State-run miner Codelco on Thursday paid $520 million for a 10% stake in the Quebrada Blanca copper mine from Enami, another Chilean state miner.
Canada’s Teck Resources owns an indirect 60% interest in QB2 while Sumitomo Metal Mining has a 30% stake. Enami’s share in the mine was non-funding and Codelco will be also protected from dilution in any future capital raisings.
Quebrada Blanca’s expansion – QB2 – is ramping up with a target set by Teck of 285,000 – 315,000 tonnes of annual production by 2026. QB2 reached production of 51,300 tonnes in the second quarter this year, up more than 18% from Q1.
Last year Codelco’s output fell to its lowest lowest level in a quarter century at 1.32 million tonnes. The company has vowed to lift production over the next few years, but so far it has fallen short of its targets.
Codelco’s acquisition of QB2 may not be enough to stave off BHP’s ambitions to become the world’s number one copper producer.
Last week, BHP unveiled plans to increase copper production organically at its South Australia operations, which include Olympic Dam, a 218,000 tonnes per year mine, and two smaller operations: Prominent Hill and Carrapateena.
Together with the Oak Dam project, which is currently in the exploration phase, Melbourne-based BHP expects to raise output in the region to 650,000 tonnes by the middle of the next decade, doubling the 2023 tally of 326,000 tonnes.
BHP’s growth comes amid declining output in Australia over the last decade from 1 million tonnes in 2013 to 788,000 tonnes last year, due to aging mines and depleting reserves, Benchmark Mineral Intelligence reports:
“The outlook worsens with Glencore’s planned closure of the Mount Isa copper mine (70ktpa) by 2025 and the possible shutdown of the Mount Isa smelter (300ktpa anode capacity) by 2030, further challenging the nation’s copper outlook.
“BHP’s ambitious goal hinges on two key exploration projects: Olympic Dam Deeps (OD Deeps), where recent drilling has shown promising copper intercepts, and Oak Dam, which has announced inferred resources of 1,340Mt of ore with a copper grade of 0.66%. BHP’s CEO is confident that these exploration efforts will support the company’s long-term production targets”.
