How can changing metal prices affect whether a mineral deposit is mined?

Changing metal prices directly influence whether a mineral deposit is considered an ore reserve and thus economically viable to mine.1

The decision to mine depends on the break-even grade, which is the concentration of a mineral where extraction and processing costs equal the revenue generated. This calculation is sensitive to market fluctuations:2

• Rising Prices: As the selling price of a mineral increases, the break-even grade effectively lowers. This allows lower-grade material—previously classified as waste—to be reclassified as profitable ore, thereby increasing the total amount of exploitable reserves.21
• Falling Prices: Conversely, if market prices drop, the break-even grade rises. Material that was once profitable to extract may no longer cover the costs of mining and mineral processing. If costs exceed revenues, a mine may be forced to cease production entirely, as the deposit no longer qualifies as an ore reserve.21

Ultimately, a deposit is only an ore deposit if it can be exploited at a profit, making price volatility a primary factor in operational viability.1