BHP bets billions on Chile mines to face global copper crunch
BHP detailed to investors this week plans to spend $10.7 billion to $14.7 billion within about 10 years.
Chile’s state-owned copper giant, Codelco, will make a decision on the construction of an underground mine at its Chuquicamata operation before the end of this year, said CEO and Executive President Diego Hernandez in an interview with Business News Americas.
Early works at the project, currently in its feasibility stage, have started and are calculated to cost the company US$ 234 million, said Codelco at the beginning of March. These pre-development efforts include a series of earthworks and major excavations, such as tunnels that are access roads for both workers and to transport minerals, shafts and drifts for clean air intake and air removal, mine ramps and other support works, such as water networks, power supply, telecommunications and part of the industrial facilities.
The future underground section of the Chuquicamata mine will access a reserve calculated at 1.7 billion tons of copper ore, and will have an annual production capacity of 340,000 tons of fine copper and more than 18,000 t of fine molybdenum. It is expected to enter production in 2018.
What’s driving the move to underground mining is the cost factor, as “Mining from the open pit has become unviable,” told Hernandez to Bnamericas.
Due to the age of Chile’s mines, Codelco needed to go deeper in its open pits, as the cost of waste removal continues to grow. There is also a need to get more ore out of existing mines since, for legal and political reasons, the state-run company cannot buy new ones.
Currently, Chuquicamata, which is located 1,650 km north of the Chilean capital of Santiago, is the largest open pit copper mine in the world. It started operations in 1910 and forms the core of Codelco’s Chuquicamata division, which also includes a second open pit mine, Mina Sur.
