Lundin secures environmental permit to extend Candelaria mine life

Canada’s Lundin Mining (TSX: LUN) can proceed with a plan to extend the productive life of its Candelaria copper mine in Chile after local authorities approved a revised environmental impact assessment (EIA) for the operation.

The miner said the new EIA considers several improvements to the operations, which will allow extending Candelaria’s life to 2040, 10 years more than estimated in the previous assessment.

Lundin said the approved EIA would allow, in particular, the potential development of the Candelaria underground expansion project and of the La Española pit.

Candelaria mine. Credit: Minera Candelaria

The Vancouver-based miner, Canada’s third-biggest copper producer, expects to receive the final seal of approval from the Environmental Assessment Service in October.

The Candelaria complex includes the Candelaria and Ojos del Salado copper mines in Chile’s northern Atacama region. The two operations produce copper concentrates from open pit and underground mines.

Lundin Mining CEO Peter Rockandel said the approval of the new EIA marked the culmination of a comprehensive process.

“[It] enables the construction of various facilities and initiatives that, together, represent continued investment and local employment,” he said in the statement.

The complex is expected to churn out 145,000–155,000 tonnes of copper and 85,000–90,000 oz. of gold this year.

Lundin Mining indirectly owns 80% of the Candelaria complex and Japan’s Sumitomo holds the rest.

In a research note on Tuesday, BMO Capital Markets metals and mining analyst Jackie Przybylowski said that while the approval of the EIA for Candelaria’s extension was expected, it still represents a positive de-risking event for the project. 

BMO maintains its market perform rating for Lundin and its $10 per share one-year target, she said. 

Lundin shares were up 2.2% to $10.59 on Tuesday morning in Toronto, valuing the company at $8.1 billion. Its shares traded in a 52-week range of $6.24 and $11.93.