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Comment by cogman10 | Hacker News Reader

That's actually a bit wild that Chile isn't refining or smelting copper.

Is it because there's not the energy capacity to run smelters? I thought Chili had a pretty abundant energy grid (mostly hydro as I recall).

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Australia behaves the same way, exports ore to China and buys back the refined products. Both countries have abundant energy (hydro and solar) but have old fashioned mining interests in charge.

Why do the mining interests prefer exporting it to selling to some local processor? you could probably get similar prices and the transport wouldn't be as complex, right?

Given the comparative economies of scale, you would probably get lower quality of product, and potentially higher prices, if a local processor exists at all.

Sure, which is bad for the consumer of copper. But the mining companies don't have an obvious reason to be unhappy about that? the smaller local market won't have any alternative sources and might have to pay them more if it existed so you'd think they would be encouraging some small local smelters or etc if anything. It would be everyone else who buys copper who has reason to be against doing it locally

> the smaller local market won't have any alternative sources

Ea-nāṣir will still receive complaints, presumably.

The cost of refining ore varies widely based on electricity, regulatory, and other costs. Proximity to the end user of the refined product also figures into it. Shipping bulk materials is very inexpensive. Buyers in other countries with low refining costs can pay prices that would bankrupt a local refiner and still make a profit.

This is common for bulk industrial materials. For example, it is cheaper for many countries to send their crude oil to the US to be refined than for them to refine it themselves.

I wonder if they just prefer the bigger contracts that they can (presumably) get from overseas customers? Why negotiate twice, especially if somebody in China says “yes, as much as possible.”

Smelting and other processing of raw materials tends to be a dirty process and might face difficult or impossible permitting and regulatory hurdles locally. Easier to outsource it to a country that is too poor or too corrupt to care.

From 30-second googling: purifying Cu to from rocks to ~99% purity is done by mixing CuFeS2 found naturally with C and CaCO3 and smelting. This yields Cu2S. Then S is released by bubbling with O2. This process releases gaseous SO2. From there, Cu is further purified by electrolysis in CuSO4aq.

The whole process is going to need a ton of coal and calcium carbonate and heat, and you have to have a way to safely dispose of SO2 gases and CuSO4aq liquids. And there don't seem to be anything that sounds safe and clean about this process.

SO2 is typically scrubbed and used to produce sulfuric acid. It's not a _clean_ process, but its waste stream is fairly well-controlled.

The amount of carbon used in the reaction itself is totally neglibile, compared to other overheads.

Extraction and metallurgy are different problem domains. Vertical integration can be more profitable, but not when regulatory burden is high. What you’re seeing is an arbitrage of regulatory costs. The government is much more tolerant of ecologically hazardous in industrial processes in the Australian government. I don’t want to go into why that is, but I think most would accept that as true.

isn't it literally the same company, Rio Tinto?

These systems aren't in place by accident. The US doesn't typically purchase roasted coffee beans or chocolate bars from South America either.

Roasted coffee loses flavor after roasting.

Chocolate requires various ingredients to make that changes the characteristics of the chocolate. It also, famously, doesn't ship well.

Copper ingots, however, weigh less than copper ore and if they are actually too low quality they can be resmelted into a more pure level.

The only reason I can think of why you might actually want the ore is you also want and are extracting other secondary minerals.

> Is it because there's not the energy capacity to run smelters?

Most mines are in the north, but the hydro capacity is far from them in the south. That's one challenge, but to me doesn't explain why. Chile nationalised copper with aims to develop our industry, but then the US decided to sabotage our democracy.

https://en.wikipedia.org/wiki/Comparative_advantage

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