Pressure Leaching of Copper Concentrates John O. Marsden Senior Vice President – Technology & Product Development
1
October 25th, 2004
Presentation Outline
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Safety share
Introduction Global copper reserves/resources Phelps Dodge production & reserves profile
Commercial drivers for copper concentrate leaching
The copper concentrate market and TC/RCs
Phelps Dodge copper pressure leaching developments High temperature Medium temperature
Critical success factors for commercialization
Conclusions
October 25th, 2004
Safety Share - Bagdad Concentrate Leach Project
Construction Safety Record (total project)
Total man hours 330,000 Lost time injuries 0 Recordable injuries 3 First aid treatment 9 Near miss incidents 7 Recordable Injury Frequency Rate = 1.86 (per 200,000 man hours)
Operations & Maintenance (project to date)
Lost time injuries 0 Recordable injuries 0 First aid treatment 2 Near miss incidents 18 (2004 YTD) Recordable Injury Frequency Rate = 0 651 Zero days since project start 3
October 25th, 2004
Global Copper Industry by Process Type
2003 Production (Est.)
Remaining Reserves (Est.) 11%
10%
9%
10%
80%
80% Mill, Smelt (cpy/cc) Leach, SX/EW (cc) Leach, SX/EW (ox)
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Mill, Smelt or Con Leach (cpy/cc) Leach, SX/EW (cc) Leach, SX/EW (ox)
October 25th, 2004
Potential Phelps Dodge Production Profile by Process Type
2004 Production
2010 Production
2%
18%
20%
24%
34%
22%
36%
44%
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Mill, Con Leach (cpy/cc)
Mill, Smelt (cpy/cc)
Leach, SX/EW (cc)
Leach, SX/EW (ox)
October 25th, 2004
Technology Transformation of Copper Production (PDC share; millions of pounds)
2,500
2,000
1983 – 100% conventional 2003 – 70% SX/EW
1,500
1,000
500
0 85
86
87
88
89
90
91
92
93
94
95
Conventional 6
96
97
98
99
00
01
02
03
04F
SX/EW October 25th, 2004
Phelps Dodge Mineral Reserves Profile by Process Type
17%
24%
59%
Mill, Con Leach or Smelt (cpy/cc) Leach, SX/EW (cc) Leach, SX/EW (ox)
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October 25th, 2004
Drivers for Concentrate Leaching
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Cost effective alternative to conventional smelting & refining
Capital cost versus greenfield smelter/refinery projects $1,000-2,000 versus $3,000-6,000/annual tonne Ability to utilize existing SX capacity ($300-400/annual mt) Ability to utilize spare EW capacity ($500-600/annual mt) Ability to utilize existing infrastructure
TC/RCs – Commercial third party smelting & refining rates
Operating cost Oxygen requirements & cost Altitude Acid balance Freight rates, distances, handling
Copper recovery
By-products (Au, Ag, other)
Smelter penalty elements (As, Sb, Bi, other) October 25th, 2004
Chalcopyrite Concentrate Pressure Leaching Options
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Atmospheric sulfate media Attrition grind & ferric leach Silver-catalyzed ferric leach Biological ferric leach
Pressure sulfate High temperature (>200oC) Medium temperature (>100oC <200oC) Chloride-assisted
Halide system Chloride Chloride-bromide
Ammonia
October 25th, 2004
Factors Affecting Process Selection
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Deposit characteristics
Concentrate mineralogy
Concentrate grade
Location Stand-alone versus integrated at mine site
Site acid requirements
Regional acid market Availability and cost
Acid neutralizing material Availability and cost
October 25th, 2004
The Copper Processing Technology Today
Stockpile Leaching (Oxide) (Chalcocite)
Mine
Primary Crushing
Sec/Tert Crushing
Heap Leaching
Solution Extraction
(Oxide) (Chalcocite)
ElectroWinning Customers
Acid
Milling (Chalcocite) (Chalcopyrite)
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Flotation
Smelting
ElectroRefining
October 25th, 2004
Real TC/RCs and Copper Prices ($2002) Copper Prices (¢/lb)
Japanese TC/RCs
TC/RCs (¢/lb)
300
45
250
40 35
200
30 150 25 100
20 15
0
10
19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03
50
Copper Prices 12
TC/RCs
Linear (Copper Prices)
Linear (TC/RCs) October 25th, 2004
TC/RCs versus Price Long-term Japanese TC/RCs (1975 - 2003) 50.0 45.0 y = 0.1401x + 10.415 R2 = 0.7257
TC/RC- ¢/lb (Constant 2002$)
40.0 35.0 30.0 25.0
* 20.0 15.0 10.0 60
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80
100
120
140 160 180 Copper Price - ¢/lb (Constant 2002$)
200
220
240
260
October 25th, 2004
Forecast Real TC/RCs as a Percentage of Copper Price
35% 33% 31% 29% 27% 25% 23% 21% 19% 17%
19 75 19 77 19 79 19 81 19 83 19 85 19 87 19 89 19 91 19 93 19 95 19 97 19 99 20 01 20 03 20 05 20 07 20 09
15%
Source: Brook Hunt 14
October 25th, 2004
Greenfield Smelter Developments (1991-2002) (Cu kmt)
1,200 Others (9%) 1,000 800
Indonesia (21%) India (21%) China (49%)
600
TC/RC Minimum TariffProtection
400 200
Tariff-Protection
0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Source: Brook Hunt 15
October 25th, 2004
Near-Term Shortfall in Copper Supply (Cu kmt)
Shortfall in mine production expected to be filled by concentrate production
25,000
3.8 MMt/a
20,000
15,000
10,000
Existing concentrate production w/ majority of restarts & all financed projects
5,000
Source: Brook Hunt 16
Scrap/Other SX/EW Production Copper Consumption
10 F 20
09 F 20
08 F 20
07 F 20
06 F 20
05 F 20
04 F 20
03 F 20
02 e 20
01 20
00 20
99 19
98 19
19
97
0
Concentrate Production SX/EW New Production October 25th, 2004
Primary Smelter Capacity vs. Mine Production (Cu kmt)
18,000 17,000
86%
16,000 15,000 14,000 13,000 82%
12,000 11,000 10,000
84%
9,000
Source: Brook Hunt 17
Smelter Capacity
Smelter Production
20 10
20 08
20 06
20 04
20 02
20 00
19 98
19 96
19 94
19 92
8,000
Mine Production October 25th, 2004
Phelps Dodge Copper Pressure Leaching Developments
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Phelps Dodge (& Placer Dome) have developed a suite of proprietary processes, including: High temperature process (HT) Converts essentially all sulfide sulfur to acid Maximizes acid production Suitable for locations where dilute acid can be used beneficially Medium temperature process (MT) Converts a significant portion of sulfide sulfur to elemental sulfur Lower oxygen costs Minimizes acid production Suitable for locations where dilute acid cannot be used beneficially
October 25th, 2004
Phelps Dodge Concentrate Leaching Milestones
2Q 1998
Sulfate-based concentrate leaching development started
1999-2000
Batch testwork at Hazen Research, Dawson and Phelps Dodge Process Technology Center
2000-2001
Continuous Pilot Plant Testing
3Q 2001
Technology Development Agreement executed with Placer Dome
Nov 2001
Bagdad HT Project approved
Nov 2001
Engineering awarded to Kvaerner
Mar 25, 02
Construction started by KIC
Mar 6, 03
Wet commissioning begun
Mar 20, 03
Start-up: First concentrate feed
July 2003
All design parameters met, steady state operation
Four years from first testing to commercial demonstration 20
October 25th, 2004
Phelps Dodge Concentrate Leaching Milestones (cont.)
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April 2004
Bagdad MT-DEW Conversion approved
July 2004
Construction of MT-DEW started
1Q05
Commissioning of MT-DEW scheduled
October 25th, 2004
Concentrate Leaching – Alternative to Smelting & Refining Stockpile Leaching (Oxide) (Chalcocite) Acid
Mine
Primary Crushing
Sec/Tert Crushing
Heap Leaching (Oxide) (Chalcocite)
Solution Extraction
ElectroWinning Customers
Milling (Chalcocite) (Chalcopyrite)
Flotation
Concentrate Leaching
Smelting
ElectroRefining
Offers full cost benefit of $0.05-0.10/lb over smelting & refining 22
October 25th, 2004
Bagdad Concentrate Leach Plant
August, 2003
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October 25th, 2004
Concentrate Leach – Performance Summary
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Operated since March 2003 18 months continuous operation
All key design criteria achieved Above design throughput Above design availability Above design copper extraction Operating costs in line with expectations
Demonstrated technical and economic viability of high temperature process in the appropriate application, where the dilute acid can be used beneficially
October 25th, 2004
Bagdad Concentrate Leach - Copper Production
1,800
Production (tonnes)
1,600 1,400 1,200 1,000 800 600 400 200
M
ar -0 A 3 pr M 03 ay -0 Ju 3 n03 Ju l-0 A 3 ug -0 Se 3 p0 O 3 ct -0 N 3 ov -0 D 3 ec -0 Ja 3 n0 Fe 4 b0 M 4 ar -0 A 4 pr -0 M 4 ay -0 Ju 4 n04 Ju l-0 A 4 ug -0 Se 4 p04
0
Production (metric tons) 25
Design Basis Production October 25th, 2004
Start-up Data (adapted from McNulty, 1998) 160%
% of Design Capacity
140% 120% 100% 80% 60% 40% 20% 0% 0
5
10
15
20
25
30
35
40
Months Since Commissioning Bagdad Category 2 26
BCLP 3 Mo. Avg. Category 3
Category 1 Category 4 October 25th, 2004
Concentrate Leaching & Direct Electrowinning
Stockpile Leaching (Oxide) (Chalcocite)
Mine
Primary Crushing
Sec/Tert Crushing
Heap Leaching (Oxide) (Chalcocite)
Solution Extraction
ElectroWinning Customers
Milling (Chalcocite) (Chalcopyrite)
Flotation
Concentrate Leaching
ElectroWinning
Potential to provide additional full cost benefits of up to $0.05/lb copper over high temperature process (i.e. $0.10-0.15/lb total benefit) 27
October 25th, 2004
Concentrate Leach - MT-DEW-SX Process
Concentrate Super-fine grind
Pressure Leach
Tails
S
L
DEW
PLS from stockpile leach
SX
Stockpile Leach
EW
Cathode Cu 28
October 25th, 2004
Concentrate Leach – The Path Forward
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Conversion of Bagdad to medium-temperature and direct electrowinning mode of operation under consideration Construction started in 3Q04 Start up scheduled in 1Q05 Commercial demonstration complete by 4Q05
October 25th, 2004
Phelps Dodge Concentrate Leaching Developments
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High temperature (>200oC) and medium temperature (140-180oC) pressure leaching in sulfate media
Low cash cost alternative to smelting and refining
Safe, environmentally-sound
Acid balance is a critical cost driver
Concentrate, cathode and acid freight considerations
Ability to utilize existing SX and EW capacity
Utilize existing infrastructure
October 25th, 2004
Production Decisions Impacted by Concentrate/Acid Balance
External concentrate source
North American Concentrate • Bagdad • Sierrita • Chino (partial capacity) • Cobre • Morenci (off line)
Chino Smelter 650,000 tpy capacity (off line)
External acid source
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Candelaria concentrate
Miami Smelter 750,000 tpy capacity (operating)
North American Leach • Morenci • Bagdad • Sierrita • Chino • Tyrone (partial capacity) • Miami (partial capacity)
External acid consumer
October 25th, 2004
Concentrate Leach – Potential Applications
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Morenci Preliminary feasibility study in progress Scheduled for completion 4Q04
Cerro Verde primary sulfides Preliminary feasibility study scheduled for 1Q05
El Abra primary sulfides
Other
October 25th, 2004
Copper Pressure Leaching – Critical Success Factors
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TC/RC market conditions Long term view?
Ability to understand and exploit acid balance at site(s)
Materials of construction
Operating control Mineralogy
Competitive advantage Speed of implementation Scale of implementation Ability to apply to greater proportion of production
Other technical developments Improve capital and operating costs
Environmental permitting
Intellectual property A complex environment
October 25th, 2004
