A US$138-million expansion of the Tintaya copper operations in southern Peru will take production beyond the current 90,000 tonnes per year, rising to 124,000 tonnes in 2002 and 130,000 tonnes in 2004. The mine’s cash operating costs are expected to be lowered to under US50 per lb. copper.
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“The Tintaya oxide project will deliver significant returns to shareholders and represents the first step in a broader plan to extract value from the extensive resources in the region,” says Pickering. The expansion will include a new solvent extraction-electrowinning (SX-EW) plant, which will initially produce 34,000 tonnes of cathode copper per year. After two years of operation, production will increase to 40,000 tonnes.
Construction of the project will begin immediately, with first production slated for mid-2002. “The project risk is low,” states Pickering. “Plant technology is proven, engineering design is approximately 90% complete, and a large portion of the required reserves has already been mined and stockpiled.”
At June 2000, proven and probable sulphide reserves at Tintaya stood at 53 million tonnes grading 1.56% copper, equivalent to 693,708 tonnes of recoverable contained copper. Oxide reserves totalled 22 million tonnes grading 1.44% acid-soluble copper, equal to 248,350 tonnes of recoverable copper.
The Tintaya oxide development is the first of several projects in the Tintaya area being evaluated by BHP. Over the past three years, regional inferred resources have grown significantly, with the delineation of several outlying deposits.
The largest resource, Antapaccay, which lies 10 km southwest of the Tintaya pit, is undergoing a prefeasibility study. Antapaccay has an estimated resource significantly larger than the original Tintaya resource. In addition, BHP is conducting scoping studies on the Coroccohuayco resource, 9 km southeast of Tintaya.
Escondida expansion
At the same time, approval has been granted for a US$1.04-billion phase-4 expansion project at the Escondida copper mine in northern Chile. Escondida is the world’s largest copper mine, with production representing over 9% of the global copper market. The operation produces copper contained in concentrate and in cathode.
Total production for the year ended June 30, 2000, was 920,000 tonnes.
BHP is the operator and owns a 57.5% interest in the mine, which is 160 km southeast of the port town of Antofagasta. The remaining interest is held 30% by
Last June, proven and probable sulphide reserves were pegged at 1.9 billion tonnes grading 1.2% copper. BHP’s share of recoverable contained copper amounted to 19.5 million tonnes.
Escondida began production in late 1990. A series of phased expansions has been carried out over the past decade. Mine and mill facilities support 127,500 tonnes per day sulphide ore. Concentrate is transported through a slurry pipeline to filtration and port facilities at Coloso, south of Antofagasta, for shipment to customers.
Oxide ore is fed to a 140,000-tonne-per-year leach plant, which was commissioned in December 1998.
The ore grade averaged 2.7% copper from startup to the end of fiscal 1997. The head grade is now declining and is expected to be around 1.5% by 2003. Concentrate production declined in 1999. However, total copper production levels were maintained as a result of output from the oxide leach plant, causing an increase in overall production in fiscal 2000.
The fourth phase of expansion includes a new, 110,000-tonne-per-day concentrator designed to increase milling capacity by 85% to 235,000 tonnes per day. As a result, total annual production is expected to average 1.2 million tonnes copper over the first five years of full production. The expansion will allow current cash production costs of US43 per lb. to be maintained at this level for several years.
Construction has begun, with first production from the new concentrator targeted for September 2002 and full production for April 2003.
A key goal of the BHP copper strategy is to increase production by 50% in the next five years and to do so in a manner that delivers significant incremental value and earnings, with low technical risk. Further expansion of Escondida will play a large part in achieving this goal, says BHP, and will form the basis for delivering added value through the potential developments of the Escondida Norte deposit and additional oxide leach projects. Studies for development of Norte, 5 km north of the existing pit, are at the prefeasibility stage.
Escondida Norte contains a total estimated sulphide resource of 1.47 billion tonnes grading 0.88% copper, including an indicated resource of 676 million tonnes grading 1.03% copper. The oxide resource totals 144 million tonnes grading 0.73% copper.
The development concept of Escondida Norte involves the mining, crushing and conveying of the highest-grade ore to one of the two sulphide concentrators and bioleaching of the lower-grade material. A leach pilot plant is currently in operation and commercial-scale demonstration heaps are planned for the near future, the objective being to evaluate the economic potential of producing 100,000-150,000 tonnes of copper cathode per year.
For the half-year ended Dec. 31, 2000, BHP posted a record profit of A$1.43 billion (or A80 per share), up 18% over the corresponding period of 1999.
“This is a solid half-year result that clearly demonstrates our success in positioning the company to take advantage of the upward swing in a number of key commodity markets,” states Managing Director Paul Anderson. “Underlying cash operating costs in our copper, coal and iron ore businesses continue to decrease, and we remain committed to achieving our annual average target of a 2% real reduction in costs over the next three years.”
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