Lundin Mining becomes majority owner of Caserones copper mine

Lundin Mining (TSX: LUN) has completed the acquisition of a majority stake in the company that operates the Caserones copper-molybdenum mine in Chile, the world’s largest producer of the metal.

The miner, which now owns a 51% of Casserones, said it had obtained commitments for a three-year term US$800-million loan, which it plans to use towards an additional 19%.

The Toronto-based miner inked in March a US$950-million deal with JX Nippon Mining & Metals Corp. to acquire up to a 70% stake in the Japanese firm’s subsidiary Lumina Copper, which is Caserones’ operator.

“With the addition of Caserones, Lundin Mining adds another long-life copper mine of meaningful size with significant growth potential to our portfolio of high-quality assets,” chief executive, Peter Rockandel, said in a statement.

He noted that on a pro-forma basis and including Caserones, Lundin Mining’s operations produced over 191,000 tonnes of copper in the first half of this year. 

The mine is located at an altitude of 4,200m to 4,600m above sea level in Chile’s Atacama desert, just across the border from Argentina’s San Juan province.

The operation has suffered a series of ramp-up delays and cost overruns since it began producing in May 2014. Its annual production of roughly 100,000 tonnes still falls short of the 150,000 tonnes a year intended when construction of the mine began.

The company believes there are opportunities to improve the life-of-mine plan at Caserones, as it showed in a technical report filed this week.

The operation is 160 km from Lundin’s Candelaria mine and only 20 km from the Josemaría project, in Argentina. This proximity, according to the company, introduces synergies and additional savings in terms of supply, logistics and management strategies not yet reflected in the life-of-mine plan.

The miner, Canada’s third-biggest copper producer, said it believed the mine has significant exploration potential within the over 585-sq.-km land package.

Caserones produced 69,704 tonnes of copper and 2,393 tonnes of molybdenum in the first half of the year on a 100% basis. Copper production was comprised of 61,333 tonnes of concentrate and 8,371 tonnes of cathodes.

Lundin expects to churn out 60,000‑65,000 tonnes of copper and 1,500-2,000 tonnes of molybdenum in the second half of 2023.