Overview
Chile is the world’s largest copper producer and hosts about 30% of the globes known copper resources and accounts for over 35% of global copper production. Chile produced 4.19 Mt of copper in 2003 and 5.47 Mt is forecast for 2004. The country’s copper production accounts for 40% of the world’s annual output, with state owned Codelco remaining one of the country’s largest copper producers, producing 74% of the country’s copper in 2003 compred to 33% in 2002. Codelco sells 17% of its copper to China, followed by the US, France and South Korea for the other 30%. Prior to the 90’s, Codelco had the monopoly on all mining prospects in Chile – however interest from foreign investors found Codelco entering several joint ventures.
In an effort to stabilise the price of copper, BHP Billiton through Escondida, and Codelco overall, both lowered production in real terms from their original estimates. BHP Billiton reduced output by 160,000 t (November 2001 to December 2002) and Codelco by 100,000 t. Escondida has extended this flexible cut-off approach into 2003, where, subject to a review in June and combined with heavy maintenance scheduling at the older Los Colorados concentrator, its anticipated production of 1.25 Mt will be reduced by 200,000 t. Codelco has taken a different approach, resuming the traditional cut-off method for reasons not purely economic, and storing 200,000 t of its anticipated production of 1.6 Mt in its own warehouses until the market justifies its release for sale. Other copper producers are observing the effect of these approaches, especially Anglo American and Noranda who maintain their international copper offices in Santiago.
Antofagasta’s Michilla mine, produces 50,000 t/y of copper cathode, and earned a reprieve at the beginning of the year by getting cash costs down below US$0.60/lb, and development plans involving its patented Cuprochlor process are being evaluated. The expansion of Pelambres from 120,000 to 175,000 t/d for an additional 100,000 t/y of copper, remains under review. In 2002, the mine produced 324,600 t.
At Quebrada Blanca in Region I, Aur Resources completed its US$20 million run-of-mine (ROM) leaching project to raise production from 75,000 t to 80,000 t/y of cathodes. Production in 2002, however, was 4,200 t below forecast, mainly due to severe winter conditions at the 4,400 m altitude mine.
BHP Billiton operates two mines. Cerro Colorado received approval from the environmental authorities for a US$41 million expansion from 100,000 t to 130,000 t/y of cathode copper, by the retreatment of tailings and various infrastructure improvements. At Escondida the Phase IV expansion construction was completed and the ramp up to 237,500 t/d was effected by April of 203. This will compensate for falling grades, and, for the first five years, annual copper production will increase by 400,000 t to 1.25 Mt. The feasibility study for the US$535 million Escondida Norte open pit, 5 km to the north, is under way. A prefeasibility study for the low-grade sulphide dump leaching project, valued at US$435 million, has also been completed.
Principal expenditures for Codelco were at El Teniente and Chuquicamata Divisions. At El Teniente the Programme for the Delecopment of El Teniente (PDT) expansion project advanced to 76% completion with US$636 millionauthorised out of the total US$736 million. Production will be increased from 380,000 t to 500,000 t/y by 2005; with parallel environmental projects, the total expenditure will approach US$1.1 billion. At Chuquicamata a US$12 million contract was signed with SNC-Lavalin of Canada and Paul Wurth of Luxembourg in November, though preliminary work had started in June; the project is expected to take 33 to 35 months to change to the Falconbridge permanent cathode process, as well as other fine-tuning measures. This is part of an US$195 million project to raise production from 683,000 t to 1.08 Mt/y of copper. The first-stage completion to 855,000 t is expected during 2005.
Participating Organisations
Anglo American plc
Anglo has a 44% interest in the Collahuasi opencast copper mine, along with Falconbridge (44%) and the remainder a Japanese consortium. Anglo also has a 100% interest in the Mantos Blancos operation, consisting of two open pit operations.
Aur Resources
Aur has a 76.5% interest in Quebrada Blanca mine as well as a 70% interest in the Andacollo mines in Chile.
BHP Billiton Limited
BHP Billiton is a major partner (57.5%) in the world’s largest copper mine, Escondida located in the Atacama desert.
Falconbridge Limited
Falconbridge has a 100% interest in the Lomas Bayas mine and nearby Fortuna de Cobre copper deposits in Chile.
Fujian Zijin Mining Group
Phelps Dodge Mining Company
Phelps Dodge have an 80% interest in the La Candalaria copper mine, located in the Atacama Desert of northern Chile. Phelps Dodge has a 51% interest in the El Abra copper mine, that is located in the Antofagasta region of Northern Chile.
Rio Tinto Plc
Rio Tinto has a 30% interest in the Escondida copper mine located in the Atacama desert in Chile.
