BHP Billiton and Rio Tinto to boost Chilean copper production
Two projects to support higher ore production have been approved at the Escondida copper mine in Chile, owned 57.5% by BHP Billiton (BLT) and 30% by Rio Tinto (RIO).
The announcement came as Escondida experienced "successful" brownfield exploration and accelerated in-fill development drilling programmes, resulting in a 17% increase in the mineral resources and a 25% increase in the ore reserves.
"The success of our brownfield exploration programme suggests there are sufficient resources at Escondida to sustain production at current levels for more than a century," said Peter Beaven, base metals president at BHP Billiton.
"We expect the completion of the current Escondida Ore Access and Laguna Seca de-bottlenecking projects, and a strong recovery in ore grades, to support a substantial recovery in Escondida copper production to over 1.3 million tonnes per annum in the 2015 financial year," he added.
The first project, the Organic Growth Project 1 (OGP1), will replace the Los Colorados concentrator with a new 152,000 tonne per day plant. It will also allow access to higher-grade ore located underneath the existing facilities. Construction will begin in February 2012 with commissioning anticipated the first half of the 2015 calendar year. The total project will cost $3.8 billion (£2.4 billion), $2.2 billion paid by BHP Billiton and $1.2 billion by Rio Tinto.
"OGP1 is the first of a series of potential projects that could substantially expand processing capacity at Escondida and help ensure it remains the world's leading copper operation for decades to come," commented Beaven.
The second project, the Oxide Leach Area Project (OLAP), involves the creation of a leaching pad and mineral handling system. OLAP is expected to cost $721 million with commissioning anticipated in the middle of 2014. BHP Billiton and Rio will pay $414 million and $216 million respectively.
Rio Tinto's investment is expected to be funded through the company's share of Escondida's cash flows.
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