With base metal prices at multi-year lows, this is not a good time to be coming to market with new production. Nonetheless, the huge Antamina copper-zinc project in Peru achieved commercial production in early October, some four months ahead of schedule and slightly under budget.
At a projected capital cost of US$2.3 billion, including acquisition, Antamina is one of the largest greenfields mining projects ever built. Compania Minera Antamina is the operator, with ownership shared among
Perched high in the northern Peruvian Andes at an elevation of 4,300 metres, about 270 km north of Lima, Antamina is the largest combined copper-zinc mine in the world. By commodity, it is the seventh-largest copper mine and the third-largest zinc mine.
However, low metal prices have forced the partners to cut sales forecasts for next year. The mine is now expected to generate US$700 million in sales revenue in its first year of operation, down from original projections of US$1 billion, according to David Moore of Teck Cominco’s newly formed exploration business development department. Speaking to an audience of investors in Vancouver, he said the original estimates were based on a copper price of US95 per lb. and a zinc price of US55 per lb.
At a daily design capacity of 70,000 tonnes of ore, Antamina is scheduled to average, on an annual basis, 306,000 tonnes copper (contained in 1 million tonnes of copper concentrate) and 283,000 tonnes zinc (contained in 490,000 tonnes of zinc concentrate). These figures apply to the first 10 years of a mine life that is expected to exceed 22 years. Cash costs are to average US29 per lb. copper (net of byproduct credits) in the first 10 years and US35 per lb. over the entire life of the mine.
Commissioning and startup began in late May and, by the beginning of October, the mill had treated more than 6.7 million tonnes of ore and produced more than 314,000 tonnes of copper concentrates. The mill has operated at or above the design throughput rate for a significant period of the startup and is currently achieving projected recoveries.
The concentrates are pumped along a 300-km-long slurry pipeline to the de-watering port facilities at the coastal town of Huaraz. The partners report that the pipeline and port facilities have operated at or near design capacity and that more than 210,000 tonnes of concentrate have been shipped by boat.
Antamina is polymetallic skarn-hosted deposit, unusual in its persistent mineralization and predictable zonation. It has a southwesterly strike length of more than 2,500 metres and a width of up to 1,000 metres. The deposit lies mainly between 3,790 and 4,350 metres of elevation. The skarn is generally zoned around central monzonite porphyry intrusive bodies.
The deposit is being mined using conventional open-pit methods. To gain access to the mineralized levels, operators prestripped 107 million tonnes prior to starting up the concentrator in May. Part of this waste material will be used in the construction of the tailings dam, which will be built to a final height of 230 metres over the life of the mine.
Proven and probable reserves are pegged at 559 million tonnes grading 1.24% copper, 1.03% zinc and 0.029% molybdenum. plus 13 grams silver per tonne, using a cutoff grade of 0.7% copper-equivalent. The waste-to-ore stripping ratio is 2.7-to-1. The final pit will be 1.7 km in diameter and 465 metres deep. Low-grade material, assaying between 0.7% and 1% copper-equivalent, will be stockpiled for possible processing at the end of the mine life.
The coarse-grained nature of the mineralization and a low iron sulphide content makes the deposit suitable for processing by conventional flotation methods.
Run-of-mine ore is put through a gyratory crusher in the pit and delivered by conveyor through a 2.6-km-long tunnel to the concentrator. The coarse ore discharges on a radial stacker that feeds either of two stockpiles, each of which has a 50,000-tonne live capacity. The front end of the concentrator plant utilizes primary and secondary closed-circuit grinding consisting of one 11.5 by 6.4 metre semi-autogenous-grinding mill and three 7.3 by 10.7 metre ball mills.
The ore is then fed through rough and cleaner flotation circuits to produce separate copper and zinc concentrates, grading 30% and 54%, respectively. The copper concentrates will be treated in a reverse-flotation circuit to recover a separate moly concentrate and remove a bismuth-lead concentrate.
Six ore types
The Antamina deposit contains six different ore types (two major, four minor) that will mined and milled in separate campaigns. The ore types have been classified based on the proportion of copper, zinc, bornite and bismuth mineralization. The mine will deliver individual ore types to the mill in campaigns of 7-20 days. The dual coarse ore stockpile design permits segregation of mill feed.
The mill will produce two standard chalcopyrite copper concentrates containing either low or high bismuth, a bornite copper concentrate with high bismuth, a zinc concentrate, and a moly concentrate.
The slurry pipeline to the coast will operate in batch mode, with different concentrates separated by a 60-minute water buffer. The high-and low-bismuth chalcopyrite concentrates will be blended at the port facilities to produce a final marketable product. The molybdenum concentrate, at only 6,500 tonnes per year, will be trucked from the mill site.
Rio Algom and
Rio and Inmet saw the potential to increase this resource and spent US$60 million on drilling, engineering and feasibility studies. In the process, they quadrupled reserves to just under 500 million tonnes. The feasibility study was completed in March 1998 and called for a 70,000-tonne-per-day conventional open-pit and milling operation.
With the September deadline looming, in the midst of the spreading Asian economic meltdown, Inmet realized it would be unable to finance the project and sold its half-interest to Teck and Noranda for US$48 million plus future payments equivalent to 3.3% of free cash flow from the project. Noranda picked up a further 12.5% interest from Rio on an earn-in basis.
The new partners pressed for engineering changes to the original feasibility study, most notably pipeline transportation (as opposed to trucking the concentrate to the coast), which was deemed environmentally safe.
In mid-September 1998, the stakeholders announced their intentions to proceed with development. They managed to line up US$1.32 billion of committed project financing in June 1999 and, at the same time, brought Mitsubishi on board with a 10% interest. The share holdings of Rio and Noranda were reduced to 33.75% each, leaving Teck with 22.5%.
Two separate banking syndicates representing 17 commercial lenders provided US$640 million of the total loan, with the US$680-million remainder covered by a group of five import-export credit agencies. The project was expected to generate a leveraged rate of return of at least 15%, based on copper and zinc prices of US95 and US55 per lb.
Long-term concentrate sales contracts have been signed, representing 85% of production from smelters and refineries worldwide.
In November 2000, Billiton acquired Rio Algom, and seven months later merged with BHP. Teck merged with Cominco in June of this year.
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