Partners expand Antamina

The already-massive Antamina copper-zinc deposit in Peru just got bigger.

Proven reserves now stand at 313 million tonnes averaging 1.3% copper, 1.06% zinc and 0.03% molybdenum, plus 14.13 grams silver per tonne, whereas probable reserves are pegged at 246 million tonnes grading 1.15% copper, 0.99% zinc, 0.028% moly and 13.71 grams silver. Combined, the reserves are 13% greater in volume than the previous estimate and are slightly higher in zinc and silver grades, albeit marginally lower in copper.

The revision, which includes new drill results, is based on a cutoff grade of 0.7% copper-equivalent.

Antamina is a joint venture involving: Noranda (NOR-T), with 33.75%; London-based Billiton, with 33.75%; Teck (TEK-T), with 22.5%; and Japan-based Mitsubishi, with 10%. Billiton is a new addition, having acquired its stake in October through the takeover of Rio Algom.

The project is slated to become the world’s seventh-largest copper producer and third-largest zinc producer. Annual production over 20 years is forecast at 600 million lbs. copper and 360 million lbs. zinc, plus 5.7 million lbs. moly and 6.2 million oz. silver.

Cash costs are expected to average less than 30 per lb. copper in the first 10 years and 35 over the life of the mine (net of byproduct credits). The project is expected to generate a leveraged rate-of-return of at least 15%, based on copper and zinc prices of US95 and US55 per lb., respectively.

Construction is on schedule for full production to begin in late 2001. By then, more than US$2 billion will have been spent, making Antamina the largest mining project under development.