quartz around them. The same technology supplies the bulkiest solid material of all, sand. Conway describes Singapore as the world's leading sand importer, and reports Indonesia warning that dredging and sand mining had erased several of its islands. Oil and gas wells, the subject of Part 4, are the extreme case of extraction without excavation.

• Conway (2023), Material World · pdf pp. 55-56, 207-208
• Tilton & Guzmán (2016), Mineral Economics and Policy · pdf pp. 162-163
• USGS Mineral Commodity Summaries 2026, Potash; Gold; Titanium Mineral Concentrates web ↗ · Domestic Production and Use

See it in the table

Check your understanding

Why do mines often keep producing when the price falls below their full cost?

Between 2010 and 2020 the world mined 207 million tonnes of copper. What happened to world copper reserves?

Which method recovers copper without removing rock from the deposit?