Project Spotlight: Chile & Ecuador
Chile – Codelco’s Salvador division
With direct production costs of US$1.85/lb of copper, Salvador is the least profitable of the seven operating divisions of Chilean state copper miner Codelco.
In production since 1959, the complex includes the Inca underground mine and open pit mines Campamento Antiguo and Quebrada M. Mining of the three deposits is due to end in 2021 because of depletion. The unit also includes the Potrerillos smelter.
However, in 2010 copper prices rebounded and Codelco halted the closure process and Codelco decided to build the Rajo Inca open pit project to extend its mine life by 40 years.
Last year, Rajo Inca’s environmental impact assessment was admitted for permitting and if approved construction should start during 1H20. Investment is put at around US$1bn and once in operation Rajo Inca could double production of fine copper to 90,000t.
Rajo Inca also involves optimizing the concentrator plant and copper oxide facilities and a larger tailings dam. The project could generate 2,000 jobs.
Among other benefits, Rajo Inca will have high mining standards, which will allow sustainable development of the business. For this, the division is already preparing the operational, process and cultural transformation that it needs to complete in order to increase productivity and in this way make feasible the project that has an ore grade of 0,59%.
Ecuador – Fruta del Norte Production
Ecuador’s government will open the country’s second large-scale mining project next week. Lundin Gold’s Fruta del Norte, in southeastern Ecuador, is set to produce 310,000oz of gold and 400,000oz of silver annually. Today, the whole country produces 284,000oz of gold.
Fruta del Norte is one of two game-changing projects for Ecuador, the official said. Five years after its discovery, the project hosts 5Moz of gold and 7Moz of silver and the surrounding communities have endorsed the jobs and educational programs offered by the Canadian mine operator.
The company said it awarded a contract for the mine’s grinding facilities to Outotec, milling and other packages to FLSmidth, crushing facilities to TelSmith and electrical installations to ABB. Caterpillar will provide underground equipment.
Lundin Gold will invest US$670mn in the project by 2021, while the amount committed for the next 15 years is US$2.7bn.
Ecuador – Other Exploration Projects
Ecuador’s deputy mining minister Fernando Benalcázar said that the first large-scale mining project went into production in June but has turned out to be a “headache for the government,”
Owned by a Chinese consortium led by Tongling Nonferrous Metals Group, the Mirador copper-gold project has been suspended three times since construction due to workers’ safety issues. “For the operators, safety is not a priority and we had to make big efforts to tell them that Ecuador has rules to follow,” the official said.
Mirador has a mine life of 27 years with
Another three projects are due to be in production from 2024: Cascabel, Cangrejos and Llurimagua.
Australian SolGold’s Cascabel porphyry copper-gold project hosts three times Mirador’s reserves and five times Fruta del Norte’s. The underground mine is due to start production in 2027 or 2028 and planned investment by 2021 is US$182mn.
Operated by Canada’s Lumina Gold, the Cangrejos gold-copper project involves planned investment of US$24mn by 2021 and US$37mn by 2024. With 8.5Moz of gold and 500,000t of copper in reserves it is expected to produce 373,000oz/y of gold and 19,000t/y copper over 30 years. “Lumina’s team has found new resources and they will soon make the announcement,” added Benalcázar.
Llurimagua is the third project that could go into production in the coming years. The copper-molybdenum deposit is a joint venture between national mining company ENAMI EP (51%) and Chilean state copper company Codelco (49%).
The project hosts more than 14Mt of indicated and inferred resources and Codelco has so far invested US$60mn in more than 100,000m of drilling.
“Today, the Llurimagua deposit is completely different than in 2015. The Junín target lead us to discover 1km continued mineralization,” said Codelco’s exploration team leader Angelo Aguilar.
By 2021, Llurimagua’s planned investment is put at US$131mn.
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