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Commodity Investing: Maximizing Returns through Fundamental Analysis by SARAH MULHOLLAND, JESS GASPAR, JOHN ECKSTEIN, ADAM DUNSBY

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CHAPTER 13

Copper

Notable for its shiny reddish color, hardness and malleability, copper has been used in jewelry and weapons for as long as 10,000 years. By 3000 B.C., humans had learned that mixing copper with tin or arsenic yielded a significantly harder material, an alloy that had a low enough melting point to be cast in open hearth pit fires. This was bronze, and with its discovery came the Bronze Age and the continued blossoming of Western civilization. Today, copper's importance is little diminished. The metal's electrical conductivity, corrosion resistance, ductility, malleability, and rigidity render copper an essential part of electrical wiring, plumbing, brass valves and fittings, air conditioning, electric motors, and integrated circuits. That is, as long as its price does not rise too high.

PROCESSING AND PRODUCTION

In contrast to its ubiquitous industrial use, copper is a relatively rare element. It is roughly the twenty-fifth most common element in the Earth's crust, accounting for only 0.006 percent on a mass basis.1 Fortuitously, some copper comes in high-concentration deposits rather than being uniformly spread through the Earth. The next few paragraphs describe how copper in these deposits is transformed into the high levels of purity required for industrial processes.

Copper processing begins with mining. U.S. mines at the turn of the twentieth century contained 3 to 3.5 percent copper. Today, U.S. mines recover copper economically at concentrations of less ...

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