Why Copper and Gold Mining Matters for Gold Investors

Gold investors who focus solely on gold prices might miss half the picture. Copper-gold deposits help gold miners overcome the depletion dilemma they are facing, creating opportunities that extend beyond traditional gold-only operations. Understanding the relationship between copper and gold mining reveals strategic advantages that can significantly impact investment returns.

The Natural Partnership of Copper and Gold

Gold and copper are grouped together in the middle of the periodic table (separated in Group 11 by silver) and these elements are frequently found together in nature. This geological reality shapes modern mining economics in profound ways.

Over 600 mines in the world produce copper, and 52% include gold in their output. The largest producing gold mine in the world, the Grasberg mine in Papua, Indonesia, is primarily a copper mine. This surprising fact underscores how intertwined these metals have become in mining operations worldwide.

About 6% of domestic gold was recovered as a byproduct of processing domestic base-metal ores, chiefly copper ores in the United States alone. Nearly one-quarter of the gold in undiscovered resources was estimated to be contained in porphyry copper deposits, and in 2014, copper mining produced about 15 metric tons of gold, worth $600 million, which represented 7% of US gold production.

How Byproduct Accounting Transforms Gold Economics

The economics of copper-gold mining fundamentally change the cost structure for gold production. Here is why.

The copper and moly by-products are mined, processed and sold with by-product revenues put against production costs. This allows the gold company to mine the gold at three-quarters the cost of a gold-only deposit, or half, even 100%. New Gold’s New Afton mine, west of Kamloops, B.C., produces twice as much copper than gold, in dollar terms, allowing the company to report extraordinarily low mining costs.

Mines where the byproduct makes up a significant amount of production by revenue or even a majority can drive the costs into negative numbers. This accounting method creates a competitive advantage for diversified miners. New Afton reports negative all-in sustaining costs because of “byproduct accounting,” a method that takes revenue gained from copper sales and credits it against the mine’s costs.

Gold miners using copper by-product accounting, the cost of gold production is usually way below the industry average. This cost advantage becomes particularly valuable during periods of gold price weakness, providing a financial cushion that pure gold miners lack.

The Copper Supply Crisis Creates Opportunity

Global copper markets face unprecedented challenges that create strategic advantages for copper-gold miners. With demand set to rise more than 40 per cent by 2040, copper supply is under severe strain. Based on current and planned mining projects, the IEA forecasts that the world would face a 30% copper supply deficit by 2035 under the Stated Policies Scenario.

Several factors drive this supply-demand imbalance. The boom in artificial intelligence is pushing up the need for both microprocessors and power-hungry data centers. As market share shifts toward electric vehicles, the batteries and wiring of EVs require more copper than conventional powertrains do. Twice as much copper is used in an electric car as in an average conventional fuel vehicle, and more than eight tonnes of copper is used in offshore windmills.

Operational issues and legal disputes have impaired mining output, and new deposits are proving more difficult to find. Since 1991, average ore grades have fallen by 40%. Developing new mines is a slow and expensive process, and fraught with environmental risks often taking up to 25 years from discovery to operation.

Strategic Benefits for Gold Investors

Gold investors gain several advantages from understanding copper-gold dynamics. Let’s break it down.

Lower Production Costs: Companies with significant copper production maintain competitive advantages through byproduct credits. Barrick Gold revealed significant gains in the fourth quarter of 2024, with gold production increasing by 15% and copper production by 33%. The company benefits from copper’s contribution to overall economics.

Portfolio Diversification: Copper provides counter-cyclical benefits to gold holdings. Copper tends to rise in price when economic growth is strong. Gold, on the other hand, is seen as a store of wealth when times are tough. This natural hedge helps stabilize returns across economic cycles.

Growth Potential: The global copper mining market size was valued at USD 9.26 billion in 2024 and is projected to grow to USD 13.15 billion by 2032, exhibiting a CAGR of 4.58%. Gold miners with copper assets participate in this growth trajectory.

Reserve Replacement: Barrick, and other major gold miners, need copper-gold deposits to help them overcome the depletion dilemma they are all facing. Gold grades have been declining since 2012, meaning more ore has to be blasted, crushed, moved and processed, to get the same amount of gold.

Evaluating Copper-Gold Mining Investments

Smart gold investors should analyze several factors when evaluating copper-gold operations.

Production Mix: Understanding the revenue contribution from each metal helps assess risk and opportunity. Using 2019 production data and metal prices as of October 2, gold contributes 5.4% of the production revenue at the top 20 copper mines. The ideal mix depends on your investment goals and market outlook.

Geographic Considerations: Over half of global copper reserves are located in just five countries: Chile, Australia, Peru, the Democratic Republic of the Congo and the Russian Federation. Political stability and regulatory frameworks in these jurisdictions affect long-term viability.

Processing Capabilities: Just one country China imports 60% of global copper ore and produces more than 45% of the world’s refined copper. Companies with integrated processing facilities capture more value from their production.

Market Timing: LME copper prices are projected to slide toward $9,100/metric tonne in the third quarter of 2025 before stabilizing around $9,350/mt in the fourth quarter. Understanding copper price cycles helps optimize investment timing.

Next Steps for Gold Investors

The convergence of gold and copper mining creates compelling investment opportunities for those who understand the dynamics. Here is why.

Goldman says the disruption has shifted its 2025 global copper balance from a projected surplus of 105,000 tons to a deficit of 55,500 tons, following recent supply disruptions. This tightening market supports both copper prices and the economics of copper-gold operations.

Central banks in developing countries have remained the primary force driving gold prices, with China purchasing over 2,800 tons of gold from overseas in the last two years. This sustained demand for gold, combined with copper’s essential role in the energy transition, positions copper-gold miners favorably.

Major mining companies recognize this opportunity. Barrick reported a 224% year-on-year increase in attributable copper mineral reserves, reaching 18 million tonnes at 0.45% grade. This aggressive expansion into copper-gold assets signals industry confidence in the strategy.

Conclusion

Gold investors who ignore copper mining miss significant opportunities. The natural occurrence of these metals together, combined with favorable byproduct economics and growing copper demand, creates a compelling investment thesis. As global copper supplies tighten and gold maintains its role as a monetary hedge, companies operating copper-gold mines offer unique advantages.

The future belongs to miners who can leverage both metals effectively. The new, big gold mines are going to come out of the young geologies of the world. And in young rocks, gold comes in association with copper. Understanding this relationship and its financial implications positions investors to capitalize on one of mining’s most important trends.

For gold investors seeking sustainable competitive advantages, copper-gold operations merit serious consideration. The combination of lower production costs, natural portfolio diversification, and exposure to critical metal markets creates value that pure gold plays cannot match. As the energy transition accelerates and gold maintains its monetary role, this dual-metal strategy becomes increasingly relevant for forward-thinking investors.