LATIN AMERICA — Countdown begins at Collahuasi

When full production begins in October, the Collahuasi open-pit project in northern Chile will become the world’s fourth largest producer of copper, yielding 350,000 tonnes of copper concentrate and 50,000 tonnes of copper cathode per year.

The copper project, touted as the largest under development this decade, is owned 44% by Falconbridge (FL-T) and 44% by Luxembourg-based Minorco (MNRC-Q). The remaining interest is held by a Mitsui-led Japanese consortium.

Mineralization at Collahuasi is in two major porphyry bodies that are amenable to open-pit mining. The porphyries, dubbed Rosario and Ujina, are situated close to the Bolivian border in the high Andes, at altitudes of 4,000 and 4,800 metres above sea level, respectively.

Probable reserves stand at a whopping 1.98 billion tonnes grading 0.83% copper, with another 1.12 billion tonnes grading 0.82% copper in indicated resources. The current reserves are enough for 100 years of production at projected rates, though the partners only considered the first 25 years in their feasibility study.

Mining will initially focus on the Ujina pit, which has a stripping ratio of slightly more than 4 to 1. Ujina will be mined until 2005, whe production will switch to Rosario, where pre-stripping is scheduled to begin in 2003.

Commissioning of the 50,000-tonne-per-day solvent extraction-electrowinning plant should begin shortly. It will be followed in July by the start-up of the 60,000-tonne-per-day concentrator. The remaining facilities, including a permanent camp, port facility, and 203-km-long pipeline to move concentrate from the mine to the port are 85% complete.

The mine will more than double Falco’s annual copper production, to nearly 300,000 tonnes from 122,000 tonnes. Currently, the major produces all of its copper from its mines in northern Ontario and the new Raglan mine in northern Quebec. Operations at Raglan began last December, and will add another 21,000 tonnes of nickel, 5,000 tonnes of copper, 200 tonnes of cobalt and significant quantities of precious metals to the company’s production.

Collahuasi’s initial cash operating costs are expected to be US45cents per lb., with total development costs pegged at US$1.8 billion. In 1996, Falconbridge secured US$1 billion in project funding, allowing full construction to begin the following year.

Mining at Collahuasi is expected to cause little harm to the environment, and the vegetation lost will be replaced at other locales. There will also be no harmful discharge from the operation, with neither the concentrator nor port area expected to release water-borne effluents. A monitoring system is being set up to check for changes in air quality, ocean changes, biological disturbances, and the movement of surface and groundwater.