Copper’s Biggest Mystery Is Finally Cracking

(Bloomberg) -- The warnings keep getting louder: the world is hurtling toward a desperate shortage of copper. Humans are more dependent than ever on a metal we’ve used for 10,000 years; new deposits are drying up, and the type of breakthrough technologies that transformed other commodities have failed to materialize for copper.

Until now.

In what could prove a game changer for global supply, a US startup says it’s solved a puzzle that has frustrated the mining world for decades. If successful, the discovery by Jetti Resources could unlock millions of tons of new copper to feed power grids, building sites and car fleets around the globe, narrowing and possibly even closing the deficit.

At its simplest, Jetti’s technology is focused on a common type of ore that traps copper behind a thin film, making it too costly and difficult to extract. The result is that vast quantities of metal have been left stranded over the decades in mine-waste piles on the surface, as well as in untapped deposits. To crack the code, Jetti has developed a specialized catalyst to disrupt the layer, allowing rock-eating microbes to go to work at releasing the trapped copper.

The technology still needs to be proven on a large scale. But the riches at stake are pulling in some of the industry’s most powerful players.

BHP Group, the biggest mining company, is already an investor and has now spent months negotiating for a trial plant at its crown jewel copper mine, Escondida in Chile, according to people familiar with the matter. US miner Freeport-McMoRan Inc. began implementing Jetti’s technology at an Arizona mine this year, while rival Rio Tinto Group is planning to roll out a competing but similar process.

The miners are responding to an increasingly urgent problem. Copper is ubiquitous in the modern world, used in everything from phones and computers to water pipes and cables. And while the global drive to decarbonize is based on phasing out dirty natural resources like oil and coal, an electrified future will need more copper than ever before.

Despite its importance, the world is facing a growing threat of shortages in the coming decades. The best mines are getting old and the few new discoveries are either in difficult places to operate, or face years of opposition to development.

The history of commodity markets shows that looming deficits tend to spur new discoveries and technologies. The US shale boom in the 2010s turned the oil market on its head, while breakthroughs in nickel processing upended supply forecasts.

But new discoveries in copper are increasingly unlikely, given the long history of mining – evidence of copper usage has been traced back to at least 8,000 BC in what is now Turkey and Iraq. That means most of the world’s great deposits have already been found and exploited; more than half the world’s 20 biggest copper mines were discovered more than a century ago.

Waste Dumps

Yet the long history of copper mining also means there are massive amounts of metal sitting on the surface in waste dumps. 

The reason is a principle as old as mining itself: ore is pulled up from the earth, the easiest metal is extracted, and anything too difficult or expensive to process is tossed aside as waste. Over the past decade alone, an estimated 43 million tons of copper have been mined but never processed, worth more than $2 trillion at current prices, creating huge opportunities for anyone who can successfully recover those riches.

To be sure, it’s not a new concept to reprocess mine waste when technology improves or prices rise. But that just hasn’t been feasible for certain types of ore. And the breakthrough has opportunities far beyond waste dumps – there are millions more tons still underground that haven’t been viable to mine.

Much depends on mining companies’ willingness to install Jetti’s plants. But if the technology becomes fully embraced by the industry, the company estimates that as much as 8 million tons of additional copper could be produced each year by the 2040s – more than one third of last year’s total global mine production. 

“The industry has accumulated this waste material forever,” said Jetti’s founder and chief executive officer, Mike Outwin. “They’ve been trying to come up with an answer for it on their own for a couple of decades and haven’t been able to.”

So far Jetti’s process has been running on just one mine, at Pinto Valley in Arizona. But the results have been so promising three of the world’s biggest copper miners — including BHP — have bought stakes in the company. Its latest fundraising was at a valuation of $2.5 billion.

Copper giant Freeport says it has also “initiated a commercial implementation this year at our Bagdad mine in Arizona to trial the technology and will assess the results and continue to dialogue with Jetti on other opportunities to work together.”

Copper Ores

So what is the problem that Jetti is seeking to solve?

There are two main kinds of copper-bearing rock. The most common type, sulfide ores, are typically crushed, concentrated, and then turned into pure copper in a fire-refining process. But that method isn't suitable for oxidic ores, and the industry's last big innovation came in the mid-1980s when it adapted an electro-chemical process to extract copper from oxide ores, providing a major boost to supply.

Now, Jetti aims to apply its technology to recover copper from a common type of sulfide ore that couldn’t be economically processed via either route — the copper content is too low to justify the cost of refining, while the hard, non-reactive coating prevented the copper from being extracted in the lower-cost electro-chemical or "leaching" process.

Jetti worked with the University of British Columbia to develop a chemical catalyst that breaks through the layer, so that the copper can be released using leaching without the need for high temperatures.

While Jetti’s process is the most advanced, Rio Tinto says it’s also cracked the challenge in lab trials. Rio has been offering its Nuton technology as a sweetener to junior mining companies that it invests in: if the smaller firms successfully develop their mining projects, then Rio will deploy the Nuton process to boost profitability. It’s signed three such deals already this year.

“When you look at the size of the prize, the potential is enormous,” said Adam Burley, who runs the Rio project. “It’s too big to leave on the table.”

Rio wants Nuton to have produced a total of about 500,000 tons of copper by the end of this decade, with hopes that the business may one day produce the annual equivalent of one of the world's top-five copper mines.

Other major miners including Freeport, Codelco and Antofagasta Plc have all been working on in-house solutions at their own mines, though so far there has been little disclosed information on how successful these projects have been.

And there are limitations to how much can be achieved. The focus is on North and South America, and the progress will depend on whether the technology can be deployed across the major mines.

Yet for BHP, the fact that it is even discussing the future of Escondida, the world’s single biggest source of copper, with a small upstart is telling.

Negotiations have been underway for months, although one of the sticking points in the talks has been Jetti’s insistence that it installs and runs its own plant at the host mine, according to the people familiar with the matter. There are also negotiations about how to split the profits.

Meanwhile, Rio, which is BHP’s junior partner at Escondida, is arguing that it wants the Nuton technology to also be considered, according to people familiar with the matter.

Jetti and BHP declined to comment on the specific negotiations or deals.“Jetti is very real. It’s not lab tests or pilot plants. Jetti has been deployed commercially,’’ said Outwin. “Our partners will make extraordinary profits from being able to utilize our process, and Jetti will do well.’’

--With assistance from and .

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