Placer and Minera Rayrock copper projects part of $5-billion

About $5 billion will be invested in Chile’s copper mining industry over the next three years, according to a survey by the Centre of Copper and Mining Studies (Cesco) in Santiago.

Between 10 and 15 new projects are scheduled to start up by the year 2000, most of which will employ cheaper, environmentally safe solvent extraction-electrowinning technology.

With these projects entering production, Chilean copper output is expected to reach nearly three million tonnes of fine material by the end of the decade, compared with current levels of about two million tonnes (17% of total world production).

The Northern Miner recently visited two of these early-stage development projects: Placer Dome’s (TSE) $600-million Zaldivar, and Ivan which belongs to Minera Rayrock (TSE).

Zaldivar, 175 km east of Antofagasta, is a 50-50 joint venture between Placer and Outokumpu Copper Resources of Finland. Outokumpu acquired the property in 1989 through public tender and Placer bought its interest in 1992 for $100 million.

Design and construction are being handled by Placer, with technical input from Outokumpu which will also market the copper cathode. The mine will be managed by the jointly owned Compania Minera Zaldivar.

Placer has agreed to provide up to US$400 million in debt financing, with the balance of the capital requirement to be shared equally between the partners. Construction is under way at the site and production is scheduled to start in the second half of 1995 at 125,000 tonnes of copper cathode per year. Production costs over the 17-year mine life are estimated at US52 cents per lb., with total costs ranging between US69 cents and US70 cents per lb. Secondary sulphide and oxide reserves, hosted primarily in andesitic volcanic rocks, total 246 million tonnes grading 1.02% copper, with a lower-grade dump leach reserve of 70 million tonnes grading 0.41% copper. The deposit also contains partially delineated primary (chalcopyrite-rich) reserves of 160 million tonnes grading 0.4% copper.

With the deposit sitting in the shadow of BHP Minerals International’s giant Escondida operation, the partners have negotiated an agreement with Escondida allowing them such things as access to the Zaldivar site and use of surface land for mine processing. They are also assured of water and power supply during construction, water and powerline right of way, water rights, and back- slope agreements for tailings and mine waste.

At the 180-sq.-km Ivan property, 26 km north of Antofagasta, Minera has collared the underground decline to gain access to the high-grade Ivan sulphide zone. Work has also begun on the 18-km-long powerline and water pipeline.

The property contains three orebodies; Ivan, Zar and Emperatriz. Oxide reserves for the three zones, which are minable by open pit, total 3.7 million tonnes grading 1.9% copper. The Ivan deposit contains an additional sulphide reserve of 934,000 tonnes averaging 4.6% copper. The Ivan deposit is contained in a breccia pipe in Jurassic volcanic rocks whereas the Zar is hosted in a fault structure. Most of the copper oxide ore occurs as chrysocolla and atacamite, a copper-chloride-oxide mineral.

Oxide ore containing atacamite will be leached on a separate pad using sulphuric acid, while mixed sulphide and oxide ore will be processed using bio-leaching technology. The operation is expected to yield about 10,000 tonnes of copper cathode per year over a 10-year mine life. Production is slated to begin in the second half of 1994, with overall costs estimated at US55-60 cents per lb.

Capital costs for the project are US$31.6 million, of which US$15 million is in the form of debt financing with the balance being supplied from equity. Two other significant projects being readied for development are the $1-billion Collahuasi joint venture and the Codelco-backed El Abra deposit. A feasibility study on Collahuasi, owned jointly by Falconbridge, Shell Chile and Minorco, is planned for early next year. Current projections are for the deposit to produce, annually, between 150,000 and 300,000 tonnes of copper cathode and concentrate, beginning in 1998.

El Abra, 50 km north of Chuquicamata, has oxide reserves of 700 million tonnes grading 0.7% copper and sulphide reserves in excess of 600 million tonnes grading 0.68% copper. Production from the oxide orebody is expected to begin in 1997 at 225,000 tonnes of cathode per year.

El Abra is owned 51% by Lac Minerals (TSE) and Cyprus Minerals (NYSE) and 49% by Codelco, the state-owned copper corporation.