Ore grade fluctuations, fault zones and unexpected geological conditions can be any miner’s largest foe, said Copper 360 executive chair Shirley Hayes. For companies like the red metal miner and producer with several sites within its rights portfolio, sustained production flow and grade medians become critical.
Strategic diversification or, as Hayes put it, ‘not putting all your eggs in one basket,’ is key to robust performance and sustained success. “This principle is particularly evident when we examine the copper mining industry,” said Hayes. “Especially within the context of a cluster mining model.”
A cluster mining model allows for the simultaneous development and operation of multiple mines within a single region. Copper 360 holds twelve open and underground mines in the Northern Cape Copper Belt within 19 260,0346 hectares, all positioned within a 13 km radius with close proximity of each other and the Centralised Processing Facility.
“While these mines are geographically close, they differ in size, grades, development stages, and operational status,” said Hayes. “This diversity mirrors the concept of a diversified investment portfolio, which balances various assets to mitigate risk and achieve steady growth.”
A well-diversified investment portfolio includes a mix of stocks, bonds, and other assets. “A cluster mining model includes a mix of various grade, size, mining method and life of mine. This diversification helps to ensure that if one mine experiences a downturn, the others can offset its losses. Additionally, by having mines in different stages of development, companies can manage downtime and ensure a more consistent supply of copper, “Hayes said.
Simply put, the cluster mining model provides valuable insight into the sector. By spreading investments across various assets, it can reduce risk and increase the likelihood of long-term success. “It undoubtedly aids in ensuring a balanced portfolio that mitigates risk and maximises returns.”
Higher-grade mines often likened to blue-chip stocks, offer significant returns due to their rich copper content.
Medium-grade mines, like mid-cap stocks or moderately risky bonds, provide a steady, reliable output that stabilises the overall production of the cluster. While they may not offer the highest returns, they contribute to a balanced portfolio.
Lower-grade mines, comparable to low-risk investments like government bonds, may not be as profitable, but they serve as a safety net during times when high-grade mines are underperforming or undergoing maintenance. Their consistent, albeit lower, output ensures a baseline of production.
“Exploration-phase mines, while potentially risky, represent investments in the future, much like start-ups or long-term bonds. These investments may not yield immediate returns, but their potential growth and future contributions are essential for the long-term sustainability of the cluster,” noted Hayes.
Hayes said that by carefully balancing these different mine types, cluster mining operators can create a resilient portfolio that is better equipped to provide consistent grade and tons ensuring a sustained production flow. In addition, the model ensures that not all production or capital is tied to a single, high-risk operation. “When one mine experiences production challenges, the steady output from the other mines provides a buffer, ensuring continued stability and cash flow,” said Hayes.
This strategic balance of a cluster of copper mines is key to achieving long-term success, just as it does in a diversified investment portfolio.
