The New Bronze Age
Worries about oil and gas hog the airwaves. But copper is also essential to keep the world running: It threads through your house, your computer, your eco-correct hybrid car. And it's getting just as difficult, expensive, and environmentally menacing as oil to extract. We have entered the era of tough ore.
In 2001, the giant mining firm Rio Tinto made a momentous decision: Its Bingham Canyon Mine—the oldest and richest open-pit copper mine in the world, in operation since 1906 and the largest man-made excavation in history—would be shut down.
Since the early 1980s, the copper industry had been in a prolonged slump. As Europe and North America shifted from manufacturing to service economies, demand for copper flatlined and its price stagnated. Mine operators were making cents on the dollar. Bingham—a huge crater in the heart of the Oquirrh Mountains, 20 miles from Salt Lake City—was at a tipping point. To keep producing, the pit would have to keep expanding, and each expansion would be more expensive than the last. Eventually, the costs would outweigh the returns. Closure of the pit was slated for 2013. It would be the end of an era.
That end did not come. If you visit Bingham Canyon today, you’ll find a fleet of house-size dump trucks descending into the pit, loading up on rock, and climbing back up and out, around the clock. The pit is being widened and deepened to expose new ore, even as current mining operations continue.
But the pit is not the whole story. Rio Tinto is planning to build a second mine on—or rather, under—the site. The aboveground operation will now be shut down around 2029. But Bingham Canyon is likely to go on. According to the current plan, the giant pit will give way to a giant underground mine, already in the early stages of construction, 2,000 feet beneath the pit’s floor.
The plan calls for five blocks of ore, each more than half a mile square and a third of a mile tall, to be carved out of the solid rock underneath the pit. In theory, the void created could swallow midtown Manhattan from 33rd Street to 57th Street; 500 feet of empty air would hang above the spire of the Empire State Building. The project would completely transform the mine’s operations. Ore from an open pit is dug from above, like sugar spooned from a bowl. Ore from an underground mine is dug from below, like sugar spooned out from the bottom of a pile, except that the sugar is a city-size slab of solid rock.
The metamorphosis underway at Bingham Canyon is astonishing. And it is not unique. “The same thing is happening at Freeport,” said Barry Gass, then the project director of underground development at Bingham, referring to a major mine in Indonesia. “The same’s happening at Escondida [Chile]. The same’s happening at Oyu Tolgoi [Mongolia].” Likewise at Malanjkhand, India’s largest copper pit. Chuquicamata, a Chilean pit mine second only to Bingham in scale and age, is going underground too. Palabora, in South Africa, already has. All around the globe, aging copper pits are being reborn as caverns.
Brand-new copper mines, both open pits and underground, are also proliferating, in places that not long ago would have been unthinkable—too remote, too politically unstable. Even a partial list reads like an adventurer’s itinerary: Aynak, Afghanistan; Schaft Creek, British Columbia; Las Bambas, Peru; Junin, Ecuador; Kamoa, Democratic Republic of the Congo. In the United States, planning is under way for Resolution, a mine 7,000 feet beneath Arizona, and for Pebble, likely a combination pit and underground mine, in Alaska. Each of these is a potential world-class operation, producing copper on the Bingham Canyon scale. Scores of smaller mines are under construction, too. An alien observing human activities from space could be forgiven for thinking we are only now entering the Bronze Age.
"If you think about electric cars and wind turbines, they're all part of this demand for copper. I mean, I drive a Prius. It's full of copper! The more you move toward a lower-footprint future, the more demand there is for our product."
FROM MINE CLOSURES TO a mining boom in 10 years. What happened? In a word: China. Modern industries run on electricity. So do middle-class lifestyles. Copper wires carry almost all of it. As China’s economy boomed over the past decade or so—as its industry and its middle class expanded—it more than tripled its annual copper consumption, to 7.9 million metric tons in 2011, making it the world’s largest user. (The U.S., by comparison, consumed 1.9 million metric tons that year.)
The effect on the price of copper was dramatic. In 2000, it cost just under $1 a pound, a price it had languished at for years. By the middle of 2007, just before the Great Recession hit, it had soared to $5 a pound. And though the price has settled a bit since then, it now fluctuates around a base of $3 a pound—a 200 percent increase in little more than 10 years. Disinterested industry analysts expect that base price to last for at least the next 20 years. So do self-interested mining firms.
When I met Gass at Bingham Canyon last fall, he sketched a whiteboard diagram for me of the timeline of metals usage in industrializing societies like China and India. First comes iron, the basis of simple industry and infrastructure like railroads. Then comes copper, supporting advanced industry and the electrification of homes. Finally comes aluminum, for cars, appliances, and airplanes—the fruits of wealth. “A lot of this has happened,” Gass said, jabbing a finger at iron’s portion of the curve. Then he pointed at copper. “This is happening.”
Copper mining, even by modern best-practices guidelines, is a hugely costly endeavor from an environmental standpoint. The mines themselves are vast. Processing the ore consumes enormous quantities of fuel (often coal) and water. The waste rock produced—known as tailings—is suffused with toxic substances, including sulfuric acid, arsenic, lead, and cadmium. These substances are intrinsic to the ore, not a byproduct of processing. They cannot be avoided, and they render the tailings dangerous for tens of thousands of years. It is these costs that opponents of the proposed Pebble Mine, to take an example close to home, are alarmed by. It is one thing to accept a giant mine in the middle of a desert, like Bingham. It is another to accept one in a sparkling Alaskan wilderness in the middle of a volcanic mountain range, upstream from one of the world’s greatest salmon fisheries.
But there is a second side to modern copper-mine development. Big mines do not simply remove material and wealth. They bring it in. Of course, they always have, in a desultory way: a company would build a railroad for itself, and pretty soon a town would spring up beside the tracks. Miners would spend their paychecks; commerce would begin to flow. Brigham Young founded Salt Lake City, but Bingham Canyon helped transform it from an isolated religious enclave into a bustling capital.
Increasingly, however, this process is being formalized. A typical mining contract no longer specifies just rents and royalties, payable to the state. It specifies exactly what the mining firm will build—a power plant, a water-supply system, a communications network—and how these things will be shared with the public. In exchange for the right to extract copper, mining firms are turning themselves into vehicles for transferring wealth, infrastructure, and technology directly to citizens.
Countries with reserves hold the cards. Copper does not often appear in a pure form in nature, the way gold forms nuggets. Instead, it combines with other elements to form stony minerals, of which the copper makes up only a small part. Fifty years ago, ore from the average pit mine was 1.5 percent copper. Most of that rich ore is gone: The average today is 0.6 percent. For every ton of copper extracted, nearly 167 tons of ore is processed and nearly 167 tons of tailings produced.
At the same time, the sheer size of the old pits is becoming a hindrance to their economic efficiency. Pit mining works when you can get a lot of ore out of the ground relatively quickly and cheaply. When a pit mine is young and shallow, that’s easy. But, as any child playing in a sandbox quickly learns, to make a hole deeper, you have to make it wider. At Bingham Canyon, the latest expansion of the pit involves removing a wedge of rock a mile wide, 1,000 feet thick, and 3,500 feet tall from the pit’s south wall. That rock is not ore; it’s worthless junk, called overburden. The ore being targeted is buried beneath it. It will take an estimated seven years and more than $660 million in capital outlays before that ore is finally exposed. “Literally and figuratively, we’ve got a whole mountain to move,” Gass said. “At some point, the dollars and cents of that don’t make sense.” Another liability of the giant old pits is landslides. While I was writing this article, Bingham experienced a huge one, which temporarily closed the mine and is expected to cut its 2013 production in half.
So it has been decided that the latest pit expansion at Bingham will also be the last. The ore it exposes will be nearly exhausted around 2029, and it is then that operations would shift underground. A similar story is already playing out at many of the other old pit mines. At heart, the reason they are going underground—and the reason huge new mines are being developed in challenging places like Afghanistan and Mongolia—is not that it’s cheap or simple but that it is cheaper and simpler than digging out a whole sandbox for the handful of pennies buried at its bottom.
The situation is analogous to the one faced by the petroleum industry in the 1970s. At that time, there were fears that the world had hit “peak oil.” In hindsight, only the easy sources were drying up. More difficult sources—the North Slope oilfields of Alaska, for example—remained, and have since been tapped. The so-called tough oil from these places enabled global economic expansion, with all its benefits, to continue. It also accelerated climate change and made disasters like Deepwater Horizon inevitable.
The world is not running out of copper. But it is becoming harder to find and produce, and its social goods are accompanied by intensifying environmental ills. As Gass bluntly put it to me, “There’s no more easy fruit.” We’ve entered the era of tough ore.
I MET GASS AT Bingham Canyon on a raw morning last October. Dark-haired and solidly athletic, after years of globetrotting as a mining engineer, he still speaks with the accent of his native Zimbabwe. Although we planned to stay far away from any dangerous mining operations, he had me change into a set of safety gear, from hardhat to steel-toed boots, and strap on a thick belt with an emergency oxygen generator clipped to it. “I was in the South African gold-mining industry pre-1994,” Gass said, pausing to let the Apartheid-era date sink in. “We had a fatality a week. At least one.” The day I met him was the 456th in a row without an injury to any member of his crew.
We hopped into a pickup and drove over a low ridge into the mine. When digging began, in 1906, the ore formed a squat pyramidal peak in the heart of the Oquirrh Mountains. Today the peak is long gone. In its place is a hole two and a half miles long, a mile and a half wide, and more than three-quarters of a mile deep. An early snowstorm had blown in, and from the rim of the pit, Gass and I watched as huge white tendrils of cloud broke loose and spiraled thousands of feet down toward its bottom. I said it looked like the mine was inhaling the storm. Gass said that it was: The pit is so big, it creates its own weather patterns.
We followed the tendrils on a creeping half-hour drive down a steep corkscrew of crushed-rock road. All around us, the world’s largest electric shovels were scooping blasted rock into some of the world’s largest dump trucks. A dozen shovels, more than 100 trucks; 98 tons a scoop, 320 tons per load—Bingham Canyon shifts 500,000 tons of rock a day, more than two-thirds of it useless overburden. As the laden trucks drove out of the pit to dump it, their weight squeezed water out of the ground. It ran down the pit roads in streams. A fleet of some of the world’s largest road graders follow the trucks, constantly repairing the damage.
Beyond the pit’s walls was the other half of the Bingham operation: ore processing. In facilities spread for miles across the Oquirrh foothills, the ore is crushed to powder, and the copper is separated, then smelted, and finally refined into 99.99-percent-pure ingots.
To feed this chain, Bingham operates a 175-megawatt power plant that is fueled by coal delivered via rail every day. A pumping-and-recycling facility supplies tens of thousands of gallons of water per minute for the power plant and for various processing steps. The whole operation is constantly monitored by a network of computers and technicians. The 150,000 tons of ore processed daily yields about 820 tons of copper—and 149,000 tons of tailings. When the overburden is included in the tally, less than one five-hundredth of the total mass removed from the pit each day is copper itself.
Gass and I arrived at the bottom of the pit. The view from there was no less astonishing than the one from above. The walls rise so steeply—in places at an angle of 75 degrees, not far off vertical—that the sky appears to be set inside a circle of stone. Earlier, while diagramming the mine, Gass had noted offhandedly, “We’re already flirting with slope stability here,” referring to the north wall of the pit, the steepest section; it was part of this section that collapsed in April, burying the floor of the pit under 165 million tons of rubble.
Gass led me a few hundred feet down a tunnel, one of a pair now descending from the pit floor. At its far end, under a steady spray of newly liberated groundwater, we watched a technician prepare the rock face for further digging. It didn’t look like much to me, but Gass was alive with anticipation. He saw things in the rock that I couldn’t.
AMONG METALS, ONLY SILVER conducts electricity more efficiently than copper, but it is too rare and expensive to be used on an industrial scale. Copper is also ductile, malleable, and highly corrosion-resistant. This makes it exceptional for wiring and plumbing. Several important fertilizers are copper-based; so are several important pesticides. Copper is not particularly strong, and it is dense. But what it does, nothing does quite so well. And what it does, no modern economy can do without.
This creates a conundrum. Most of oil’s qualities are not unique to it. A coal-fired or nuclear-power plant (or a hydroelectric dam, or a wind farm) produce exactly the same quality of electricity as an oil-fired plant. Automobiles can run just as well on corn ethanol, biodiesel, or energy stored in batteries as on gasoline. There are few such equivalencies for copper.
At Bingham Canyon, I spoke with Rohan McGowan-Jackson, Rio Tinto’s vice president of innovation and resource development. At the height of China’s boom, when copper reached its record price of $5, “there were some uses of copper which changed,” he acknowledged. “Eighty cents a pound, it makes sense to use copper for piping. Five dollars a pound, it might not.” In that case, some plumbing was replaced by lesser materials, like PVC. But overall, McGowan-Jackson noted, demand for copper remained “pretty inelastic” throughout the price spike. And there are no challengers for the biggest prize: electrification. Other than in high-voltage transmission lines, where aluminum’s light weight and low cost win out over its poor conductivity, where there is electricity, there is copper: in every home, every computer, every streetlight.
McGowan-Jackson added a modern irony. “If you think about electric cars and wind turbines,” he told me, “they’re all part of this demand for copper. I mean, I drive a Prius. It’s full of copper! The more you move toward a lower-footprint future, the more demand there is for our product.”
For anyone now eyeing their light switches with renewed guilt—I installed LED bulbs; now you’re saying the wiring is dirty?— there is more bad news. Again, copper’s intrinsic qualities prove to be a double-edged sword. It is eminently recyclable, but it is also exceptionally durable. Once a copper item—the wiring of an office building, for example— is installed, it tends to stay out of the material stream for years. In the scrap industry’s terminology, it has a long resonance. Demand for copper, however, continues to grow, and so it largely has to be met with new material—with ore coming out of the ground.
In any case, recycling copper is not necessarily better for the planet than producing new metal. Scrap copper tends to come in the form of wire wrapped in plastic or vinyl insulation. Isolating the wire involves a number of rather nasty processes, from simply burning off the insulation to melting it with solvents. There are, in fact, no more scrap-copper refineries in the United States, partly because our strict environmental laws have rendered them unprofitable. Instead, U.S. scrap copper is exported to places with looser standards—primarily China, where the scrap business is booming. In 2000, we sent $165 million worth of scrap copper there; in 2011, $3.5 billion worth.
THE TUNNELS ARE ONLY the very beginning of the underground project at Bingham Canyon. According the plan, they will wind 2,000 feet beneath the ore body. Then, 300 miles of smaller tunnels will be bored across the rock, one above another, creating a dual-layered lattice. The layers will be connected by vertical funnel-shaped shafts. Finally, the ore above the upper lattice will be blasted, and the shattered ore will flow down the funnels to the lower lattice, from which it will be removed.
Secondary problems will have to be solved. The rock is saturated with groundwater; thousands of drainage holes must be drilled, and a massive pumping system installed, to keep the tunnels from flooding. Because so many miles of latticework must be constructed, Rio Tinto plans to use speedy tunnel-boring machines rather than traditional drill-and-blast techniques. But machines that meet its needs—that can operate at steep angles and turn in tight radii—don’t yet exist. They’ll have to be invented. Rio also plans to use robotic trucks and scoops to remove the ore. (“We’re going to drive them from the surface using PlayStation controls,” Gass said.) That system will have to be custom-built, too.
For Bingham, as for any mine shifting underground, the pay-off for all this preparation would be twofold. First, after the initial blast, the production of ore is self-sustaining. The ore body simply collapses under its own weight, and as one load of broken ore is trucked out, more flows in to replace it. It’s a safe, predictable process; essentially, gravity does the work of dynamite. Second, unlike in pit mining, no overburden—the ore-free junk rock—has to be shifted. Underground mines shift ore and nothing else.
The technique, known as block-caving, is not new, but the scale is. Copper mines are measured by the amount of ore they process. “Twenty years ago, a big underground mine would have been six, eight thousand tons a day,” Gass said. “We’re designing this to be over a hundred and fifty thousand tons a day”—as much as the pit now produces. After the first set of five block caves has been mined out, sometime decades from now, a second set below it may follow. A third, still deeper set is possible after that. Ultimately, more ore may be dug out from underground at Bingham than will be removed from the open pit in its entire existence.
This explains why Rio Tinto is prepared to spend more than 10 years and $1 billion to move Bingham Canyon underground, and why timelines and expenditures like these are becoming the norm around the globe. Chuquicamata. Oyu Tolgoi. Malanjkhand. The names begin to sound like incantations. They conjure extraordinary visions and princely sums.
THEY ALSO CONJURE CURSES and blessings in equal, or at any rate indivisible, measure. The list of machinery, manpower, and energy needed to run Bingham Canyon represents a huge environmental bill. And the list would be similar for most other copper mines.
But the list also represents the rudiments of any industrial society. Electricity, water, transportation and communications networks, and highly skilled people to put it all to use: What a modern copper mine needs is hardly different from what a modern economy needs. And the developing nations where many of the new mines are being built have begun to exploit this fact. The mines are no longer treated simply as financial windfalls but as potential sources of infrastructure, technology, and human capital whose benefits extend beyond, and will outlive, the mines themselves. It is a prudent approach. Ore eventually dries up, but there will always be mouths to feed.
An example to paint this picture: Oyu Tolgoi, Rio Tinto’s giant copper mine 300 miles south of Ulaanbaatar, in the Gobi Desert, is nearing completion of the first phase of construction. It will begin as an open pit, then expand into underground operations in the coming decade. The first ore was to have been smelted in June 2013. Rio Tinto has invested more than $6 billion in Oyu already, and is committed to investing at least $5 billion more. This alone has significantly boosted the Mongolian economy. But the Mongolian government also owns 34 percent of the mine operation outright, and Rio Tinto will pay royalties on the ore it extracts and taxes on the profit it earns. Oyu’s opening will immediately increase the government’s annual revenue by a third. The mine is expected to stay open for 50 years.
But the contract Rio signed with the Mongolian government goes beyond money. Ninety percent of mine workers must be Mongolians, and Rio must provide them with training and education. The company must build an airport (done) and a railroad (under construction), which will link Mongolia to the Chinese rail network and give the landlocked country access to deepwater ports. By 2017, all of the mine’s electrical power must be generated in Mongolia. This agreement has helped the government raise $1.5 billion, through bond sales, for a new 1,200-megawatt power plant, which will supply electricity not just to the mine but to businesses and homes across the country.
Before Bingham Canyon, Gass spent two years at Oyu, helping to develop the mine and its infrastructure. “It’s real easy to plan,” he joked. “There is nothing, so you have to build everything.” The result, enforced by a binding contract, is a huge new copper mine—and a huge investment in human and physical capital whose benefits Mongolia will enjoy even after the copper is exhausted.
Twenty or even 10 years ago, the contract for a mine like Oyu would have looked very different. The financial portion likely would have been a simple transfer of funds, with no government stake in the mine. Royalty and tax rates would have been lower. Infrastructure would have been solely the mining firm’s decision with neither a formal statement of what would be built nor a plan to integrate it into the nation’s social and economic fabric.
I asked Michael Stanley, a geologist and economist at the World Bank who is heavily involved in mine development in Asia, to explain what has changed. First, he said, in the past two decades many countries have formalized state ownership of mineral resources. With the government owning the ore, mining firms are forced to deal with a single, powerful entity when making mine-development deals, and the communities that stand to be affected by the new mine can petition that entity. “It clarifies up front, at the point at which a [mining] license is issued, most all of the roles and responsibilities that fall to the mining companies, to the government, and to the community,” he said.
Second, with guidance from the World Bank and other development organizations, many countries have adopted a new, more lucrative method of selling mining rights. In the past, firms would negotiate for mining rights individually, behind closed doors; all too often, the only money that would exchange hands was a bribe to high officials in exchange for a license. By contrast, most nations now sell mining licenses in open, public auctions, called resource tenders. The government defines the terms of the licenses, and multiple firms compete. The only thing they get to define is the value and structure of their bid. “We discourage a lot of negotiation,” Stanley said. “Or, in another way, what you’ll be negotiating on is the unique aspects of a property. The conversation then gets down to: What kind of infrastructure are you going to build? How can it be shared? Who can it be shared with? And what do we have to do on the government side to make sure that it does get shared?”
Stanley surprised me with his third point. The Internet, he says, has been a key factor in changing the way mine development is negotiated, because it has given formerly weak third parties—local communities, native peoples with traditional rights to mining lands, environmental groups—a voice in the negotiations and a sympathetic audience in the wider world. “A small group in any rural country can, with a Google search and the ability to speak some English, access that whole global experience. And they are. In 1985, it was very difficult for somebody in Mongolia to understand what was going on in mine development. Now you can push information to the community on their cell phones.” In 2011, Stanley and a colleague wrote a report on the development of Afghanistan’s Aynak copper mine that, in effect, is a guidebook for other governments and communities to follow. For some time after it was published, the report was the most-downloaded item on the World Bank website.
For mining firms, these changes are about more than process. They are about the very nature of the business. Stanley estimates that 60 percent of firms’ development budgets is now spent on things other than the actual excavation of ore. Rohan McGowan-Jackson, of Rio Tinto, gave me an even higher number: Up to 70 percent, he said, goes to “port, processing, water, power, land, relocation of people—all the stuff that is peripheral to actually getting into the deposit and getting it mined.” Stanley believes that within a decade, mining firms will function essentially as private economic-development agencies, with mining merely providing the profit motive and the funds. In the struggle to access tough ore, construction of the mines themselves is, ironically, becoming secondary. “The front line is infrastructure,” he told me, “and the second front is technology.”
IN THE END, THE math is not that hard. The world’s population is growing, and growing richer. Demand for copper is rising. The pressure to dig deeper, on an ever-greater scale, ever further afield, is immense. It will be for decades.
When working out the cost-benefit analyses of new developments, mining firms look ahead a quarter of a century and more. Their potential investments measure in the tens of billions of dollars; their calculations, understandably, err on the side of caution. When they make projections for the next 30 or 40 years based on $3-a-pound copper, as they now often do, they are not saying that the industry is headed for Easy Street. They are saying that tough ore will not get easier anytime soon.
Which means that the ethical dilemma embedded in tough ore—that copper’s increasing benefits to humanity come at an increasing cost to the environment—will not soon get easier, either. To be a member of any industrialized society—to read this magazine by the light of an electrical bulb, even a low-energy LED bulb—is to amplify both the benefits and the cost.
That said, the proper time line on which to measure the impact of tough ore is not decades but millennia. The toxic tailings produced by copper mines must be sequestered behind dams—“in perpetuity,” to borrow an Environmental Protection Agency term—for thousands of years after the mines close down. So the basic question asked by companies, governments, and communities considering the development of a new mine—“Is it worth it?”—involves generations that will only bear its costs, without reaping its benefits.
As Gass and I drove out of Bingham, I asked for his thoughts on Pebble, the proposed mine in Alaska—the one whose tailings would sit above the Bristol Bay salmon grounds; above beautiful Lake Iliamna, with its rare native species of freshwater seal; above a seismic zone that routinely jolts the region with powerful earthquakes. The process of submitting state and federal applications to build Pebble may start later this year.
Gass didn’t have to think long. “At $3 a pound”—the current price—“maybe we’ll decide it’s not worth it,” he said. “But when copper’s $400 an ounce and Pebble is the last ore on Earth, it’ll come out of the ground.”
Copper is vanishingly unlikely ever to approach such a price. Nor will it conceivably ever run out, even if, in some impossible geochemical trick, all the world’s ore disappeared tomorrow: There’s copper dissolved in seawater; we would just have to boil the oceans to get at it. Gass’ point was that, for now, we as a society may decide that what Pebble would destroy is more valuable than what it would produce—but he was also saying that our moral calculus, like the price of copper, is swayed by demand.
I am not convinced that Pebble, or any other giant mine now under consideration, will need more than $3 copper to be born. When I visited Bingham Canyon, I stayed in Salt Lake City, and the two people I mentioned the mine to—a waitress and a hotel clerk—had no idea it was even there. These were longtime locals. It struck me that for all their size and impact on the land, even the biggest mines can leave a small footprint on the mind.
The thought struck me again as Gass and I left the Bingham Canyon. The pit disappeared into the snow clouds behind us; in front of us, a range of low mountains came into view. If you didn’t know that they were made of the waste rock that came out of it, you could have forgotten that the biggest hole on Earth was there.