Critical Mineral Spotlight: Copper (Part 2)

Key Takeaways

Welcome to Part 2 of PostLinear’s crash course on copper mining. In Part 1 we laid out the basic science behind copper extraction and some of the reasons it’s difficult. Now we’ll look at the industry more broadly, its pain points, and its opportunities. We’ll wrap up with a current market map and a high-level analysis of historical exits in the space.

For investors that may be used to software and business model plays, breaking into the world of mining requires a change of mindset. As one CVC described it, mining represents “the extreme tangible versus the extreme intangible.” This is not Silicon Valley’s playground. You can’t scale with two computers in a garage, nor can you burst onto the scene like Uber and push everyone else out of the water. This is the hardest of hard tech, the least flexible, the most challenging – not just physically, but socially, too. It’s not impossible to find your way in, but it’s not for everyone, either. Let’s explore why.

Like petrochemicals and other heavy industries, above-board mining places worker safety at the top of the list of priorities. (Highly dangerous and exploitative mines obviously exist, but we’d hope that none of our readers are interested in investing there.) Social license to operate (see Section 2.2) in the United States and other highly regulated areas requires a commitment to safety that cannot be compromised. According to one industry veteran, 50% of mining fatalities are the result of unplanned work, so all operational changes must be fully planned and thoroughly understood well in advance. As such, layer upon layer of administrative checks and studies result in a very slow risk assessment process for any new technology. Parallels can be drawn to interconnecting new capacity and loads to the US electrical grid, for which the feasibility studies can take years. We’ll get deeper into that in a future article.

On top of safety concerns, which we do not quibble with, there is an insular culture within the mining majors. The mining industry is hundreds – arguably thousands – of years old. The weight of centuries instills great inertia in the community, and the assertion that “outsiders” don’t know enough about mining is taken as gospel. One industry expert emphasized that this perspective causes almost all innovation to be considered negatively from the get-go. Viewing problems with fresh eyes is not necessarily welcomed. This presents a massive challenge to startups that do not have long-time mining insiders on their teams. The young rockstar entrepreneur who follows the “move fast and break things” model is firmly persona non grata here. Anyone who does not understand this dynamic is destined to have a very hard time.

Last but not least, there are economic concerns. Any extractive process has a finite amount of value accessible within the asset. There is only so much copper, oil, coal, or lithium in the ground at any given site, and so the total production amount has a fixed maximum. The profitability of the mine therefore depends on two things: the price of the commodity, and the efficiency with which the material can be extracted. Commodity prices cannot be controlled without breaking antitrust laws, so innovation in the space must focus on process efficiency and the challenges surrounding it.

Note that “efficiency” does not mean “high speed”. Mining assets are optimized for low-risk shareholder returns, gradually excavating at a pace that meets demand without flooding the market. Operations are designed and built around a stable rate of production, and cannot be easily sped up. This is a fundamental misalignment between mining incumbents and the venture-funded startups trying to disrupt the status quo. Pressure from equity investors drives young technology companies to move as fast as possible, and going slowly – even with good reason – is not accepted. Startups and incumbents are operating under very different economic paradigms, and as discussed above, this results in a major culture clash.

Mining insiders approach any project knowing that there will be cost and time overruns. The plan of how to approach extraction – including the type and location of equipment – is based entirely on a predicted model of the distribution of the ore, developed from sampling and computer algorithms (see Figure 1). And as the saying goes, all models are wrong. While work is constantly ongoing to improve data collection methods and modeling software, there is currently a limit to how accurate the “map” of the underground asset can be. If there is any mismatch between the model and reality, which there will be, the operators will have to move things around, dig in different directions, and generally take more time to dig than was originally hoped.

Beyond the guaranteed difference between the model and reality, there are always unexpected problems that occur once mining begins. Maybe there is a large boulder in the way that needs special handling. Some spoil might collapse in an inconvenient location. Equipment might break, severe weather might flood the area, a local teenager might sneak in at night and get in trouble. With so many moving parts, there are myriad ways for things to go wrong, and every hiccup costs time and money. Smart project planners include these hiccups when penciling out the economics, and they’re still most likely going to be underestimates. A report from McKinsey found that “cost and scheduling challenges affect 83 percent” of major mining projects, with cost overruns at billion-dollar sites of over 79% of budget and delays of over 50%. Hardly what you’d call a well-oiled machine.

While we expect there to be a sharp increase in the price of copper due to rising demand and strained supply, historically, mine sites have had tenuous profit margins. Those margins have been shrinking – one member of the mining ecosystem estimated that copper mining is 40% more expensive “than it used to be” (no benchmark date was given) due to increased costs of energy and water. In some cases it is more economically responsible to temporarily shut down a mine’s operations than continue shifting rock that’s worth less than it costs to shift. “Care and maintenance” mode can last for years until the economics of extraction pencil out again – or, sometimes, forever, to avoid the cost of closure and remediation.

With all these risks to the economics of a mine site it is no wonder that operators resist any interruptions to their work whatsoever. Delaying field operations to set up a technology pilot is a guaranteed cost with uncertain benefit. Even if a complete suspension of work is not required, diverting people and equipment still slows down the main process train. At minimum, overseeing the pilot and external team will distract the supervisor from other tasks. More realistically, additional personnel will be needed to keep track of how the pilot affects recovery rates or operational efficiency.

A final note on the economics of innovation: because mines are planned to have long lives, and the very expensive equipment is expected to last, new equipment has a double financial challenge to overcome. The startup must prove that their new way not only pays for itself, but also pays for the asset that it will leave stranded. If a mine operator spent $50 million on, say, a bucket-wheel excavator expected to last 20 years, a $2 million widget intending to replace it at year 4 had better bring at least $52 million (minus depreciation and plus decommissioning cost) of value, or it is only damaging the site’s already thin margins.

Part 1 of this primer touched on the fact that every mine site is unique. Section 2.1 above mentioned how the distribution of the ore is hard to predict. Let’s now look at how difficult this and other variables make the landscape for anyone trying to deploy “at scale.”

First: the landscape itself. Many mines are located in remote, mountainous areas. Chile, the world’s largest copper-producing nation, contains a good portion of the Andes mountain range. Numerous large copper mines are located in the high-altitude northern reaches of the country. The Escondida mine sits in the Atacama desert 3100 meters above sea level; Chuquicamata is another enormous mine in the area at 2850 meters. El Teniente and Los Pelambres are also both at elevations over a kilometer, but Chile doesn’t have a monopoly on mountains. The Grasberg copper mine in Indonesia is situated near the 4800-meter Puncak Jaya, and Bingham Canyon Mine is 1800 meters high in the Oquirrh Mountains of Utah. Others at lower elevations are simply a long way away from major infrastructure. Wherever they are located, copper mines (all types, really) need huge amounts of energy, fuel, and water as well as the ability to get tremendously large equipment to and from the site. The logistics of such an endeavor are not trivial, and construction of a large, remote mine can run into the billions of dollars.

Next is the nature of the orebody. It is increasingly rare to find large deposits of a single copper-bearing mineral nicely concentrated in one spot. The distribution and composition of ore depends on the unique geology of the location. There is no such thing as “standard-issue” here. Planners can predict some aspects by drilling samples across the site and sometimes using sophisticated underground scanning methods like those deployed by the oil & gas industry (see Figure 2). However, the precise type of equipment and its layout need to be determined from scratch based on the evidence every time. The variability in the mixture and concentration of ores, not to mention the potential presence of deleterious elements, means that the extraction process must be tailored to the site to ensure optimal efficiency. Small wonder, then, that any proposed changes to the process must prove themselves so thoroughly on large samples.

An additional layer of complexity comes from the sociopolitical environment in which the mine operates. Some areas are more accepting than others of the resource needs of a large mining operation. Issues of community welfare are also paramount. Protests in Panama, Peru, Serbia, and other nations have proliferated in the last few years; locals blocked exports from a Rio Tinto mine in Mongolia as recently as this June. The inciting reasons vary from environmental concerns to noise complaints to disputes over ownership and equitable distribution of wealth. One expert in the field explained that good governance, particularly in cases where the state is a major shareholder, is crucial to ensuring license to operate. Joint public-private ownership where the state shareholders also grant the permits is a recipe for corruption, which can trigger all sorts of political problems. Another aspect to bear in mind is that many mines are located in areas held sacred by indigenous peoples. Without getting too far into the ethics of this (message Ariel if you want to go deep), we can take a lesson from Rio Tinto’s 2020 destruction of Aboriginal caves in Australia that led to the resignation of the presiding CEO. Executives must balance their responsibility to their shareholders with their responsibility to be good neighbors.

All these unique and often moving pieces must be considered when undertaking the years-long process of opening a mine. With so much variation between sites, it is difficult to come up with a single solution that will easily slot into multiple operations. Investors hoping to support a new technology or business model should weigh not only the physical realities of getting to scale, but whether the proposed changes would be acceptable to the host nation and communities around the mine. Priority should be given to projects that don’t just improve profitability, but also do not damage the social license to operate.

It is common knowledge to the point of stereotype that the further from detailed operations a manager gets, the less they understand about how work gets done. At one end of the chain of command, the C-suite is focused on compliance, reporting, and keeping shareholders happy. When you leave the corporate offices and get to the mine site, though, people are more concerned with putting food on the table and finishing their shifts with all their fingers. This disconnect and mismatch in priorities can result in a failure to communicate effectively. And at an operating mine, a lack of communication can be a matter of life and death.

A longtime operator detailed to us an assessment of the safety culture and management systems at a mining company with a number of very large, complex operations. The business had recently experienced a series of significant safety events, including fatalities. The assessment team reviewed numerous themes at the operations, one of which was to understand how management standards, performance requirements, and expectations were communicated, understood, and implemented in the line. The principal focus was to understand the consistency of messaging and understanding from the top as these are cascaded down into the organization. Do the people executing the work have the same understanding of expectations and operating practices as those who set the tone from the top? If there are inconsistencies, where are they occurring? What are the organizational factors influencing the work environment to be inconsistent? What was clear in the findings was that front line supervision and workers were overwhelmed by the pressure to produce; middle management struggled to ensure that all the critical controls for a stable operation were in place; and senior management were receiving a dwindling number of useful insights as to what was actually occurring on the ground. When the front line struggles to meet expectations, the pressure to produce can promote mistakes, priorities can be inappropriate, and unexpected outcomes can occur. The pressure to achieve can be overwhelming, and good communication from the top, through middle management, and to the workforce often deteriorates. Even worse, the nature and extent of this deterioration is often not realized or well-understood.

In the case of the fatality events, why was it so difficult to stop when problems arose? Why were the operators on the ground not able to get management to listen? This isn’t something a shiny new technology can fix – quite the opposite. Only by deeply understanding the status quo and its limitations, and promoting constant honest conversation between management and the people delivering the value, can a mine site remain safe and operational. This is a problem of structural power. People who fear for their livelihoods are less likely to speak up when something doesn’t work. People who are not listened to won’t share their insights about problems and how to solve them.

As an investor in technology that hopefully will change the industry, this is an extremely difficult thing to diligence. How can you expect to gain visibility into the internal politics of such an opaque organization as a mining major? Thankfully, this is not directly your problem. Your job, when considering a deal in copper (or any type of mining), is to evaluate the startup’s ability to navigate this environment. Do they have an industry insider on the team or advisory board? How does leadership treat employees? A C-suite that doesn’t trust or take feedback from their own hires might do a poor job interfacing with the mine workers who will ostensibly use the new tech. It doesn’t matter how good the science might be – without the trust of those workers, any pilot is all but guaranteed to fail.

Glibly: don’t.

But if you must try, the most important factor in changing an existing mine is buy-in from the people doing the work and using the equipment. It’s entirely possible that they already have some great ideas on how to improve operations, in which case, just listen. In circumstances where there is resistance, emphasize how the change will improve everyone’s day-to-day. For example, to create a more inclusive workforce, one large mining company rewrote some operating procedures so that physically smaller people could do tasks that had previously required great height and body mass. This change was intended to improve working conditions for women, which was achieved. An unexpected and not insignificant consequence was that these improved work practices benefited many other workers as well. There were fewer injuries, especially back-related, across the entire workforce when performing those tasks. Keeping the workforce’s wellbeing top priority not only reduces safety hazards, but means that your change is more likely to be adopted on the ground. The predictability, reproducibility, and sustainability of good results is directly influenced by operating culture. As an investor looking for opportunities, make sure the startup’s leadership team has the operators’ best interests in mind, not just the return profile.

We mentioned in the Introduction that the culture of the mining industry favors experience. Therefore, any startup wishing to introduce something new needs to not only do their homework, but also have trust relationships with industry players from the beginning. It’s smart for any new endeavor to identify good product-market fit up front, but for mining, a deep understanding of the industry’s pain points is a must. An investor evaluating an opportunity shouldn’t look for the traditional hallmarks of “disruptive” change, as the incumbents are likely to reject such proposals on principle. As discussed in Section 2.1, disruption is anathema to an operating mine.

Instead, look for technologies that integrate seamlessly into what’s already there. Pilots that can be set up during routine maintenance have a better shot at being deployed than ones requiring additional work stoppage. Plugging modular tech into existing equipment is less difficult than constructing entirely new infrastructure. Any opportunity to make the addition or transition easier and safer is worth taking.

When dealing with copper or other precious metals that involve heap leaching, the heap is far easier to mess with than any other part of the process. After all, it mostly just sits there. But easier doesn’t mean easy, and deployment of a chemical or biological alteration to the leaching solution will still require many tests including large columns on the scale of tons (not to mention subsequent tests by customers to ensure the final product still meets spec as well). Innovators say it can take years to get permission to do a pilot on a full-size heap, and industry insiders agree that the pilot itself will take at least a year to complete. As mentioned in the previous article, a startup should be parallel processing several pilot opportunities at once. Trying to do things in series is a great way to burn cash.

If altering current operations is tough, what about incorporating new ideas into greenfield projects? It still won’t be a walk in the park, but there’s a significantly better argument to be made. Let’s walk through the main opportunity areas.

Starting at the beginning of the process: there is room to improve upon exploration and underground scanning. Better sensors and data processing methods can reduce uncertainties and risks in the planning stage of mine development. Several companies already offer equipment and software to allow for faster and better decision-making around where and how to dig, but the more accurate and precise you can be in predicting where the best ore is, the more money the project will save. Ground-penetrating radar and other ways to “see” underground without having to dig are particularly valuable.

Next up is breaking rocks. We’ve come a long way from handheld picks and shovels, but “modern” technology still relies heavily on mechanical drills and chemical explosives. Advances in these areas have centered on automation and finer-tuned control over blasts. However, recent developments have seen startups offering such novel methods as lasers, pressurized CO₂, plasma, and electrical pulses to assist in cracking Mother Nature’s vaults. “Surgical” mining is also on the table, which reduces environmental impact and can allow access to small deposits that wouldn’t be worth mining traditionally.

Once you’ve got a hole and a pile of rubble, it’s time to work on extraction. The methods detailed in Part 1 of this article are limited in applicability: heap leaching of sulfides is slow with a low recovery rate, and any copper deposit with significant amounts of arsenic or uranium in it is untouchable without a way to handle and dispose of those elements safely. Arsenic in particular is a challenge, as it must be prevented from going airborne (as it does when smelted) or escaping dissolved in waste water (a problem with solvent extraction). There exist add-on technologies like exhaust scrubbers and ferric reagents that can treat waste streams from pyro- and hydrometallurgical processes respectively, but these represent additional capex and opex on top of the cost of the original equipment. New extraction chemistries are being tested that can separate insoluble arsenic more cost-effectively. If they prove economical, these methods can potentially allow access to copper reserves not currently being worked due to extreme contamination.

Finally, there’s the aftermath. If this article’s emphasis on the industry’s speed (or lack thereof) has cooled you on the concept of investing in mining innovation, this category might be more your style. Tailings from mining can be described as “potentially toxic wet slurry waste” that is often stored behind dams, which are prone to failure with disastrous results. Concern over the problem of tailings is valid and growing, but there is opportunity here as well. Tailings often still contain trace amounts of valuable minerals that with sufficiently advanced methods can be recovered. Even the critical-mineral-free leftovers can be used in construction or as backfill. An example of creative tailings handling comes from the Canadian startup Exterra: while their feedstock is the remains of asbestos mining rather than copper, their methods of deriving value from toxic waste represent the potential for remediation-as-a-business writ large. An advantage to this space is that companies whose feedstock is problematic waste will face far fewer cultural roadblocks than those trying to change operating mines. However, it may be a case of trading one slow stakeholder for another. Governmental entities may come into the picture when toxic waste is concerned. In the US, this might be the EPA or state Departments of Environmental Protection. There are two sides to this coin, though: permitting and grants. A remediation company will likely need special permits to operate, which takes time. But with a strong enough social-good value proposition, there may be nondilutive funding on the table.

There are a few mining companies that dominate the headlines: the BHPs and Rio Tintos of the world. These are companies whose strategy is to own the largest upstream assets for the longest period of time – assets requiring hundreds of millions or even billions of dollars to acquire and develop. While someone with a passing interest in mining might be able to name five or so, the media presence of the majors is misleading. Worldwide and across all mining sectors, there are hundreds of mining companies of all sizes, from diversified conglomerates to single-site “artisanal” holdings. The “juniors” make up the bulk of copper production; of an estimated 23 million metric tons of copper produced globally in 2025, the top 10 copper mining companies combined contributed under half (see Figure 3).

It is important to note that while many startup companies emphasize relationships with players in the top 10, the large incumbents are more likely to be slow in adopting new technology. The juniors, especially ones that are looking for an edge, are more willing to try something out of the box – but are also typically less able to afford it. Relying on junior miners as a customer base is also tricky due to their numbers. As we have discussed ad nauseum, every mine site is different. The more individual sites a startup wants to deploy at, the more pilots they’ll have to go through.

The following is a snapshot of young(ish) privately held and venture-backed companies in and adjacent to the copper mining industry as of mid-August, 2026. Publicly traded companies, companies focused exclusively on other metals or electronics waste, and vertically integrated mine site operators (we see you, Mariana and KoBold!) were all excluded from the census. All information was collected from either publicly available sources or PitchBook. Note that some companies have closed more recent deals without making valuations public; these are marked with an asterisk. If you know of someone we’ve missed, message us about it and we’ll add them in!

As evidenced by the valuation distribution, there are a few companies that have a head start over the rest. These are not likely to be investment targets for early-stage investors and angels. The others, while more affordable, have a long road ahead, and must prove themselves to be better than not just the status quo, but also the leading alternatives. Patient capital is needed to make these investments and stick out the long process of piloting and customer acquisition.

Comps analysis and CVC feedback show that M&A has historically been the most likely exit path for a mining tech company. We conducted a mineral-agnostic PitchBook survey for mining tech companies that had exited between 1990 and the present. When the holders and operators of mining assets (i.e., “mining companies”) were removed from the search results, there was a cohort of 187 companies that provided technology of one kind or another for the mining industry. Some were mining-specific while others had multiple types of customer; most offered hardware or extraction processes, but a few were software-exclusive. Software companies that provided office or logistics services were removed, leaving only those that addressed exploration scanning data or operation of heavy equipment (e.g., collision avoidance programs for autonomous trucks). As shown in Figure 4, three-quarters of the cohort exited by M&A.

Examining the company ages was not particularly useful. Of the 164 entries that had data for both founding year and exit date, the mean age of company at exit was 27 years – but the range was between 1 and 142 years, and standard deviation was 24 years. We cannot therefore draw useful comparisons to existing trends in the age of startups at exit. See Figure 5.

Of the 187 exits listed in PitchBook, only 61 had publicly announced prices. Of those 61, 48 (77%) were by M&A, including the four largest. Exits under $20M were the most common (see Figure 6), but there were two companies acquired for over $1 billion: Eddyfi Technologies and Waygate Technologies. Both of these produce testing and inspection equipment for a range of industries, not just mining.

These data don’t look great for potential venture returns. But will the future look like the past? We don’t think so. Most of the companies analyzed were offering either standard equipment or small improvements on operations. For example, one company specialized in flat hoses for narrow spaces, while another sold sensors to keep track of worker health and safety. Two manufactured industrial explosives. A handful were described as recovering valuable residue from wastewater, but we did not chase down the exact methods used. Overall, the cohort was not chock-full of revolutionary ideas that would significantly increase mine yield or open the way for processing arsenic-heavy ore. Contrast the innovators in Section 4.2: the novel extraction techniques especially have huge potential to address real pain points in the industry and unlock billions of dollars in value. Thus, we believe that success in the next decade will look very different from success in the prior three, with a higher average price for successful exits and potentially more IPOs.

We hope you have enjoyed this exploration of copper mining and the industry that surrounds it. If it has left you with more questions – good! There’s a lot we didn’t cover in this introductory primer. As with our other pieces, the point is to equip you to ask the right questions in diligence, but in this case an additional objective is to help you decide whether the mining industry is the right target for your investment goals in the first place. Patience is key. If your strategy is to find quick exits, mining tech may not be for you. If, however, you are passionate about the space and empathetic to the hardworking folks whose lives you aim to change, you might find this a rewarding path.

Kevin O’Kane, Independent Director at IntelliSense.io and NorthIsle Copper & Gold; formerly BHP, Minera Escondida Ltda., and others

Hanh Disch-Le, JD, Founder/MP/GC at Strategic International Management LLC and advisor for Endolith; formerly Rio Tinto, Vale, and others

Natalie Cira, Principal at HG Ventures; formerly BHP Ventures

Holly Bridgwater, Director at Unearthed; formerly Northern Minerals, Deep Yellow Limited, and Image Resources NL

Opinions expressed here belong solely to us and do not reflect the views of any past or present employers. No AI was used in researching or writing this article. Republished with permission.