Copper smelting and refining

Detailed research by the Commodities Research Unit (CRU) reveals a wide variation in direct operating costs at copper smelters and refineries. The cost curve for smelters is almost a straight line, indicating that so far there has been no levelling of costs as there has been in the mining industry. Operating costs at smelters using reverberatory furnaces are well below costs at plants using modern technology, but this apparent paradox is shown to be a reflection of location. CRU argues that costs are an important determinant of smelter/refinery competitiveness, but that other factors such as location and tariffs are also significant. Operating margins world-wide show enormous variations, but companies' increasing interest in their processing operations, coupled with changes in tariffs, are predicted to lead to a much more competitive market.