(Kitco News) --In the 1999-2010 period, 62 significant copper discoveries were made, but just 6% of those finds have been upgraded to reserve status, limiting the amount available for near-term production, said a metals research group on Wednesday.

Further, some of those that were upgraded to reserves are low grade and half of the copper in the discoveries are located in regions of medium to high political risk, said the Metals Economics Group in a research paper, “Strategies for Copper Reserve Replacement 2011.”

The group defines a significant copper discovery as a deposit containing at least 500,000 metric tons, and the total tonnage found during the time frame was 229.1 million tons of copper in reserves, resources and past production. The Americas account for the greatest share of copper in these finds. This is no surprise since the Americas is home to most of the discovery-oriented exploration spending, they said.

Also in the study, the group said that the top 23 global copper producers – that is, those who mined at least 145,000 tons of copper in 2010 – replaced nearly 290% of the copper they produced. “Almost all these companies have added enough reserves to keep ahead of production, maintaining strong pipelines of projects to ensure stable or increased copper production,” Metals Economics Group said.

These producers have increased their aggregate annual production by 26% over the past 10 years to 11 million tons in 2010, which is 68% of world mine production, and as of year-end 2010 they held sufficient reserves for 34 years of output at the 2010 rate.

This increased output, however, means they must add more to reserves, they said. Based on 2010 production, the major producers each need to replace and average of 480,000 tons of copper in reserves annually.

By Debbie Carlson of Kitco News dcarlson@kitco.com

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