pressure leaching of copper concentrates -...

1 October 25th, 2004

Pressure Leaching of Copper Concentrates

John O. MarsdenSenior Vice President – Technology & Product Development


Presentation Outline

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


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


Global Copper Industry by Process Type

80%

10%

10%

Mill, Smelt (cpy/cc)

Leach, SX/EW (cc)

Leach, SX/EW (ox)

80%

9%

11%

Mill, Smelt or Con Leach (cpy/cc)

Leach, SX/EW (cc)

Leach, SX/EW (ox)

2003 Production (Est.) Remaining Reserves (Est.)


Potential Phelps Dodge Production Profile by Process Type

2%

34%

44%

20%

Mill, Con Leach (cpy/cc) Mill, Smelt (cpy/cc)

Leach, SX/EW (cc) Leach, SX/EW (ox)

24%

36%

22%

18%

2004 Production 2010 Production


0

500

1,000

1,500

2,000

2,500

85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04F

Conventional SX/EW

Technology Transformation of Copper Production

(PDC share; millions of pounds)

1983 – 100% conventional

2003 – 70% SX/EW


Phelps Dodge Mineral Reserves Profile by Process Type

59%24%

17%

Mill, Con Leach or Smelt (cpy/cc)

Leach, SX/EW (cc)

Leach, SX/EW (ox)


Drivers for Concentrate Leaching

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)


Chalcopyrite Concentrate Pressure Leaching Options

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


Factors Affecting Process Selection

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


The Copper Processing Technology Today

Mine

Heap

Leaching(Oxide)

(Chalcocite)

Solution

Extraction

Milling(Chalcocite)

(Chalcopyrite)

SmeltingElectro-

Refining

Electro-

Winning

Acid

Flotation

Primary

Crushing

Stockpile

Leaching(Oxide)

(Chalcocite)

Sec/Tert

Crushing

Customers


Real TC/RCs and Copper Prices ($2002)

0

50

100

150

200

250

300

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

10

15

20

25

30

35

40

45

Copper Prices TC/RCs Linear (Copper Prices) Linear (TC/RCs)

Copper Prices (¢/lb) TC/RCs (¢/lb)Japanese TC/RCs


TC/RCs versus Price

Long-term Japanese TC/RCs (1975 - 2003)

y = 0.1401x + 10.415

R2 = 0.7257

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

60 80 100 120 140 160 180 200 220 240 260

Copper Price - ¢/lb

(Constant 2002$)

TC

/RC

- ¢/lb

(C

on

sta

nt

2002$)

*


Forecast Real TC/RCs as a Percentage of Copper Price

15%

17%

19%

21%

23%

25%

27%

29%

31%

33%

35%

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

Source: Brook Hunt


Greenfield Smelter Developments (1991-2002)

0

200

400

600

800

1,000

1,200

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Others (9%)

Indonesia (21%)

India (21%)

China (49%)

Tariff-Protection

Tariff-

Protection

TC/RC

Minimum

(Cu kmt)

Source: Brook Hunt


Near-Term Shortfall in Copper Supply

0

5,000

10,000

15,000

20,000

25,000

1997

1998

1999

2000

2001

2002

e

2003

F

2004

F

2005

F

2006

F

2007

F

2008

F

2009

F

2010

F

Scrap/Other Concentrate ProductionSX/EW Production SX/EW New ProductionCopper Consumption

Source:

Brook Hunt

3.8 MMt/a

(Cu kmt)

Existing concentrate production w/ majority of

restarts & all financed projects

Shortfall in mine production expected

to be filled by concentrate production


8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Smelter Capacity Smelter Production Mine Production

Primary Smelter Capacity vs. Mine Production

(Cu kmt)

82%

86%

84%

Source:

Brook

Hunt


Phelps Dodge Copper Pressure Leaching Developments

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


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


Phelps Dodge Concentrate Leaching Milestones (cont.)

April 2004 Bagdad MT-DEW Conversion approved

July 2004 Construction of MT-DEW started

1Q05 Commissioning of MT-DEW scheduled


Concentrate Leaching – Alternative to Smelting & Refining

Mine

Heap

Leaching(Oxide)

(Chalcocite)

Solution

Extraction

Milling(Chalcocite)

(Chalcopyrite)

Concentrate

Leaching

Electro-

Winning

Acid

Flotation

Primary

Crushing

Stockpile

Leaching(Oxide)

(Chalcocite)

Sec/Tert

Crushing

Customers

SmeltingElectro-

Refining

Offers full cost benefit of

$0.05-0.10/lb over

smelting & refining


Bagdad Concentrate Leach Plant

August, 2003


Concentrate Leach – Performance Summary

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


Bagdad Concentrate Leach - Copper Production

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

Mar

-03

Apr

-03

May

-03

Jun-0

3

Jul-0

3

Aug

-03

Sep

-03

Oct

-03

Nov

-03

Dec

-03

Jan-0

4

Feb-0

4

Mar

-04

Apr

-04

May

-04

Jun-0

4

Jul-0

4

Aug

-04

Sep

-04

Pro

du

cti

on

(to

nn

es)

Production (metric tons) Design Basis Production


Start-up Data (adapted from McNulty, 1998)

0%

20%

40%

60%

80%

100%

120%

140%

160%

0 5 10 15 20 25 30 35 40

Months Since Commissioning

% o

f D

esig

n C

ap

acit

y

Bagdad BCLP 3 Mo. Avg. Category 1

Category 2 Category 3 Category 4


Concentrate Leaching & Direct Electrowinning

Mine

Heap

Leaching(Oxide)

(Chalcocite)

Solution

Extraction

Milling(Chalcocite)

(Chalcopyrite)

Concentrate

Leaching

Electro-

Winning

Flotation

Primary

Crushing

Stockpile

Leaching(Oxide)

(Chalcocite)

Sec/Tert

Crushing

Customers

Electro-

Winning

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)


Concentrate Leach - MT-DEW-SX Process

Stockpile

Leach

Concentrate

Super-fine grind

DEW

Pressure Leach

SL

EW

SX

Cathode Cu

Tails

PLS from

stockpile

leach


Concentrate Leach – The Path Forward

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


Phelps Dodge Concentrate Leaching Developments

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


Production Decisions Impacted by Concentrate/Acid Balance

Chino Smelter

650,000 tpy capacity

(off line)

North American Concentrate

• Bagdad

• Sierrita

• Chino (partial capacity)

• Cobre

• Morenci (off line)

North American Leach

• Morenci

• Bagdad

• Sierrita

• Chino

• Tyrone (partial capacity)

• Miami (partial capacity)

External

acid

source

Candelaria

concentrate

External

acid

consumer

Miami Smelter

750,000 tpy capacity

(operating)

External

concentrate

source


Concentrate Leach – Potential Applications

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


Copper Pressure Leaching – Critical Success Factors

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

pressure leaching of copper concentrates -...

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