98 • Marine Minerals: Exploring Our New Ocean Frontier 



largely replaced by zinc and zinc-copper alloys in 

 U.S. currency. 



National Importance 



Copper is a strategic commodity in the National 

 Defense Stockpile. The stockpile goal is one mil- 

 lion tons, with an inventory of 22,000 tons in 1986. 

 The United States is the leading consumer of re- 

 fined copper; it accounted for about 29 percent of 

 world consumption, or 2.2 million tons of copper, 

 in 1986. In 1982 the United States import reliance 

 was 1 percent of the copper it consumed; by 1985, 

 it was importing 28 percent.'^ Imports came largely 

 from North and South America: Chile, 40 percent; 

 Canada, 29 percent; Peru, 8 percent; Mexico, 2 

 percent. Other sources were: Zambia, 7 percent; 

 Zaire, 6 percent; and elsewhere, 8 percent. Since 

 1982, Chile has led the world in copper produc- 

 tion, followed by the United States, Canada, 

 U.S.S.R., Zambia, and Zaire. 



Domestic Resources and Reserves 



World copper reserves total about 375 million 

 tons, with 80 percent residing in market economy 

 countries. The world's reserve base is about 624 

 million tons of copper. Chile has the largest single 

 share of world reserves, accounting for 23 percent; 

 the United States is second with 17 percent. ^^ 



The United States has a reserve base of about 

 99 million tons of copper, with reserves of 63 mil- 

 lion tons. The average grade of domestic copper 

 ore is about 0.5 percent copper, while the world 

 average is close to 0.87 percent.^* By comparison, 

 copper in some polymetallic sulfide deposits that 

 have been recovered from the seafloor show high 

 variability ranging between 0.5 to 5 percent. ^^ 



Domestic Production 



The United States mined 1 .2 million tons of cop- 

 per in 1986 — second only to Chile in world mine 

 production. Domestic mine production peaked in 



"J. Jolly and D. Edelstein, "Copper," Mineral Commodity Sum- 

 maries— 1987 (Washington, DC: U.S. Bureau of Mines, 1987), p. 42. 



^\J. Jolly, "Copper," Mineral Facts and Problems — 1985 Edition, 

 Bulletin 675 (Washington, DC: U.S. Bureau ofMines, 1986), p. 203. 



"L. Sousa, The U.S. Copper Industry (Washington, DC: U.S. 

 Bureau of Mines, 1981), p. 27. 



''V. McKelvey, Subsea Mineral Resources, Bulletin 1689-A (Wash- 

 ington, DC: U.S. Geological Survey, 1986), p. 82. 



1970, 1973, and 1981 at about 1.7 million tons each 

 year, but then in response to depressed prices and 

 a worldwide recession, production was cut back. 

 Since then, copper production has recovered slowly 

 to roughly the 1980 level. Copper's recent recov- 

 ery has benefited from industry-wide cost cutting 

 and improvements in efficiency and productivity 

 resulting from equipment modernizations and re- 

 negotiated labor agreements. 



The United States is one of the world's largest 

 producers of refined copper, accounting for about 

 16 percent of world production in 1985. Copper 

 is one of the most extensively recycled of all the 

 common metals. Nearly 22 percent of domestic 

 apparent consumption is recycled from old scrap. 

 Copper prices peaked in 1980 at about $1.00 per 

 pound (current dollars) as a result of high demand 

 and industry labor disruptions, but have since sunk 

 to nearly $0.62 (current dollars) in 1986. With 

 lower prices, there is little incentive to increase ef- 

 forts to recycle used copper. 



Notwithstanding the large reserve base of cop- 

 per in the United States, lower-cost imported cop- 

 per has displaced appreciable domestic production 

 in recent years. During 1984-85, domestic copper 

 refinery capacity was reduced by about 410,000 

 tons, and several major mines closed. Between 1974 

 and 1985, domestic operating refinery capacity de- 

 clined from 3.4 million tons to about 2 million tons 

 as the result of major industry restructuring and 

 cost reduction. 



A number of factors have contributed to the dis- 

 advantage that U.S. producers face in meeting for- 

 eign competition, e.g., lower ore grade, higher la- 

 bor costs, and more stringent environmental 

 regulations and until recently, foreign exchange 

 rates. Although significant progress recendy has 

 been made by U.S. copper producers to increase 

 productivity and reduce costs at the mine and 

 smelter, there is some doubt whether domestic pro- 

 ducers can maintain their market position in the 

 long term.'^ 



Future Demand and Technological Trends 



Since 1981 , worldwide copper production has in- 

 creased significantly while the rate of demand 



''Commodities Research Unit, Copper Studies, vol. 14, No. 4 (New 

 York, NY: CRV Consultants, 1986), p. 7. 



