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Fifty years of copper mining: the US labor productivity

Abstract

In the past 50 years, the US copper mining industry has experienced remarkable changes. During the 1970s and early 1980s, the US copper mining industry suffered a major recession. However, a few companies survived by implementing severe cost-cutting measures through innovation and technological changes. These efforts, in turn, helped quintuple labor productivity in the three decades following. Then from 2003 to 2012, labor productivity declined sharply to the levels equal to those of the early 1980s. This decline, following years of rising productivity, has led to questioning the effects of innovation and technological change on mining labor productivity. It has been argued that new technology will no longer be able to offset the adverse effects of depletion thus resulting in higher prices in the future. This study investigates the determinants of copper mining labor productivity empirically, and the extent to which they may vary cyclically for longer time spans (1965 to 2015) from the US perspective. The statistical model examines the level of labor productivity as a function of copper price, recoverable copper content of ore (percentage yield), production share of leaching, mine production index, and time trend. Overall, the results support the conclusion that falling productivity is mostly cyclical.

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Notes

  1. Initiation of leaching in old and new waste-dumps, starting heap leaching of selected low grade ores and in-situ leaching.

  2. Cut-off grade is the minimum grade required in order for a metal to be economically mined.

    $$ \mathrm{Cut}-\mathrm{off}\ \mathrm{Grade}=\frac{\mathrm{Costs}}{\mathrm{Commodity}\ \mathrm{Price}\ \mathrm{x}\ \mathrm{Recovery}} $$
  3. Copper yield is the percentages of recovered copper content which is equal to head grade times recovery rate. The head grade is the average grade of metal that will be fed into the mill of process plant.

  4. \( {\mathrm{MPI}}_i=\sum \frac{Q_{it}}{Q_t}\frac{Q_{it}}{Q_{i65}}100 \);where Qit production of ith mine in year t, Qt total mine production in year t and Qi65 production of ith mine in year 1965 for t from 1965 to 2015 (MPI1965 = 100). The following selected mines: Morenci, Bingham Canyon, Ray, Bagdad, Sierrita, Tyrone, Chino, Mission, Silver Bell, Miami, Pinto Valley, Safford, and Robinson.

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Correspondence to Hamit Aydin.

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This article is dedicated to John Tilton on the occasion of his 80th birthday for his contributions to mineral economics and its use in understanding the behavior of mineral commodity markets, for the patient guidance, encouragement and advice he has provided throughout my time as his student and for his kind and firm friendship.

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Aydin, H. Fifty years of copper mining: the US labor productivity. Miner Econ 33, 11–19 (2020). https://doi.org/10.1007/s13563-018-00167-y

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  • DOI: https://doi.org/10.1007/s13563-018-00167-y

Keywords

  • Mining productivity
  • Determinants
  • SxEw
  • US copper