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

Source page: https://www.materialinsights.org/learn/commodities/from-ground-to-market/p2/

[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 2 of 5

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

A deposit is not yet supply. It becomes supply only after it is found, proved economic, permitted, financed and built, and each step takes years. This part follows that sequence and explains why it makes mineral supply slow to answer prices. It then surveys the main extraction methods: open pits, underground mines, solution mining and dredging.

### 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.
 Common misreading

#### Forty years of copper left

World copper reserves divided by mine output give about 43 years (USGS, 2025). It is tempting to read that as the date copper runs out. Conway explains why it is not. Reserves are what miners have proved and can work profitably now, and 30 to 40 years is roughly the horizon over which they bother to plan. The Limits to Growth, using similar figures, suggested copper would be exhausted by 2022 even on optimistic assumptions. When Ehrlich made his bet in 1980, reserves stood at barely 30 years. A reserve life measures how far ahead the industry has looked, not what is in the ground.

- 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 ↗](https://pubs.usgs.gov/publication/mcs2026) · 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.
 Case

#### Resolution Copper: thirty years and counting

Scheyder follows Rio Tinto and BHP's Resolution deposit in Arizona, found in the 1990s. The partners spent more than a decade studying it, drilling over a hundred holes at more than $1 million each and sinking a 7,000-foot shaft. The mine could supply a quarter of US copper consumption. The ore is deep enough to need block caving, which would leave a crater about two miles wide beneath Oak Flat, a site sacred to the San Carlos Apache. Permitting began in 2013. A land swap rode on a 2014 defence bill, an environmental report was published and then rescinded in 2021, and no permits had been granted when Scheyder wrote.

- 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 ↗](https://pubs.usgs.gov/publication/mcs2026) · Domestic Production and Use

### 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/)[Fe Iron ore](https://www.materialinsights.org/commodities/iron_ore/)[Au Gold](https://www.materialinsights.org/commodities/gold/)[Li Lithium](https://www.materialinsights.org/commodities/lithium/)[Ti Titanium](https://www.materialinsights.org/commodities/titanium/)[NaCl Salt](https://www.materialinsights.org/commodities/salt/)

### Check your understanding

Why do mines often keep producing when the price falls below their full cost?
 Tilton and Guzmán note that mines stay open while they cover variable costs, and Humphreys shows copper miners overshooting output in weak markets to spread fixed costs.

Between 2010 and 2020 the world mined 207 million tonnes of copper. What happened to world copper reserves?
 Conway reports reserves grew by 240 million tonnes. Discovery, technology and price kept turning resources into reserves faster than mining used them.

Which method recovers copper without removing rock from the deposit?
 In situ leaching circulates solution through fractured ore in place (Tilton and Guzmán). Block caving still hauls the collapsed rock out through tunnels.

[← Part 1: What the ground offers: deposits, grades and waste](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p1/)[Mark read · Part 3: Turning rock into metal: concentration, smelting and refining →](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p3/)

## Other sections

- [Module overview](https://www.materialinsights.org/learn/commodities/from-ground-to-market/index.md)
- [What the ground offers: deposits, grades and waste](https://www.materialinsights.org/learn/commodities/from-ground-to-market/p1/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)