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METS: Chile and Peru Project Updates

Peru

Peru’s mining sector could be an interesting year with the start-up of the US$1.6bn Mina Justa copper project and construction to begin at six more gold, copper, silver and zinc projects.

Mina Justa is a 60/40 joint venture formed by Alxar, a subsidiary of Chilean holding company Copec, and Peru’s Minsur. The mine is in southern Ica region and is the second largest development project in Peru.

It currently employs over 3,000 people and would generate 1,000 jobs when it enters commercial operation, with a projected mine life of 16 years.

Mina Justa

According to the energy and mines ministry (Minem), works will also begin for the US$136mn Immaculada optimization, in Ayacucho region; the US$590mn Coroccohuayco integration (Cusco region); the US$117mn Pachapaqui expansion (Áncash); and the US$579mn Corani project in Puno. 

Works will also start at San Gabriel, Moquegua region, with investment demand of US$431mn, and at Yanacocha Sulfuros in Cajamarca for US$2.1bn.

We previously provided a more in-depth project overview. See here.

Chile – Santo Domingo

Santo Domingo

Capstone Mining is considering the option to produce 22,600t/y of battery-grade cobalt sulfate from a Chilean copper, iron and gold mine.

Construction at Santo Domingo, 50km southwest of state miner Codelco’s El Salvador mine, is expected to start this year, but the company recently updated its technical report to include an opportunity involving cobalt.

Santo Domingo is controlled by Capstone (70%) and Korea Resources Corporation (30%).

Originally, investment was set at US$1.51bn, but the cobalt complex would raise capex to US$2.18bn. Mine life is 18 years, with cobalt production starting in the third year.

During the first five years of full production, Santo Domingo’s average annual contained copper production is set to be 159Mlb/y, and 263Mlb/y with cobalt. 

Capstone aims to produce 10.4Mlb/y of cobalt in the form of 22,600t/y of battery-grade cobalt sulfate over the mine life. 

The project includes the development of two open pit mines and a copper-iron concentrator with a maximum processing capacity of 65,000t/d. A desalination plant will also be included as the project is 100km from the Pacific coast, providing access to deepwater port facilities. 

“If Santo Domingo was in operation today, refined production of 4,700t/y of cobalt would make Capstone the fourth largest battery-grade cobalt producer outside China, and the largest in the Americas,” Capstone CEO Darren Pylot said in a release.  

In 2019, Capstone received all critical construction permits and the approval of the mine closure plan. Santo Domingo has the potential to improve project economics with infrastructure sharing. 

Chile – Salares Norte

Gold Fields approved the construction of Salares Norte in the Atacama region and plans to start production in 2023. Salares Norte was discovered in 2011 and currently hosts 5.2Moz of gold plus 39.2Moz of silver and 695Mlb (315,000t) of copper. 

Salares Norte will have an 11.5-year mine life and is due to produce an average of 450,000oz of gold equivalent during the first seven years. Construction is set to start in Q4 while permit approvals advance and exploration continues. 

Chile – La Coipa

Kinross Gold said it will proceed with plans to restart operations at La Coipa, also in Atacama region, which were halted in 2013. The original mine life was due to end in 2004 but investments made a nine-year extension possible.  

With capex of US$225mn, Kinross wants to increase reserves and produce 207,000t/y gold equivalent from the new phase 7 deposit. Mine life is put at five years starting in 1Q22. 

The company has said all major permits required to proceed with the restart are in place. The project has potential to extend mine life through satellite deposits, Kinross said. 

Kinross is also producing a prefeasibility study for Lobo Marte, a deposit with more than 7Moz of gold in measured and indicated resources. The project’s initial capex has been put at US$750mn for a mine life of over 10 years. 

Harris Gomez Group is an international law firm with offices in Santiago, Bogotá, and Sydney. Our firm has been working with mining equipment, service, technology providers both in Latin America and Australia for 16 years. We find that our clients appreciate that we understand the industry, provide fixed pricing, and take the time to learn our clients business.

To better understand how we can support you, please contact Cody Mcfarlane at cmm@hgomezgroup.com