BHP gives Chile a $13 billion reason to cut red tape for mines

BHP Group is ready to start spending $13 billion to overhaul its aging copper mines in Chile, but is grappling with red tape, an executive said Tuesday.

“As a country, we must act with a sense of urgency if we want to execute growth projects,” Alejandro Tapia, head of BHP’s Escondida mine, told an industry conference in Santiago. “Competition will be fierce, and Chile cannot lose this opportunity or its leadership position.”

Slow permitting has been a bane of the mining industry for decades, with frustration growing as heightened scrutiny of environmental and social matters coincide with projects getting more challenging and expensive to build. Chile’s government has proposed changes to speed up permitting, but the bill is yet to pass congress.

The Melbourne-based firm said it has the talent and financing in place to begin the pipeline of projects — starting with a $2.3 billion plant upgrade as part of a $10.8 billion pipeline of projects at Escondida, the world’s biggest copper mine.

“We are ready to begin construction this year if we obtain the necessary permits,” Tapia said at CRU’s World Copper Summit.

BHP is also evaluating options to restart its Cerro Colorado copper mine by 2028 at a cost of $1.3 billion. That mine was mothballed amid water supply issues. Another $1.3 billion has been earmarked for its Spence mine while the firm is also testing a new leaching technology.

BHP has said previously that the projects would take production to an average annual rate of about 1.4 million metric tons next decade in Chile. Without the investments, that output would drop to about 900,000 tons.

(By James Attwood)