Batu Hijau ships first concentrates

Partners Newmont Mining (NEM-N) and Sumitomo have shipped the first 30,000 tonnes of concentrates from their massive Batu Hijau copper-gold mine in Indonesia. The shipment was destined for smelters in Japan.

Ownership is split 45-35 between Newmont and the Japanese-based major; a local Indonesian company holds the remainder.

Construction began in 1997 and was completed more than a month ahead of schedule and US$130 million under budget. Total capital costs amounted to US$1.8 billion.

The open-pit operation is mining at more than 300,000 tonnes per day and should produce 615 million lbs. copper and 515,000 oz. gold annually over a mine life of 20 years.

During the first five years of operation, the mine is expected to account for 2.5% of the world’s copper output.

Newmont will receive 56.25% of the income from Batu Hijau until it has recouped its construction costs plus interest.

Reserves stand at 11.8 million oz. gold and 10.6 billion lbs. copper within 910 million tonnes grading 0.4 gram gold and 0.52% copper.

Copper and gold mineralization is associated with porphyry-related intrusions into a volcanic carapace. Ore mineralogy consists chiefly of copper sulphide and gold, found in thin quartz veins.

The ore is crushed and conveyed over 6 km to the concentrator, where it is ground in a semi-autogenous grinding mill and two ball mills. After flotation, the concentrates, which average 32% copper and 27 grams gold per tonne, are piped to a port facility for transport. The tailings are deposited on the seabed, more than 4 km below the surface.

Although the first shipment is headed to Japan, the mine has long-term sales agreements with copper smelters in Korea, Australia and Europe.