Mining Investement Analysis - Research Paper Example

ii. Refined copper production differs from mine production. Mine production includes the extraction of the copper ores from the copper mines while refined copper production is derived from mine production. In simple terms, mine production is just the extraction an refined copper from underground or the surface while refined copper production involves refining of copper from the mine production. Even though there is a long standing desire to capture additional economic returns through copper products fabrications, the prospects from the copper in both the short term and medium term are not pleasing.

There exists variability between the productions and selling of copper and copper alloy semi-manufacturers on a significant scale is highly constrained by factors from the demand side and the supply side. Though copper is a major input in the copper fabrication industry, copper faces little competitive advantage from sourcing copper inputs locally. This is because the price of copper is set by the international commodity exchanges and greatly varies little through out the world. If a given country produces copper, a fabricator in the same country may not have much cost advantage when buying copper in another country.

In this case, the maximum cost advantage which the country (the latter) could gain is the cost of shipping the cathode copper to the fabricator in the former county. The fabrication of copper required other raw materials which may not be available in the producing country. As a general rule, the copper industry prefers to use scrap provided that there is supply of acceptability quality and 37 percent of the copper be derived from scrap metal. Many copper products are copper alloys in many countries and only a few of the other metals are required.

The need to import the other metals may be a source of comparative disadvantage for some countries. In some copper producing