Noranda buys into smelter

The growing Chilean copper smelting business has attracted Noranda Metallurgy.

The company, a unit of Noranda, (TSE), has agreed to buy a 24.8% interest in Fundicion Refimet, operator of the Antofagasta smelter in the copper district of northern Chile. The investment will cost Noranda US$29.5 million.

Refimet’s current owners, a consortium of Chilean investors and Barrick Gold (TSE), will see their interests diluted to 50.1% and 25.1%, respectively. The cash infusion from Noranda’s equity purchase, combined with a planned debt financing, is expected to provide about US$43 million for expansion of the smelter and improvements to its sulphuric acid recovery rates. Its copper production capacity will increase to 158,000 from 90,000 tonnes of anode and blister annually. Sulphuric acid capacity will be increased to 272,000 tonnes a year.

Noranda Metallurgy President David Goldman says smelting operations are poised to expand as new sources of concentrate come on stream. He describes the planned program as “one of the lowest-cost smelter capacity expansions in the world.”

An earthquake in late July caused some damage in the port city of Antofagasta, holding up 30,000 tonnes of copper at the dock. However, the smelter suffered only minor damage and was out of service for only two hours.