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THE Precious Metals: Copper Thread (merged)

Discussions about the economic and financial ramifications of PEAK OIL

Re: Andes holds treasure trove of copper, silver, gold, and

Unread postby thylacine » Wed 10 Sep 2008, 01:20:08

In situ leaching (ISL) works for some uranium deposits, such as roll-front style where the uranium mineralised horizon is hosted in permeable sands sandwiched between less permeable clays or silts i.e. you can keep your leaching solutions reasonably well constrained, circulate them through a permeable host and retrieve them once they've done their work. As for porphyry copper deposits: that's a different kettle of fish! I don't know of any working ISL in a porphyry system. It might work in theory on the higher grade weathered/altered/enriched layer that often blankets this type of deposit. Once you're down into the lower grade, disseminated, granitic-hosted primary mineralisation you'd have a hard job circulating fluids around and dissovling metals.

This is where modern mining has taken us. The easy to get at, high grade deposits have for the most part gone. Everywhere the story's the same: chasing lower grades and or going deeper. This works while you've got abundant cheap energy.

Escondida, Chile (LARGE copper porphyry deposit)

The mine, which produces close to 10% of the world’s copper supply, has been hampered in recent times by lower grades, labour unrest and power woes.
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Re: Andes holds treasure trove of copper, silver, gold, and

Unread postby Starvid » Wed 10 Sep 2008, 08:13:05

thylacine wrote:So, the Andes are prospective for copper, moly, silver and gold. Who would have thought it! All that lovely metal sitting in "undiscovered porphyry copper deposits".

Seriously though, these deposits (when they're finally found!) tend to be very large, the majority of the ore is low grade and the mines are only economic if you've got access to abundant cheap energy to mine and process them.

Extremely low grade copper mines are profitable today.

In the Aitik copper mine in Sweden copper ore with a grade of only 0.31 % is mined. They are investing almost a billion dollars in expanding it.

An engineer I know who works with designing mining equipment told me that a friend of his who makes enrichment equipment for mining told him that the Swedish mining industry is quite uninterested in the new far more energy efficient equipment they've designed - because energy is still so damn cheap.

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Aitik copper mine, Sweden.
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Copper as currency after a crash

Unread postby Questionmark » Sat 16 Jan 2010, 21:03:45

While gold prices soar to new heights I predict that it will be copper coins, specifically pre 1982 pennies and nickels, that become the main form of currency in the U.S. after any sort of economic collapse. Gold and silver may be worth more but copper coins are much more common and still in circulation. Part of this prediction is also based on the behavior of the Chinese during the Yuen dynasty. For those of you who aren't familiar with pre modern Chinese history; China experienced hyperinflation as well as their second market revolution under Mongol rule. The inflation was due to the government printing unbacked paper money in order to pay off debts. As a result, the Chinese reverted to using coins that contained various amounts of copper depending on when they were minted.

I guess I'm trying to say that anybody that's buying precious metals would probably get more use out of nickels than they would gold or silver if hyperinflation or economic collapse were to occur. They may be worth more but it's doubtful that they'll be the first choice for a new currency when copper is already in use.
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Re: Copper as currency after a crash

Unread postby Tyler_JC » Sat 16 Jan 2010, 21:25:20

Here's the problem with that:

If a nickel is worth 5X its previous value, it is still only worth 25 cents. If a penny is worth 5X its previous value, it is still only worth 5 cents.

Any kind of large purchase would require bags and bags of these coins. As it stands, no one uses pennies and almost no one uses nickels.

How many nickels are people really going to hold on to?

Moreover, if nickels were really worth 5X their face value, they would quickly become melted down. The few that remained (just like the few remain silver dimes) would become too illiquid for trade.
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Re: Copper as currency after a crash

Unread postby Questionmark » Sun 17 Jan 2010, 14:24:40

You're assuming that the value of the coins would remain tied to the value of the dollar. If hyperinflation were to occur then the dollar would simply be abandoned. At that point we would need a new, more stable currency, to replace it so that we can maintain any sort of market economy. Once the dollar is worthless, people will no longer assign value to coinage relative to the dollar. A loaf of bread will no longer cost 2 dollars, but x(weight) of copper and so it may only end up being a handful of nickels depending on how scarce it turns out to be. So it's not that people will simply replace paper dollars with tons and tons of coinage, but that prices will be set in copper as opposed to dollars. Eventually, as things stabilize, copper would be phased out as a more reliable paper currency is introduced. In China for example they went from paper money, to copper after hyperinflation, to silver, and then back to paper money.

I'm not saying anybody should trade their gold or silver in for copper, but that it's highly unlikely that gold and silver will come to be the main form of currency after any sort of economic crash or hyperinflation. More than likely, you'll have to trade in your gold for copper to buy anything much in the same way you have to trade in gold for cash right now.
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Re: Copper as currency after a crash

Unread postby Tyler_JC » Sun 17 Jan 2010, 14:33:27

But why would copper go up in value relative to bread?

It takes 250 pennies to buy a loaf of bread. If the value of the copper equals the face value of the coin, that's 250 cents.

But regardless, we're still looking at 250 pennies worth of copper equaling one loaf of bread.

If hyperinflation hits, 250 pennies worth of copper will still equal one loaf of bread. That's an awful lot of pennies.
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Re: Copper as currency after a crash

Unread postby dinopello » Sun 17 Jan 2010, 14:37:29

You're right, anything that is easy to identify, hard to forge and easily transportable could become a new medium of exchange. Although I see as more likely, new, local currencies popping up that are agreed upon and circulated in a local or regional area. In that case, pennies or any other widely distributed item might not be good as a local currency because someone could come in from outside with truckloads.
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Re: Copper as currency after a crash

Unread postby Questionmark » Sun 17 Jan 2010, 15:11:00

Tyler_JC wrote:But why would copper go up in value relative to bread?

It takes 250 pennies to buy a loaf of bread. If the value of the copper equals the face value of the coin, that's 250 cents.

But regardless, we're still looking at 250 pennies worth of copper equaling one loaf of bread.

If hyperinflation hits, 250 pennies worth of copper will still equal one loaf of bread. That's an awful lot of pennies.


Right now it takes 250 pennies to buy bread because the face value of each penny is 1 cent and the price of bread is 2 dollars and 50 cents. If hyperinflation were to hit then bread will no longer be bought in dollars and cents but in various weights of copper. At that point it's the copper that vendors are after and not the face value of the penny. If demand for copper goes high enough then things like bread may only cost a few ounces of copper.
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Re: Copper as currency after a crash

Unread postby Outcast_Searcher » Sun 17 Jan 2010, 15:12:39

Tyler_JC wrote:If hyperinflation hits, 250 pennies worth of copper will still equal one loaf of bread. That's an awful lot of pennies.


Precisely right Tyler - copper is too plentiful to be practical for this.

This is why, IMO, for the folks forecasting doom and wanting to have a convenient tradable medium, junk silver coins make a lot of sense.

A junk silver dime or quarter might be a reasonable medium to trade for small items like a meal, for example.

Gold is great as a long term store of value, but I don't see hauling around kilogram bars fo gold (to trade for what?) as being very practical in a doom scenario). However, for a slow crash or to hedge against the long term demise of the dollar - that's another story, IMO, which is why I have a nice stash of gold bullion coins.
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Re: Copper as currency after a crash

Unread postby Questionmark » Sun 17 Jan 2010, 15:15:39

dinopello wrote:You're right, anything that is easy to identify, hard to forge and easily transportable could become a new medium of exchange. Although I see as more likely, new, local currencies popping up that are agreed upon and circulated in a local or regional area. In that case, pennies or any other widely distributed item might not be good as a local currency because someone could come in from outside with truckloads.


It would take a lot of time and effort to establish new local currencies. I agree that eventually we would be back to using some sort of paper money (not current USD), but I'm talking about what's most likely to replace the dollar right after hyperinflation hits and the dollar is abandoned.
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Re: Copper as currency after a crash

Unread postby Questionmark » Sun 17 Jan 2010, 15:24:09

Outcast_Searcher wrote:
Tyler_JC wrote:If hyperinflation hits, 250 pennies worth of copper will still equal one loaf of bread. That's an awful lot of pennies.


Precisely right Tyler - copper is too plentiful to be practical for this.

This is why, IMO, for the folks forecasting doom and wanting to have a convenient tradable medium, junk silver coins make a lot of sense.

A junk silver dime or quarter might be a reasonable medium to trade for small items like a meal, for example.

Gold is great as a long term store of value, but I don't see hauling around kilogram bars fo gold (to trade for what?) as being very practical in a doom scenario). However, for a slow crash or to hedge against the long term demise of the dollar - that's another story, IMO, which is why I have a nice stash of gold bullion coins.


Currency needs to be plentiful enough for most people to at least have some of it already. Silver is no longer in circulation and so not many people would have it right after any sort of collapse. Besides, copper has much more utility than silver or gold.
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Re: Copper as currency after a crash

Unread postby Tyler_JC » Sun 17 Jan 2010, 15:27:19

Questionmark wrote:
Tyler_JC wrote:But why would copper go up in value relative to bread?

It takes 250 pennies to buy a loaf of bread. If the value of the copper equals the face value of the coin, that's 250 cents.

But regardless, we're still looking at 250 pennies worth of copper equaling one loaf of bread.

If hyperinflation hits, 250 pennies worth of copper will still equal one loaf of bread. That's an awful lot of pennies.


Right now it takes 250 pennies to buy bread because the face value of each penny is 1 cent and the price of bread is 2 dollars and 50 cents. If hyperinflation were to hit then bread will no longer be bought in dollars and cents but in various weights of copper. At that point it's the copper that vendors are after and not the face value of the penny. If demand for copper goes high enough then things like bread may only cost a few ounces of copper.


A pile of copper is worth one loaf of bread.

If you want copper to be currency, you need the relative value of copper to rise.

A collapse would make copper more abundant, not less abundant.

The value of copper relative to bread will drop. Meaning, it will take MORE copper to buy bread, not LESS.

How much copper would I need to buy a bicycle?

Modern pennies are only 2.5% copper and 97.5 zinc.
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Re: Copper as currency after a crash

Unread postby mattduke » Sun 17 Jan 2010, 15:38:18

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Copper makes a pretty good money for smaller transactions.
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Re: Copper as currency after a crash

Unread postby Questionmark » Sun 17 Jan 2010, 15:48:43

Tyler_JC wrote:
A pile of copper is worth one loaf of bread.

If you want copper to be currency, you need the relative value of copper to rise.

A collapse would make copper more abundant, not less abundant.

The value of copper relative to bread will drop. Meaning, it will take MORE copper to buy bread, not LESS.

How much copper would I need to buy a bicycle?

Modern pennies are only 2.5% copper and 97.5 zinc.


How would a collapse make copper more abundant? That's the same as saying that silver or gold would become more abundant.

And even if that were true, the value of copper can still go up if demand outpaces supply. Which it would if people were to begin using copper as currency. But the truth is that if a collapse were to occur and the dollar was abandoned, then the copper supply would steadily decrease as people began hoarding it or melting it down.
Last edited by Questionmark on Sun 17 Jan 2010, 16:02:43, edited 1 time in total.
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Re: Copper as currency after a crash

Unread postby hardtootell-2 » Sun 17 Jan 2010, 15:57:10

Speaking of copper, utility and holding value- I would guess that copper wire (say 14/2) in sufficient quantities would be a great barter item. It is relatively light, recognizable, it doesn't go bad and it is very useful. It is widely available now and unless you bought a truckload, it would not raise any suspicions. I'd wait until the double dip hits and then buy. Maybe from an electrical wholesaler going bust?

Another useful value added commodity IMHO would be sheet metal roofing. It is possible to stack a lot of it in a small space.
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Re: Copper as currency after a crash

Unread postby Tyler_JC » Sun 17 Jan 2010, 16:33:07

Gold would become more abundant in the event of an economic collapse. At least over the short to medium term.

Think of how many wedding bands, gold watches, necklaces, etc. would be melted down and sold for scrap.

The world extracts around 3800 tons of gold a year. The above ground supply of gold is well over 160,00 tons.

We only increase the global gold supply by around 2% per year through mining. That's not a big increase.

Moreover, much of that gold is mined in places that wouldn't necessarily collapse at the exact same time as the United States.

Even assuming no new gold mining (a ludicrous assumption but whatever), the American middle class as a large gold stockpile that it would be rapidly converting into groceries in the event of a major economic depression/collapse.

It's a similar case for copper. Much of the world's copper is used in industrial processes and manufacturing. This economic recession created a huge surplus of copper as demand for copper dropped.

Even if we stopped extracting as much copper from the Earth, demand would drop rapidly as the electronics industry collapsed.

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If we aren't building lots of new houses and we aren't producing a lot of new cars and electronic toys...copper demand will crash.
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Re: Copper as currency after a crash

Unread postby Revi » Sun 17 Jan 2010, 20:51:48

Pre-1982 pennies are worth about 2 cents each, so you would need only 125 of them to get a loaf of bread. That's a little over a dollar.

Post 1982 pennies are worth about a half a cent each, so the barter price would be around 500 of them to get a loaf of bread.

Check out the value of the change in your pocket here:

http://www.coinflation.com

The only coin that is being minted now that is worth as much as it says on it is the nickel. It's now 75% copper and only 25% nickel, but it's worth about 5 cents again.
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Re: Copper as currency after a crash

Unread postby dinopello » Sun 17 Jan 2010, 21:12:39

Melt value of a dime is less than 2 cents so spend those ASAP!

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Re: Copper as currency after a crash

Unread postby Questionmark » Sun 17 Jan 2010, 22:49:55

Tyler_JC wrote:...

It's a similar case for copper. Much of the world's copper is used in industrial processes and manufacturing. This economic recession created a huge surplus of copper as demand for copper dropped.

Even if we stopped extracting as much copper from the Earth, demand would drop rapidly as the electronics industry collapsed.

...

If we aren't building lots of new houses and we aren't producing a lot of new cars and electronic toys...copper demand will crash.


http://www.telegraph.co.uk/finance/comm ... ystem.html

1. It's not as if it's the U.S. that's creating the demand for all that copper in the first place. So assuming that copper demand would collapse along with the USD is inherently flawed.

2. Once any sort of PO induced collapse were to occur, we would need to rapidly develop new energy tech and rebuild/update our energy grid. This is something that will require a whole lot of copper.

3. Collapse doesn't necessarily mean that we're re entering the stone age. While ipod sales may plummet, electronics are an integral part of modern life and it's unlikely the electronics industry will entirely disappear and free up a 3rd of the copper supply.

4. Utility is great but not the sole or even main reason that people would look to copper as a transition currency. Like I've said all along, people will most likely turn to copper because it is plentiful. There needs to be enough of it for most people to have some so that people can still participate in the economy and trade for goods and services they need/desire. Do you really expect most of the population to sit by the sidelines and refrain from trade just because they didn't buy bullion before a collapse? And like I said before, the Chinese fell back on copper coins that were already in circulation during the Yuen dynasty, and copper was used for almost nothing at that point in history.
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