Optimizing critical mineral extraction and processing in single and joint production

In the context of the energy transition, efficient ore extraction and processing are essential to support clean energy technologies. This study investigates the economic and operational factors shaping the cost structures of single (e.g., copper) versus joint metal producers (e.g., copper and cobalt produced simultaneously). Notably, it addresses the following key questions: What parameters influence the costs of these production systems? Under what conditions can joint production provide cost advantages? How does scaling up ore processing impact cost dynamics?

Using an optimization-based economic model, we show that cost dynamics for single metal producers are influenced by unit costs, tax rates, and output elasticities. In contrast, joint production is further shaped by technical efficiency and metal demand. Our empirical analysis, based on data from 427 mining projects producing copper and two critical metals, i.e. cobalt and nickel, reveals that joint producers typically face higher costs than single metal producers. Our model indicates two novel pathways for cost reduction: enhancing the relative output elasticity of the secondary metal (cobalt or nickel) or achieving economies of scale by increasing ore-processing capacity.

By integrating theoretical modeling with real-world data, this study provides actionable insights and novel frameworks for optimizing metal production to meet the growing demands of the energy transition. Our findings offer a foundation for developing operational benchmarks and designing cost-effective, sustainable metal production strategies.