Chilean Mining Investments – Project Portfolio 2015 -2024
DEPP 13/2015
Intellectual Property Registry © #256,643 Chilean Mining Investments – Project Portfolio 2015 -2024 1
Brief
The objective of this Assessment is to show the updated portfolio of mining projects in Chile, the estimate of investments required to carry it out in the 2015- 2024 period, and the impact upon the production capacity which the resulting productive contribution would have from the investing processes which would be registered in the aforementioned period up to 2024. The portfolio is made up of two groups of initiatives, the first of which correspond to those projects with a greater probability of materializing in the timeframes indicated by the owning companies, which are those in a base and probable condition, a total of 24 initiatives assessed in $31,345 million USD. Furthermore, the second group of projects corresponds to those in a possible and potential condition, meaning mining investments with lesser probability of materializing in the time frames established by the owners, as well as those prone to being affected by changes in market conditions, which total 18 initiatives assessed in $45,945 million USD. The most important part of this project portfolio is not the global value thereof, rather the composition in terms of the number of initiatives, those driving them, their objectives, their location, and the efforts being made to carry them out. Upon analyzing the investments within the investment portfolio, three phases can be identified: - Investment already raised, which corresponds to $15,415 million USD, or 19.9% of the current portfolio, - The investment to be raised during the next five year period, 2015-2019, for $44,894 million USD, equaling 58.1% of the portfolio, with an average yearly investment of $8,979 million USD, - The remainder to be invested in the 2020-2024 period, during which those projects whose commissioning is anticipated to happen during that time have an investment total which reaches $16,981 million USD, equaling 22% of the investment portfolio. Within the investment to be raised during the next five year period, the project group with the base and probable conditions make up 40% of the investment, with an average rate of $3,592 million USD. Likewise the group of initiatives in possible and potential conditions make up the remaining 60%, with an annual investment average of $5,386 million USD. This investment primarily seeks to increase the productive capacity, which translates into an increase in the supply available to the international market. In the case of copper, and considering the horizon through 20261, Chile has the potential to reach a maximum copper production of 7.56 million tons of copper, 31.6% above the production registered
1 Two years after the last year of the commissioning thereof as registered in this portfolio.
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in 2014, if all of the anticipated projects are carried out through 2024, wherein copper production would reach approximately 7.84 million tons, a 36.3% increase over 2014 production. It is worth noting that if only the initiatives with a base and probable condition are carried out, the copper production of the country will fall by 6.4% to around 5.4 million tons of fine copper. If, to this scenario, we add the materialization of the initiatives which are possible this would counteract the loss in production, reaching 6.6 million tons of fine copper, a 15.4% production increase with respects to 2014. This increase in production would reflect a structural change in the type of final product of the copper producing operations, as the maximum capacity of concentrate production would increase by 2.84 million tons by 2026, a 72.7% increase from 2014, the production of SxEw cathodes would diminish by 1.03 million tons, registering a decrease of 55.7% with respects to the same year. In the case of gold, it is expected that by 2026 the maximum capacity of this metal could reach 80.5 tons of gold content, a 75% increase over the 46 tons registered in 2014, while the projects included in this report with potential production of silver would reach 1,495 tpa of silver by 2026 over current production, which in 2014, reached 1,572 tons of silver. In the case of molybdenum, the principal by-product of copper mining, the maximum recovery capacity of molybdenum will reach 95.6 thousand tpa by 2026, a 96% increase with respects to the amount produced in 2014, which implies a yearly average rate of 5.3%. The projects with primary production or by-production of iron considered in this report will contribute 18.8mt of iron mineral by 2026, approximately 11.9 Mt of fine content, to reach a maximum production of around 33.3 Mt of iron ore, which is an 80% increase with respects to the quantity registered in 2014. In the case of industrial minerals, there are two initiatives in the area of saltpeter, the first of which would contribute 10,000 tpa of iodine equivalent, and around 1,293,000 tpa of NaNO3. The second initiative would produce around 2,700 tpa of iodine, and 400,000 tpa of nitrates, including 20,000 tpa of boric acid. It is interesting to point out that there is also an initiative to produce titanium dioxide (TiO2) at a capacity which is estimated at 200 ktpa of concentrate (95% of TiO2).
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Index
Brief...... 1 Figure Index ...... 5 Table Index ...... 6 1. Introduction ...... 7 2. Methodology ...... 9 2.1. Coverage ...... 9 2.2. Project attributes and conditions for their realizaton ...... 9 2.2.1. Conditions for materialization ...... 9 2.2.2. Project type ...... 10 2.2.3. Stage of advancement ...... 11 2.2.4. Procedure for Environmental Evaluation Service (SEA) ...... 11 2.2.5. Time frame for commissioning ...... 11 2.3. Codelco´s investment and information sources ...... 12 2.4. Private mining investment and information sources ...... 13 2.5. Methodological critera to estimate the commissioning date ...... 14 2.6. Production capacity estimate of copper mine ...... 14 3. Investments in Chilean mining ...... 16 3.1. Conditionality of the projects ...... 17 3.2. Investment purpose ...... 20 3.3. Regional investment ...... 21 3.4. Investment per originating country ...... 23 4. Estimate of yearly distribution of the project portfolio ...... 26 4.1. Distribution of the investment in copper mining ...... 26 4.2. Distribution of the investment in gold, iron and industrial minerals ...... 28 5. Estimate of the copper production capacity in Chile until 2026 ...... 30 5.1. Maximum copper mining production capacity in Chile ...... 30 5.1.1. Analysis of the hydrometallurgy production ...... 32 5.1.2. Analysis of the concentrate production...... 34 5.2. Maximum copper mining production capacity per region ...... 40
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5.3. Global estimate of the production capacity of other minerals ...... 43 5.3.1. Production capacity of gold and silver ...... 44 5.3.2. Production capacity of molybdenum ...... 44 5.3.3. Production capacity of iron ...... 45 5.3.4. Industrial minerals ...... 46 6. Comparison of the project portfolios from 2015 and 2014 ...... 47 7. Conclusions ...... 54 Investment procedence ...... 54 Investment purpose ...... 55 Investment region ...... 55 Conditionality of the investment ...... 55 Structural change in copper production ...... 56 ANNEX 1: Description of investment projects in copper mining ...... 58 1. State copper mining projects ...... 58 1.1. Structural Projects of CODELCO - www.codelco.cl ...... 58 2. Projects of the large private copper mines ...... 65 2.1. Projects of Anglo American - www.angloamerican.com ...... 65 2.2. Projects of Antofagasta Minerals - www.antofagasta.co.uk ...... 66 2.3. Projects of BHP Billiton - www.bhpbilliton.com ...... 72 2.4. Project of Capstone Mining - www.capstonemining.com ...... 74 2.5. Projects of Lunding Mining - www.lundinmining.com ...... 75 2.6. Projects of Teck - www.teck.com ...... 78 3. Projects of the medium copper mines ...... 81 3.1. Project of Amerigo Resources - www.amerigoresources.com ...... 81 3.2. Project of COPEC - www.empresascopec.cl ...... 82 3.3. Project of Hot Chili - www.hotchili.net.au ...... 83 3.4. Projects of Pucobre - www.pucobre.cl ...... 84 4. Metallurgy Plant Projects ...... 85 4.1. Project of Codelco - www.codelco.cl ...... 85 4.2. Project of LS-Nikko Copper ...... 86 ANNEX 2: Description of the investment projects in gold and silver mining ...... 87
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1. Project of Atacama Pacific Gold - www.atacamapacific.com ...... 87 2. Projects of Barrick Gold - www.barrick.com ...... 88 3. Project of Exeter Resource Corp. - www.exeterresource.com ...... 90 4. Project of Kingsgate Consolidate Ltd. - www.kingsgate.com.au ...... 92 5. Project of Kinross - www.kinross.com ...... 94 ANNEX 3: Description of the investment projects in iron mining ...... 96 1. Project of Andes Iron - www.conocedominga.cl ...... 96 2. Project of CAP MINERÍA. - www.capmineria.cl ...... 97 3. Project of Hebei Wenfeng Industrial Group - www.wfsteel.com ...... 98 ANNEX 4: Description of the investment projects in industrial minerals ...... 99 1. Projects of Ingenieros Asesores Ltda...... 99 2. Projects of SQM S.A. - www.sqm.cl ...... 100 3. Project of White Mountain Titanium Corp - www.wmtcorp.com ...... 101
Figure Index
Figure 1: Distribution of the investment in Chilean mining, according to condition ...... 17 Figure 2: Distribution of the investments in Chilean mining, according to project type ...... 20 Figure 3: Total investment of the investment portfolio per region, copper mining, and others ..... 21 Figure 4: Total investment of the investment portfolio according to originating country (MMUS$ and %) ...... 24 Figure 5: Investment per year, realized and to be realized, of the project portfolio according to type of mining ...... 26 Figure 6: Projection of maximum copper production in SxEw cathodes, 2014-2026 period ...... 33 Figure 7: Projection of maximum copper production in concentrates, 2014-2026 period ...... 34 Figure 8: Production of copper in concentrates and the participation in total production ...... 35 Figure 9: Projection of maximum copper production in concentrates according to destination, 2014-2026 period ...... 36 Figure 10: Projection of maximum production of tailings from the copper concentrating process, 2014 - 2026...... 37 Figure 11: Capacity for processing in copper concentrating plants up to 2026 ...... 38 Figure 12: Relation between treated mineral and fine copper content in concentrate produced .. 39
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Table Index
Table 1: Conditions to carry out a project...... 10 Table 2: Register of mining projects in Chile 2015 – 2024 ...... 16 Table 3: Distribution of the investments in Chilean mining per sector and condition of the projects...... 17 Table 4: Distribution of the investments in Chilean mining per sector and stage of advancement.18 Table 5: Distribution of the investment in Chilean mining according to area and processing before the SEA ...... 19 Table 6: Distribution of the investment in Chilean mining per sector and project type ...... 20 Table 7: Investment in copper mining per region and project condition ...... 22 Table 8: Investment in gold, iron and industrial mineral mining, per region and project condition. 23 Table 9: Distribution of the investment in cooper mining per originating country and condition (MMUS$) ...... 25 Table 10: Investment in gold, iron, and industrial mineral mining, per originating country and condition (MMUS$) ...... 25 Table 11: Yearly distribution of the copper mining investment according to the project condition (MMUS$) ...... 27 Table 12: Yearly distribution of the investment in gold, iron and industrial minerals according to condition (MMUS$) ...... 28 Table 13: Estimated production capacity of copper mining in Chile through 2026 (kt of fine Cu)... 30 Table 14: Estimated Chilean production capacity of fine copper in concentrate through 2026 (kt of fine Cu) ...... 32 Table 15: Estimated Chilean production capacity of fine copper in SxEw cathodes through 2026 (Thousands of tons.) ...... 32 Table 16: Maximum regional productive capacity of copper mines in Chile through 2026 (thousands of tons of fine Cu) ...... 40 Table 17: Maximum regional productive capacity of fine copper concentrate through 2026 (thousands of tons) ...... 41 Table 18: Maximum regional productive capacity of fine copper in SxEw cathodes through 2026 (thousands of tons) ...... 42 Table 19: Contribution to maximum production capacity of gold and silver according to project .. 44 Table 20: Maximum production capacity of molybdenum according to project ...... 45 Table 21: Estimate of new iron production capacities according to project ...... 46 Table 22: Comparison of investment portfolios 2015 vs. 2014 ...... ¡Error! Marcador no definido. Table 23: Comparison of portfolios 2015 and 2014 according to project condition ...... 51 Table 24: Comparison of portfolios 2015 and 2014 according to type of mining ...... 52 Table 25: Comparison of portfolios 2015 and 2014 according to type of mining and project condition ...... 52 Table 26: Comparison of portfolios 2015 and 2014 at a regional level ...... 53
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1. Introduction
The following report corresponds to a new update of the yearly report about investments in Chilean mining for the next decade, which is part of a line of work carried out by the Chilean Copper Commission and the Department of Studies and Public Policies for the past almost 10 years. The information herein contained is on based on public records available through June 2015, having the primary objective of providing pertinent information about the registry of mining projects which are currently valid in Chile, with the following projection of the expected investment and the potential capacity of mining production in Chile, considering the productive contribution which results from the investment process during the next ten years. The registration of the mining initiatives in this report does not assure they will materialize within the terms and timeframes planned by the companies, however it shows the interest they have to advance in their current mining activities, in the case of the companies with operations in Chile, or to begin mining in our territory, having considered the geologic potential of the available mining property as well as the economic and political perspectives in the country in the long term. This report is structured in the following manner: a) Specification of the methodological criteria used for the elaboration of this report, showing coverage, attributes which coincide with the condition that each project is in, with the purpose of measuring the level of certainty of the available information, information sources, criteria to estimate the start-up date if it is not readily available, and the estimate of the copper production capacity and of that of other minerals in the long term. b) Analysis of the investment required for the copper mining project portfolio, as well as that of gold, silver mining, iron mining, and that of some industrial minerals, with respects to the conditionality of these initiatives, the purpose of the investment, the regional distribution and the countries wherein the investments originate. The descriptive background of each of the projects considered is included in Annex 1 (copper mining), Annex 2 (gold and silver mining) and Annex 3 (industrial minerals: iodine, nitrates, potassium salts, and titanium oxide,) respectively. c) An estimate of the investment flow coming from the project profile, indicating the amounts already invested, the yearly flow during the next decade, and the amount to be invested after the next five years. It is to be noted that this projection is only referential and does not constitute a commitment with the companies which own the projects. d) Furthermore, and as a result of the investment process, the productive contribution of these projects is shown, through projections of the maximum production capacity of the copper mine, in concentrates such as SxEw cathodes, looking toward 2026 (two years after the last start-up registered in this report) and focusing on the conditionality of the initiatives. Additionally, a global estimate is given for the future production of gold, silver, molybdenum, iron and the industrial minerals considered. As in the case of the
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annualization of the investments, the production estimates are only referential based on the methodologies and information sources described at the beginning of this document. e) As in the previous two years, a registry is made as a form of comparison of the changes which have been registered between the current project portfolio and the previous, showing variations in investment amounts as well as in the quantity of initiatives considered. In this opportunity a vision is given on a level of the conditionality of the projects, investment purpose, and comparison on a regional level of the changes produced. Finally it concludes with the most relevant background information which can be taken from the information given.
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2. Methodology
The Methodology which is used for the confection of this register is based on the following criteria:
2.1. Coverage
The project register covers the investments with productive purposes (reposition or expansion of the production or new development) anticipated by CODELCO and the private companies of the large and medium metal and non-metal mines, excluding energy minerals. Only projects with investments which surpass 90 million dollars are included, as are those which are already being carried out as well as those in which the companies are assessing and have the intention of initiating the investment process within a five year period. For the effects of the yearly distribution of the estimated investment for each project, included is the sum of the investments already in place from the beginning of the project until the end of the year prior to the present report under the concept of “Before xxxx” wherein “xxxx” corresponds to the publication year of the report. Then the estimated investment is assigned for each year of the next five year period. Similarly, for those projects which will begin operations after the next five year period, it is presented as “Investment after xxxx”, wherein “xxxx” is the year after the last year of the present five year period, for the accumulated investment which will be carried out until the operations begin. It is worth noting that the information compiled in this document is the best approximation known of the projects being considered. In some cases, without other public information, the yearly distribution of the investments are estimates of the authors and are not binding in any way for the companies who own the projects. The background information of each project includes an estimate of the production of metals which they would supply, when it corresponds to such, as well as the indication of the current state of the project.
2.2. Attributes of the projects and the conditions of carrying them out
The information about the investment projects is characterized by the uncertainty due to the quantity and quality of the background information available, which depends on the attributes of the projects up to the date in which the registry is made.
2.2.1. Conditions for the materialization
Each attribute has a degree to which it may be associated to a greater or lesser degree of certainty and the combination of which will give a perception of the conditionality in which it is found to be carried out. Therefore, there are 4 conditions defined: Basic, probable, possible, and potential, as associated with the specific attributes which are detailed in Table 1:
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Table 1: Conditions for carrying out a project
Condition Project type Stage of advance SEA process Implementation
BASE Any Execution RCA approved Within the period
RCA approved or in Any Execution suspended Within the period judicial claims
PROBABLE Any Feasibility RCA approved Within the period
Reposition or expansion Feasibility EIA or DIA in process Within the period
Reposition or expansion Feasibility suspended EIA or DIA in process Within the period
Reposition or expansion Feasibility EIA or DIA not presented Within the period
EIA or DIA in process or POSSIBLE New Feasibility Within the period not presented
Any Feasibility RCA approved Outside of the period
EIA or DIA in process or Reposition or expansion Feasibility Outside of the period not presented
Any Feasibility suspended Any Outside of the period
EIA or DIA in process or POTENTIAL New Feasibility Outside of the period not presented
Any Pre-Feasibility Any Any Source: Prepared by COCHILCO The attributes of a project are associated to their type, the stage of advance they are in, the status of the processing before the SEA, and the estimated date of implementation. The explanation of each is as follows:
2.2.2. Project type
This attribute gives information about the degrees of certainty of the realization of an investment project, as it relates to the strategic purpose of the Company and the lesser to higher complexities they face for the implementation to be carried out. The categories are as follows: a) Replacement projects: Those wherein the investment is to maintain the productive capacity of a current operation (brownfield) with new mining developments, to deal with a decline in ore grades and/or depletion of sectors being mined. This allows the Company to prolong the lifespan of the site and the use of the installations. b) Expansion projects: Those which seek to enlarge the current operational capacity (brownfield), with the purpose of increasing the production scale and diminishing the unitary costs, especially due to a decline in ore grades of the mining resources to be exploited. c) New projects: Those located at a new deposit (greenfield), and have to begin everything: the environmental and sector permissions, develop infrastructure, and settle into a new
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location. It also includes projects in current operations (brownfield), which contemplate a complete change in the productive process (For example: from leaching to concentration), which implies a practically new development of the site.
2.2.3. Stage of advance
It is possible to estimate that to the degree that a project advances the certainty that it will be carried out increases. Therefore the projects have been categorized, according to the stage they are in: a) In Execution: The investment has been approved as well as has the corresponding permissions for it to be carried out. It is already in one of the detailed engineering or construction stages from the beginning to the implementation. b) Feasibility Assessment: Those which have already begun the feasibility studies and those of environmental evaluation (EIA or DIA) or they may already have been finished, but the final decision approving the investment has not been made. c) In Pre-feasibility Assessment: Those which are in the initial stage of pre-feasibility studies until the decision is made to continue to the following stage. Most of the projects follow a normal course, notwithstanding the modifications which are seen fit to introduce, however, the advancement of a project may be affected by some type of suspension, be it from internal situations or those outside of the company’s control. Upon suspension, the project stops advancing and in some cases will return to the previous stage to redo the studies and thereby resolver the complications which have arisen be they internal or external.
2.2.4. Processing before the Environmental Evaluation Service (SEA)
No project may be carried out without having the Environmental Qualification Resolution (RCA) approved, which occurs after an exhaustive technical-administrative process which includes civic participation, which is submitted to the declaration or the studies of the corresponding environmental evaluation. Therefore, three stages are shown, from most to least certainty: a) RCA approved, b) EIA or DIA in process c) EIA or DIA nor presented
2.2.5. Implementation time frame
The level of certainty of the background information also depends on the proximity or length of time from the date set for the implementation. The following ranges indicate a greater to lesser certainty: a) Within the period: Date within the period of analysis, or within the five-year period, b) Outside of the period or Long-term: Date after the period of analysis, or outside of the five- year period.
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2.3. The investments of Codelco and their information sources
The information sources about the investments projected by Codelco are based on public information given by the corporation on their webpage, in presentations from the board of directors, and are compiled primarily on the whole of information available from their Business and Development Plan, and other official information of the Company received regularly by the Direction of Evaluation of Investments and Strategic Management (DEIGE) of Cochilco, which assist in supplying a better estimate. This information is to be understood as being only a prospective tool and does not bind the public entities which would intervene in the evaluation of the investment projects, which may or may not be considered in the projection2. The investments considered by Codelco, are those which are contemplated in the 2015 Business and Development Plan (PND 2015), justified as development projects or to increase the information necessary for future developments. The development projects are directly related with the productive future of the divisions and should meet profitability norms to be approved. Of these are highlighted: a) Structural projects: a select group of the development projects conceived to take an integral advantage of the mineral resources, and constitute the base for the development of the corporation in the long term. The report of each of these projects gives explicit background information of the characteristics and investment amounts for the implementation stage. b) Other developmental projects: the investment portfolio of Codelco contains diverse projects with more temporary or short term goals, whose execution are essential for the continuity of operations in the productive divisions, considering them to complement that which has been planned for the structural projects. In this report the global background of the investment amounts is considered for this concept. Furthermore, Codelco justifies as informational projects those which allow them to acquire new and relevant information for corporative development, but which are not broken down under a particular investment project. Within this concept, the investments are grouped in studies for future developmental projects (pre-feasibility, feasibility, environmental evaluation, etc.), the investment in basic and generative exploration, and investments in I&D. Given the diversity of these purposes, only a broad background of the financing requirements considered for this concept is given.
2 Before an investment can be confirmed, it is required that an “Authorization of Investment Projects” be carried out, during the evaluation of which the Chilean Copper Commission and the Social Development Department work together. It does not include those expenses which CODELCO treats as investments (Differed expenses and others) for which the aforementioned authorization is not required. The fact that they are identified in the 2014 PND does not necessarily mean that they have the established investment authorization which is required by the applicable regulations and does not bind the entities mentioned therein.
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Among the projects included in this report the investments from the 2014 PND are not considered which are justified with other objectives, such as the replacement of equipment, refurbishing of installations, decontamination projects, workplace safety and well-being, even though they also require an API to be carried out. This exclusion meets the purpose of making Codelco´s information comparable with the information for private investments, as this type of information from the privately owned companies is not available. Also excluded are those corporate investment which, for their nature, do not require an API and which escape being covered in the present report. However it has been found pertinent to consider the investments of Codelco in companies intending to build metallurgic plants for by-product processing, and thereby obtain final products of a higher value3. This type of investment is excluded in Codelco´s investment total, and as such are consigned as “Metallurgic Plants” in copper mining.
2.4. Investment in private mining and information sources
The information about private mining projects is gathered principally from the announcements made by the companies through the media (company web pages, newspapers, articles in specialized magazines, etc.) and through their presentations to the environmental evaluation department. It includes all of the projects which have begun construction. In the case of the projects which are still in the Assessment phase the advancement has been reviewed and investment predictions have been updated, as well as implementation date and estimated production profiles, with the most recent public information. This implies that at least the following updates are made: a) Identification of the project titleholder for projects which have changed hands. b) Production capacity and types of products of interest. c) Investment amounts, implementation date, and execution order of events. d) Inclusion of new projects. e) Elimination of projects which were recently implemented. f) New requirements, such as the incorporation of the usage of sea water, be it directly or desalinized. With respects to the investment amounts, it is assumed that the projects reflect principally the execution stage, notwithstanding that several of them may include prior investments in the Assessment phase.
3 MOLYB Ltda. is an affiliate to produce molybdenum trioxide from molybdenite. Similarly, PLANTA RECUPERADORA DE METALES, (60% LS NIKKO of Korea and 40% of Codelco), is a company which processes anodic slime to recuperate gold, silver, and other noble minerals.
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Due to the fact that generally only a general investment amount is known a year prior to the implementation date, the yearly distribution of the investment is estimated by assuming tentative timelines for project development, based primarily in the information given in the presentations to the environmental evaluation system or by empirical estimates of how similar projects are developed chronologically. It is worth noting that in the cases of projects which are lacking precise public data for the implementation year, Cochilco has estimated it based on the context of the available data, which does not bind the companies in any way.
2.5. Methodological criteria for estimating the implementation date
Diverse circumstances either internal and/or external may affect the development of the projects. External factors refer to the necessary of: securing the electrical supply at a lower amount than the prevailing costs, fine tuning of the environmental impact Assessment and/or obtaining permits to build infrastructure as required for the project. Furthermore, internal factors refer to the synchronization of the project with the global strategy of the company, acquiring financing, and the need of improving the cost indicators considered for investment and/or operation as determined in the project engineering studies, as well as others. In the instance of a lack of public data about the implementation date of a given project, COCHILCO applies the following methodological criteria: a) A year of delay is considered if the project is only affected by external factors, notwithstanding that the company carries out studies to improve the Feasibility Assessment considering the resolution of the pending topics, which could mean minor modifications in the Assessment. b) Two years of delay are considered if the project requires reworking to take into account the pre-feasibility or Feasibility studies, a normal time frame for this type of studies to be carried out.
In the case that there is not sufficient background information to estimate a clear implementation date for the initiatives, these are removed from the portfolio as “restructuring projects.”
2.6. Estimating the production capacity of copper mines
The maximum potential copper production capacity corresponds to the sum of the estimated individual maximum production capacity of each profile for the current mining operations which produce copper concentrates and/or SxEw cathodes, as those which correspond to the new copper projects contemplated in the present investment portfolio which will be implemented within the next decade. The figures are expressed in tons of fine copper. The future profiles of the current operations are projected over the base of the recent productive behavior and the estimate of the evolution of the mining-metallurgic parameters (ore grade and
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recovery capacity of the concentrating plants or the consumption of rates in acids in hydrometallurgical operations, considering maximum treatment profiles and they do not contemplate usage problems of the processing plant, all of which are according to the information which is available to Cochilco, considering a continuous operation of 360 days per year. At the same time, the projected project profiles for the projects are based in the maximum treatment capacity of the minerals described by the companies for a continuous operation of 360 days per year, and the background of the mining-metallurgical parameters which are expected for future operations. As the projects are assigned distinct materialization conditions (base, probable, possible, and potential), the production profiles are broken down according to these degrees, indicating therein the levels of certainty from most to least. For this reason the projected amounts should be understood as an estimated potential maximum capacity, beginning in the year of the publication of the present report, according to the available background information. Included as referential data is the real production registered the year after the publication of this update. It is worth noting that the production projection horizon is up to two years after the last year of the implementation which is registered in this report.
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3. Investment in Chilean mining
The present chapter shows information with regards to the investment amounts required for the projects being considered, based on criteria such as investment purpose, conditionality, regional investment, and by country of origin. The list of the projects considered in this update of the investment portfolio in Chilean mining, through July 2015, is shown in the following table.
Table 2: Register of Chilean mining projects 2015 – 2024
Investment Status of Project Development through Implementation Projects Operator Mining Sector Region Condition environmental type stage July 2015 permissions (MMUS$) 2015 - 2019 Other development projects Codelco Chile State - Cu Various Replacement BASE Execution N/A 2,758 2015 - 2019 Information projects Codelco Chile State - Cu Various New POSSIBLE Feasibility N/A 1,165 2015 Romeralinformación Phase V Cía. Minera del Pacífico Iron Coquimbo Replacement BASE Execution EIA approved 198 2015 Escondida OGP I Minera Escondida Ltda. Large mining - Cu Antofagasta Expansion BASE Execution EIA approved 4,199 2015 Antucoya Minera Antucoya Large mining - Cu Antofagasta New BASE Execution EIA approved 1,900 2015 Update Esperanza Minera Centinela Large mining- Cu Antofagasta Expansion BASE Execution EIA approved 630 2015 Valle Central Expansion Minera Valle Central Med. Mine - Cu O'Higgins Expansion BASE Execution EIA approved 152 2016 Mo treatment plant Molyb Ltda. Metallurgy Plants Antofagasta New BASE Execution EIA approved 425 2016 Oso Negro Minera San Fierro Chile Ltda Iron Atacama New PROBABLE Feasibility EIA approved 90 2016 Metal recovery plant Planta Rec. de Metales SpA Metallurgy Plants Antofagasta New BASE Execution EIA approved 96 2016 Encuentro Óxidos Minera Centinela Large mining - Cu Antofagasta Replacement BASE Execution EIA approved 636 2016 El Tesoro modifications Minera Centinela Large mining - Cu Antofagasta Replacement BASE Execution EIA approved 86 2016 Quebrada Blanca Update Cía. Minera Teck Quebrada Large mining- Cu Tarapacá Replacement PROBABLE Feasibility EIA presented 165 2017 Sierra Gorda Expansion 220 ktpd SierraBlanca Gorda SCM Large mining – Cu Antofagasta Expansion PROBABLE Feasibility EIA presented 1,500 2017 Pampa Blanca Expansion SQM Nitrato Industrial Minerals Antofagasta Expansion PROBABLE Feasibility EIA approved 665 2017 Nueva Esperanza – Arqueros Laguna Resources Chile Gold Atacama New POSSIBLE Feasibility Without EIA 150 2017 Pascua Cía. Minera Nevada Gold Atacama New PROBABLE Execution EIA suspended 4,250 2017 Arbiodo Ingenieros Asesores Ltda. Industrial Minerals Antofagasta New POSSIBLE Feasibility Without EIA 503 2017 Cerro Blanco SCM White Mountain Titanium Industrial Minerals Atacama New PROBABLE Feasibility EIA approved 380 2017 Caspiche Óxidos Eton Chile Gold Atacama New POSSIBLE Feasibility Without EIA 344 2017 El Espino Pucobre Medium mining - Cu Coquimbo New POSSIBLE Feasibility EIA presented 624 2017 Cerro Colorado Cont. Pampa Norte Large mining- Cu Tarapacá Replacement PROBABLE Feasibility EIA presented 467 2017 LosOperacional Bronces - phase 7 AngloAmerican Sur S.A. Large mining- Cu Metropolitana Expansion PROBABLE Feasibility EIA presented 112 2018 La Coipa phase 7 Kinross Minera de Chile Ltda. Gold Atacama Replacement PROBABLE Feasibility EIA presented 200 2018 Santo Domingo Santo Domingo SCM Large mining - Cu Atacama New PROBABLE Feasibility EIA approved 1,700 2018 Candelaria 2030 Cía. Contractual Minera Large mining - Cu Atacama Replacement PROBABLE Feasibility EIA approved 460 2018 Cerro Maricunga MineraCandelaria Atacama Pacific Gold Gold Atacama New POSSIBLE Feasibility Without EIA 587 2018 Diego de Almagro CompañíaChile Ltda. Minera Sierra Norte Medium mining - Cu Atacama New PROBABLE Feasibility EIA approved 597 2018 Productora SociedadS.A Minera El Águila Medium mining - Cu Atacama New POTENTIAL Pre-feasibility Without EIA 700 2018 Ampliación Marginal los MineraLimitada Los Pelambres Large mining - Cu Coquimbo Replacement POSSIBLE Feasibility Without EIA 1,190 2019 SulfurosPelambres RT phase II Codelco Div. Radomiro Tomic State - Cu Antofagasta New POSSIBLE Feasibility EIA presented 5,459 2019 Spence Growth Option Pampa Norte Large mining - Cu Antofagasta New POSSIBLE Feasibility EIA presented 3,300 2019 Dominga Andes Iron Iron Coquimbo New POSSIBLE Feasibility EIA presented 2,888 2019 Distrito Centinela(*) Minera Centinela Large mining - Cu Antofagasta New POSSIBLE Feasibility EIA presented 4,350 2020 ChuquicamataDevelopment Subterranean Codelco Div. Chuquicamata State - Cu Antofagasta Replacement BASE Execution EIA approved 3,816 2020 Rajo Inca Codelco Div. Salvador State - Cu Atacama Expansion POTENTIAL Pre-Feasibility Without EIA 2.691 2020 Quebrada Blanca Hipógeno Cía. Minera Teck Quebrada Large mining - Cu Tarapacá New POTENTIAL Feasibility Without EIA 5,590 2021 New Level Mine CodelcoBlanca Div. El Teniente State - Cu O'Higgins Replacement BASE Execution EIA approved 4,920 2021 El Abra Mill Project SCM El Abra Large mining - Cu Antofagasta New POTENTIAL Feasibility Without EIA 5,000 2022 Mine- Plant Transfer Codelco Div. Andina State - Cu Valparaíso Replacement BASE Execution N/A 1,323 2022 Relincho Cía. Minera Relincho Copper Large mining - Cu Atacama New POTENTIAL Feasibility Without EIA 4,500 2024 Nueva Andina Phase II CodelcoS.A. Div. Andina State - Cu Valparaíso Expansion POSSIBLE Feasibility EIA presented 6,524 Total Investment in the project portfolio 2015 - 2024 (MMUS$) 77,290 (*): Previously named “Encuentro Sulfuros”
Source: Prepared by COCHILCO, based on information for each project taken from public sources
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3.1. Project conditionality
Every mining initiative may be affected by certain variables which cause changes in the planned timeline, these are usually the stage of advancement in the construction or studies, obtaining permission, be it environmental or sectoral, financial strength of the Operating companies, among others. Based on this information it is possible to establish the conditions: base, probable, possible, and potential, based on the greater or less amount of certainty of which the project will come about in the time and with the aforementioned variables4. Figure 1 shows the investment distribution according to the condition, while table 3 shows how the investment is distributed per mining sector and project condition.
Figure 1: Investment distribution in Chilean mining, according to condition
POTENTIAL BASE MMUS$ 18.481 MMUS$ 21.139 23,9% 27,4% 5 projects 13 projects
POSSIBLE PROBABLE MMUS$ 27.464 MMUS$ 10.206 35,5% 13,2% 13 projects 11 projects
Source: Prepared by COCHILCO
Table 3: Investment distribution in Chilean mining per sector and project condition
Sector Total Base Probable Possible Potential Mining sector Project Investment Project Investment Project Investment Project Investment Project Investment Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Codelco 8 28,656 4 12,817 0 0 3 13,148 1 2,691 Large mining 17 35,785 5 7,451 6 4,404 3 8,840 3 1,090 Medium mining 4 2,073 1 152 1 597 1 624 1 700 Metallurgic Plants 2 521 2 521 0 0 0 0 0 0 Copper subtotal 31 67,035 12 20,941 7 5,001 7 22,612 5 1,481 Gold and Silver 5 5,531 0 0 2 4,450 3 1,081 0 0 Iron 3 3,176 1 198 1 90 1 2,888 0 0 Industrial minerals 3 1,548 0 0 1 665 2 883 0 0 Other mineral subtotal 11 10,255 1 198 4 5,205 6 4,852 0 0
Source: Prepared by COCHILCO, based on information for each project taken from public sources
4 For more information on the Methodology, go to Chapter 2.2 “Project attributes and conditions for their realization”.
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Therefore the investment portfolio for 2015-2024 corresponds to 42 initiatives, broken down into 31 copper mining projects, valued in US$ 67,035 million, and 11 projects belonging to gold, silver, iron, and industrial mineral mining, for a total of US$ 10,255 million.
Of this total, we will initially analyze the projects with the greatest probability of being carried out within the time frame indicated by the proprietary mining companies, which correspond to those projects in the base and probable conditions, being 23 initiatives valued in US$ 29,845 million:
- 13 initiatives are in base condition, with an investment of US$ 21,139 million, wherein CODELCO has a 63.1% participation rate of the investments in this condition. - 10 projects in a probable condition, with an investment of US$ 10,206 million, where gold and silver mining make up 43.6% of the total investment.
The second group, projects in the possible and potential category, correspond to those initiatives with a lesser probability of materializing within the time frame established by the owners as well as being those more likely to be affected by changes in market conditions, being the equivalent of 18 initiatives valued in US$ 45,945 million:
- 13 in the possible condition, valued in US$27,464 million, wherein CODELCO has a 48% participation in the investment total. - Five initiatives in the potential condition, with an investment total of US$ 18,481 million, wherein the large private copper mining has 82% participation.
Due to the complex characteristics and ease of being affected by the variables described at the beginning of this chapter, this last group requires more attention so that in the right time they may be implemented within the institutional framework of the country.
To better analyze the variables involved up to the moment of defining the condition of the projects in this registry, following is shown the investment distribution of the projects with regards to their stage of advancement and of processing before the Environmental Evaluation Service.
Table 4: Investment distribution in Chilean mining per sector and stage of advancement
Sector Total Execution Execution suspended Feasibility Pre-feasibility Project Mining sector Project Investment Project Investment Project Investment Investment Project Investment Quantit Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) (MMUS$) Quantity (MMUS$) y Codelco 8 28,656 4 12,817 0 0 3 13,148 1 2,691 Large mining 17 34,285 5 7,451 0 0 12 28,334 0 0 Medium mining 4 2,073 1 152 0 0 2 1,221 1 700 Metallurgic plants 2 521 2 521 0 0 0 0 0 0 metalúrgicas Copper Subtotal 31 67,035 12 20,941 0 0 17 42,703 2 3,391 Gold and silver 5 5,531 0 0 1 4,250 4 1,281 0 0 Iron 3 3,176 1 198 0 0 2 2,978 0 0 Industrial minerals 3 1,548 0 0 0 0 3 1,548 0 0 Other mineral Subtotal 11 10,255 1 198 1 4,250 9 5,807 0 0
Source: Prepared by COCHILCO, based on information for each project taken from public sources
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As observed in Table 4, the projects in execution make up 27.4% of the total portfolio with 13 initiatives, of which “Mine-Plant Transfer” of División Andina and “Other development projects” of CODELCO which do not possess the Environmental Impact studies due to investments on an operational level. It may also be observed that the investment portfolio concentrates 62.8% of the inversions on 26 projects in the feasibility stage.
Table 5: Investment distribution in Chilean mining per sector and SEA process
Sector Total EIA approved EIA suspended EIA presented Without EIA N/A Mining Sector Project Investment Project Investment Project Investment Project Investment Project Investment Project Investment Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Codelco 8 28,656 2 8,736 0 0 2 11,983 1 2,691 3 5,246 Large mining 17 35,785 7 9,611 0 0 6 9,894 4 16,280 0 0 Medium mining 4 2,073 2 749 0 0 1 624 1 700 0 0 Metallurgic Plants 2 521.1 2 521 0 0 0 0 0 0 0 0 Copper Subtotal 30 67,035 13 19,616 0 0 9 22,501 6 19,671 3 5,246 Gold and silver 5 5,531 0 0 1 4,250 1 200 3 1,081 0 0 Iron 3 3,176 2 288 0 0 1 2,888 0 0 0 0 Industrial minerals 3 1,548 2 1,045 0 0 0 0 1 503 0 0 Other minerals subtotal 11 10,255 4 1,333 1 4,250 2 3,088 4 1,584 0 0
Source: Prepared by COCHILCO, based on information for each project taken from public sources Similarly, table 5 shows the 17 initiatives which equal 27.1% of the total inversion which have the RCA approved as of July 2015, which indicates that there are 6 initiatives which, in the next few months, could begin implementation and change their materialization condition. Furthermore, 33.1% of the financing corresponds to 10 initiatives which have not yet received a positive environmental qualification (RCA approved) for their presented projects, and 27.5% of the investment corresponds to projects which have not yet entered their respective EIA into the system.
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3.2. Investment purpose
The materialization of the initiatives, as well as being subject to the aforementioned variables, depends on the strategic purpose of the Company with regards to its future development. Following is an investment summary of the inversions for the project portfolio for the 2015-2024 period, according to the mining sector it is destined to, distributed by project type5.
Figure 2: Investment distribution in Chilean mining, according to project type
REPLACEMENT MMUS$ 16.219 21,0% 12 projects NEW MMUS$ 44.598 57,7% 22 projects
EXPANSION MMUS$ 16.473 21,3% 8 projects
Source: Prepared by COCHILCO
Table 6: Investment distribution in Chilean mining per sector and project type
Sector Total Replacement Expansion New Mining sector Project Investment Project Investment Project Investment Project Investment (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity CODELCO 8 28,656 4 12,817 2 9,215 2 6,624 Large mining 17 35,785 6 3,004 4 6,441 7 26,340 Medium mining 4 2,073 0 0 1 152 3 1,921 Metallurgic plants 2 521 0 0 0 0 2 521 Copper subtotal 31 67,035 10 15,821 7 15,808 14 35,406 Gold and silver 5 5,531 1 200 0 0 4 5,331 Iron 3 3,176 1 198 0 0 2 2,978 Industrial minerals 3 1,548 0 0 1 665 2 883 Other minerals subtotal 11 10,255 2 398 1 665 8 9,192
Source: Prepared by COCHILCO, based on information for each project taken from public sources Upon closer observation of the investment details, it can be determined that the replacement of the productive capacity corresponds to 21% of the total investment with 12 initiatives, wherein projects y CODELCO make up 79% of this segment. Furthermore, the expansion of operations which
5 See subchapter 2.2.2, “Project type”
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are currently in production reaches 21.3% of the total inversion in the portfolio with only eight projects, wherein CODELCO again is relevant with 55.9% of this segment. In summary, the brownfield investments of the project portfolio, replacement and expansion of current operations reaches 42.3% of the investment portfolio with CODELCO as the principal investor.
Similarly, 22 of the 42 projects considered in the investment portfolio for 2015-2024, making up 57.7% of the portfolio´s value, correspond to new projects presented by mining companies operating in the country as well as by 10 companies who would like to enter the Chilean mining market with the new projects. The principal intention of the new companies and their projects are_ one for large copper mining, one for medium copper mining, three in gold mining, two in iron, two in industrial minerals, and one metallurgical plant. These 10 initiatives make up US$ 7,438 million, or 9.6% of the total portfolio value.
3.3. Regional Investment
The third look at the mining project portfolio is that of the regional distribution of the investment, in copper mining as well as gold, silver, iron compounds, and industrial minerals, as shown in figure 3.
Figure 3: Total investment of the investment portfolio by regions for copper mining and others
Tarapacá 6.222
Antofagasta 32.966
Atacama 11.138
Coquimbo 1.814
Valparaíso 8.141
Metropolitana 504
O'Higgins 6.249
0 5.000 10.000 15.000 20.000 25.000 30.000 35.000
Inversiones en minería del cobre (MMUS$) Inversiones en minería de oro y plata (MMUS$) Inversiones en minería del hierro y min. ind. (MMUS$) Source: Prepared by Cochilco
As previously explained, the investment distribution by the conditionality of the projects allows to create a realistic image of the investment portfolio, for this reason table 7 also shows the regional distribution of the investment in copper mining according to the condition of materialization of the projects.
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Table 7: Copper mining investment per region and project condition
Region Total Base Probable Possible Potential Region Project Investment % of total Project Investment Project Investment Project Investment Project Investment Quantity (MMUS$) investment Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$)
Tarapacá 3 6,222 8.1% 0 0 2 632 0 0 1 5,590 Antofagasta 13 32,966 42.7% 8 12,891 1 1,500 3 13,575 1 5,000 Atacama 6 11,138 14.4% 0 345 3 2,757 0 146 3 7,891 Coquimbo 2 1,814 2.3% 0 0 0 0 2 1,814 0 0 Valparaíso 2 8,141 10.5% 1 1,530 0 0 1 6,611 0 0 Metropolitana 1 504 0.7% 0 276 1 112 0 117 0 0 O´Higgins 2 6,249 8.1% 2 5,899 0 0 0 350 0 0 TOTAL 31 67,035 86.7% 12 20,941 7 5,001 7 22,612 5 18,481
Source: Prepared by COCHILCO, based on information for each project taken from public sources Copper mining, with 31 projects, makes up 86.7% of the total investments in the portfolio. Most of these are found in Antofagasta, which, with 13 projects receives 42.7% of the total investment, of which 8 are in base condition and only one in potential.
In second place is the Atacama region, with 6 initiatives which make up 14.4% of the total registry. This region is the one which was most affected with respect to the previous version of the investment register, due to the fact that a large percentage of the projects are in a potential condition. In the investment portfolio for 2015, Atacama has 3 initiatives in the potential condition which make up 70.8% of the total investment in copper projects in the region.
In third place we find the Valparaiso region, which receives 10.5% of the total investment in the project portfolio, specifically the CODELCO projects “Nueva Andina Phase II” and “Mine-Plant Transfer”, both from the Andina Division.
Sharing fourth places are the regions of Tarapacá and O´Higgins, each with 8.1% of the investment portfolio, with initiatives coming from companies such as Teck and BHP Billiton in Tarapacá and with the projects from El Teniente Division of CODELCO and of Valle Central of Amerigo Resources in the case of the O´Higgins region.
Table 8 shows the regional distribution of the global investment in gold, iron, and industrial ore mining.
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Table 8: Investment in gold, iron and industrial ore mining, per region and project condition
Region Total Base Probable Possible Potential Region Project Investment % of total Project Investment Project Investment Project Investment Project Investment Quantity (MMUS$) investment Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$) Quantity (MMUS$)
Antofagasta 2 1,168 1.5% - - 1 665 1 503 - - Atacama 7 6,001 7.8% - - 3 4,540 4 1,461 - - Coquimbo 2 3,086 4.0% 1 198 - - 1 2,888 - - TOTAL 11 10,255 13.3% 1 198 4 5,205 6 4,852 - -
Source: Prepared by COCHILCO, based on information for each project taken from public sources Investing in gold, iron, and industrial ore mining makes up 13.3% of the investment portfolio for 2015-2024 with 11 initiatives, concentrated mainly in 7 projects to be carried out in the Atacama region (7.9% of the portfolio), aimed principally at gold mining (92.2% of the total regional investment).
In Coquimbo two iron projects are being planned, one of which is on a large scale and plans to coproduce copper, which is the case of the “Dominga” project by Andes Iron, while in Antofagasta there are two initiatives to produce industrial minerals, one of which corresponds to a iodine and nitrate project, carried out by Chilean investors in the region, named “Arbiodo”.
3.4. Investment by country of origin
An interesting perspective of the investments to be carried out within the next decade is to consider the nationality of the owners of the operating companies of the projects, as well as those which only invest in the new initiatives by participating as a primary partner. Figure 4 shows the total investment in the portfolio, according to country of origin.
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Figure 4: Total investment in the investment portfolio by country of origin (MMUS$ y %)
MMUS$ 573 MMUS$ 45.489 MMUS$ 825 0,7% 58,9% 1,1% Chile MMUS$ 1.316 1,7% CanadáCanada MMUS$ 2.829 3,7% Australia EE.UU. MMUS$ 2.930 United States 3,8% JapónJapan
MMUS$ 7.032 ReinoUnited Unido Kingdom 9,1% PoloniaPoland
CoreaKorea MMUS$ 16.206 21,0%
Source: Prepared by Cochilco
Investments come from 8 countries, led by Chile with 60% of total participation, coming from companies such as Codelco and Antofagasta Minerals in state and private copper mining, Pucobre and Copec in medium mining, as well as distinct international investments in gold, iron, and industrial ore mining. In second place we find Canada, with a 21.4% participation, from emblematic companies such as Teck Resources, Lundin Mining (who just acquired Candelaria), Kinross, Capstone and the Santo Domingo project, Barrick Gold and other companies focused on investing in medium copper mining and that of industrial minerals.
For a more detailed account, in Table 9 the distribution of investments in copper mine is shown for each country and the total participation in the investment in mining is considered in the registry, all contrasted with the conditionality of the investments.
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Table 9: Distribution of the investment in copper mining per country of origin and condition (MMUS$)
% of the Country of Country total total Base Probable Possible Potential origin investment
Chile 41,500 53.69% 15,551 658 18,836 6,455
Canada 10,612 13.73% 152 1,684 0 8,776
Australia 6,882 8.90% 2,414 467 3,300 700
USA 2,550 3.30% 0 0 0 2,550
Japan 2,777 3.59% 1,500 800 476 0
United Kingdom 1,316 1.70% 1,260 56 0 0
Poland 825 1.07% 0 825 0 0
Korea 573 0.74% 63 510 0 0
TOTAL 65,535 86.5% 20,941 5,001 22,612 18,481
Source: Prepared by COCHILCO, based on information for each project taken from public sources
The prior Assessment is replicated for the different mineral projects other than copper in table 10.
Table 10: Investment in gold, iron, and industrial ore mining, by country of origin and condition (MMUS$)
% of the Country of Country total total Base Probable Possible Potential origin investment
Chile 3,989 5.16% 160 438 3,391 0
Canada 5,593 7.24% 0 4,663 931 0
USA 380 0.49% 0 380 0 0
Australia 150 0.19% 0 0 150 0
China 90 0.12% 0 90 0 0
Japan 52 0.07% 38 14 0 0
TOTAL 10,255 13.3% 198 5,585 4,472 0
Source: Prepared by COCHILCO, based on information for each project taken from public sources
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4. Estimation of the yearly investment distribution in the project portfolio
The estimation of the investment flow in the 2015-2024 project portfolio allows for the observation of the short and medium term progress in the mining investment, in the amount that emerged before 2015, US$ 15,415 million, which corresponds to 19.9% of the current portfolio, the investment to be obtained during the next five-year period from 2015-2019 of US$44,894 million, equaling 58.1% of the portfolio, and the estimate of the remaining amount to be invested in the 2020-2024 period in those projects whose implementation date is set for this time frame, whose investment amount reaches US$16,981 million, equaling 22% of the investment portfolio. Figure 5 graphs the yearly investment distribution in copper mining, and of the other minerals in the 2015 to 2024 period, separated by those already obtained, the yearly amounts for the 2015-2019 period, and finally the remnant to be invested after 2019.
Figure 5: Yearly investments, already obtained and to be obtained, for the investment portfolio according to type of mining
18.000
16.000 CobreCoppe Otros minerales r 14.000
12.000
10.000
MMUS$ 8.000
6.000
4.000
2.000
0 Anterior a 2015 2016 2017 2018 2019 2020- 2024 2015
Source: Prepared by Cochilco However, it is necessary to look at the conditionality of the investment flow, for which, and on the basis of available public information, a yearly investment profile has been estimated according to the anticipated timeline, and has been assigned a condition which reflects the degree of certainty of the implementation for each project.
4.1. Investment distribution in copper mining
Table 11 summarizes the yearly investment flow in coper mining for the following segments: CODELCO; large private mining, medium mining, and metallurgical plants, distribution of the
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investment from degrees of greater to lesser certainty of implementation within the period indicated by the companies which own the projects, meaning, from the base condition to potential.
Table 11: Yearly investment distribution in copper mining according to project condition (MMUS$)
Copper mining according Before Subtotal % of 2015 2016 2017 2018 2019 2020 - 2024 TOTAL to condition 2015 2015 -2019 investment TOTAL 10,800 5,380 7,695 8,515 9,377 8,288 39,254 16,981 67,035 100% Of which: Base 8,576 3,154 2,136 2,211 1,840 2,027 11,368 997 20,941 31% Probable 775 663 1,004 829 266 0 2,762 0 3,501 7% Possible 854 1,003 2,417 3,157 4,027 3,118 13,721 8,037 22,612 34% Potential 595 311 1,138 2,103 3,244 3,143 9,939 7,947 18,481 28% CODELCO 2,308 2,099 3,202 3,766 3,601 4,138 16,805 9,542 28,656 100% of which: Base 2,168 1,540 2,069 2,175 1,840 2,027 9,651 997 12,817 45% Probable 0 0 0 0 0 0 0 0 0 0% Possible 130 526 1,085 1,398 1,532 1,738 6,278 6,740 13,148 46% Potential 10 33 48 193 229 373 876 1,805 2,691 9% Large mining 7,824 2,935 3,833 3,851 5,539 4,150 20,522 7,439 35,785 100% Of which: Base 6,002 1,444 6 0 0 0 1,450 0 7,451 22% Probable 705 823 1,825 847 204 0 3,699 0 4,404 12% Possible 582 415 1,022 1,649 2,495 1,380 6,961 1,297 8,840 25% Potential 535 253 980 1,570 2,840 2,770 8,413 6,142 15,090 42% Medium mining 278 232 644 683 237 0 1,795 0 2,073 100% Of which: Base 16 55 45 36 0 0 136 0 152 7% Probable 70 90 179 197 62 0 527 0 597 29% Possible 142 62 310 110 0 0 482 0 624 30% Potential 50 25 110 340 175 0 650 0 700 34% Metallurgy Plants 390 115 16 0 0 0 131 0 521 100% Of which: Base 390 115 16 0 0 0 131 0 521 100%
Source: Prepared by COCHILCO, based on information for each project taken from public sources Discounting the US$ 10,800 million invested before 2015, the investment with possibilities of implementation within the 2015 and 2024 period in copper mining reaches US$ 56,200 million, of which US$ 39.9 million will be reached in the five year period from 2015 - 2019. Analyzing the initiatives with the greatest probability of development within the timeframes estimated by their owners, these corresponds to 38% of the investment to be implemented within the next five years. Of this group, the projects in base condition make up 25.4% of the investment to be obtained between 2015 and 2019, with a yearly average of 2.28 thousand million USD, leaving an investment remained of less than one thousand million for after 2019, while the initiatives in a
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probable condition only make up a yearly average of around US$ 1.06 thousand million, which corresponds to just 7% of the financing to be obtained in the short term, specifically between 2015 and 2018. Conversely, the projects with a lesser probability of being implemented within the proposed timeframes correspond to 62% of the investment between 2015 and 2019, leaving a remnant of almost US$ 16 thousand million for after 2019. In this group, the projects in possible condition correspond to 34% of the investment in the five year period, contributing a yearly average of US$ 2.7 thousand million, leaving a remnant of US$ 8.04 thousand million for later execution. Furthermore, and unlike the previous register wherein the potential group made up the greatest investment to be implemented in the five year period, this year these projects reach just 28% of the total estimated for the next five years, supplying an average of US$ 1.99 thousand million, and leaving an investment remnant for the 2020-2024 period of around US$ 7.95 thousand million dollars.
4.2. Investment distribution in gold, iron, and industrial minerals
Table 12 summarizes the annual investment in the gold, iron and industrial ore mining segments:
Table 12: Yearly investment distribution in gold, iron, and industrial minerals according to condition (MMUS$) Gold-silver, iron, and Before Subtotal 2020 - % of industrial minerals 2015 2016 2017 2018 2019 TOTAL 2015 2015 -2019 2024 investment according to condition TOTAL 4,615 628 1,903 1,575 1,280 254 5,640 0 10,255 100.0% Of which: Base 178 20 0 0 0 0 20 0 198 3.6% Probable 3,237 478 1,095 640 135 0 2,348 0 5,585 101.0% Possible 1,200 130 808 935 1,145 254 3,272 0 4,472 80.9% Gold 3,283 420 1,003 675 150 0 2,248 0 5,531 100.0% Of which: Probable 3,025 360 720 290 55 0 1,425 0 4,450 80.5% Possible 258 60 283 385 95 0 823 0 1,081 19.5% Iron 1,144 83 205 440 1,050 254 2,032 0 3,176 100.0% Of which: Base 178 20 0 0 0 0 20 0 198 6.2% Probable 42 23 25 0 0 0 48 0 90 2.8% Possible 924 40 180 440 1,050 254 1,964 0 2,888 90.9% Industrial minerals 188 125 695 460 80 0 1,360 0 1,548 100.0% Of which: Probable 170 95 350 350 80 0 875 0 1,045 32.9% Possible 18 30 345 110 0 0 485 0 503 32.5%
Source: Prepared by COCHILCO, based on information for each project taken from public sources
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In gold mining, in investment in 5 projects for 5.5 thousand million dollars is expected, which is concentrated in the probable condition, to be carried out before 2019. Furthermore, it is estimated that the yearly average investment in the gold project portfolio reach 508 million dollars in the 2015- 2018 period.
For iron mining as well as industrial minerals there are no relevant variations in the investment distribution seen.
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5. Estimation of the copper production capacity in Chile through 20266
One of the most important effects coming from the mining investment portfolio is the increase in the maximum production capacity, which translates to an increase in supply for the international market. Following is an estimate of the maximum copper production capacity which Chile could reach by 2026, as a result of the work in the current Operations and the contributions which will be added as the new copper projects are implemented.
5.1. Maximum copper mining capacity in Chile
The maximum productive potential of copper mining in Chile is summarized in Table 13, which indicates the yearly information from 2015 to 2026, broken down into operations and projects according to their conditionality, as an indicator of the degree of reliability of this information. The real production in 2014 is included as a means of reference and comparison. Additionally, the percentage of yearly variation in the maximum capacity of total production is indicated. Considering a horizon of 20267, Chile has the potential of reaching a copper production capacity of 7.56 million tons of copper, a 31.6% above the production registered in 2014, if all of the planned projects are carried out according to their timelines. The maximum production would be registered for this period during 2024, wherein the copper production would reach approximately 7.84 million tons, 36.3% over 2014 production.
Table 13: Estimated production capacity of copper mining in Chile through 2026 (kt of fine Cu)8
CONDITION 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
BASE/ Operations 5,749.5 5,980.8 5.676.7 5,567.2 5,412.0 5,337.9 4,956.3 4,742.6 4,554.2 4,401.0 4,254.0 3,986.7 3,811.5 BASE/ Projects 0,0 359.1 585.8 737.3 748.4 768.7 797.5 907.1 1,000.8 1,139.6 1,190.0 1,255.0 1,270.0 PROBABLE/ Projects 0,0 0,0 0,0 217.6 430.9 479.3 463.8 444.9 435.4 414.0 393.7 314.3 302.0 POSSIBLE/ Projects Cu 0,0 0,0 0,0 18.7 51.9 375.0 546.1 632.2 650.9 770.8 942.4 1,136.4 1,227.8 POSSIBLE/ Projects Co-prod. 0,0 0,0 0,0 0,0 9.0 16.5 18.0 19.0 17.0 20.0 32,0 22.0 21.0 POTENTIAL/ Projects Cu 0,0 0,0 0,0 0,0 25.9 152.5 292.2 651.3 804.3 989.8 1,025.6 963.0 931.4 TOTAL 5,749.5 6,339.8 6,262.5 6,540.8 6,678.0 7,129.8 7,074.0 7,397.2 7,462.6 7,735.2 7,837.8 7,677.5 7,563.8
Yearly change --- 10.3% -1.2% 4.4% 2.1% 6.8% -0.8% 4.6% 0.9% 3.7% 1.3% -2.0% -1.5%
Source: Prepared by Cochilco
6 Copper mining production capacity corresponds to concentrates and SxEw cathodes. The methodologic criteria used to estimate is shown in point 2.6
7 Two years after the last year of implementation registered in this registry (see methodologic criteria shown in point 2.6)
8 Includes the by-productive capacity of copper coming from the gold and iron projects.
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This projection considers the natural declination in production of the current operations in 1.94 million tons, for which the greatest contribution corresponds to the impact in the investment in the projects, which depend on distinct factors internally as well as externally to reach the productive goals, which is determined through the conditionality of the projects. The following graph shows how the copper production will evolve and the growing importance of the contribution of the projects, to increase national productive capacity according to the condition of these.
Figure 1: Maximum copper production capacity according to condition
9.000
8.000
7.000
6.000
5.000
4.000
3.000
2.000 Thousandsoftons of copper fine 1.000
0
Base Probable Posible Potencial
Source: Prepared by Cochilco The total estimate for the production capacity of the copper mining is distributed through the respective copper production capacities in concentrates and in SxEw cathodes, which are shown in tables 14 and 15 as follows.
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Table 14: Estimated Chilean production capacity of fine copper concentrate through 2026 (kt of fine Cu)
CONDITION 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
BASE/ Operations 3,905.6 4,214.3 4,010.6 3,952.0 3,888.0 3,874.7 3,727.8 3,624.3 3,449.1 3,305.2 3,246.8 3,109.7 3,117.4 BASE/ Projects 0,0 325.7 487.0 620.8 626.2 645.6 674.7 783.8 882.2 1,023.6 1,112.6 1,178.0 1,193.4 PROBABLE/ Projects 0,0 0,0 0,0 121.2 320.2 362.0 346.6 332.1 322.5 301.3 290.3 270.1 262.0 POSSIBLE/ Projects Cu 0,0 0,0 0,0 18.7 47.9 369.6 539.5 625.9 644.6 764.5 936.1 1,130.1 1,221.7 POSSIBLE/ Projects Coprod. 0,0 0,0 0,0 0,0 9.0 16.5 18.0 19.0 17.0 20.0 32.0 22.0 21.0 POTENTIAL/ Projects Cu 0,0 0,0 0,0 0,0 25.9 152.5 292.2 651.3 804.3 989.8 1,025.6 963.0 931.4 TOTAL 3,905.6 4,540.1 4,497.6 4,712.7 4,917.2 5,421.0 5,598.9 6,036.5 6,119.8 6,404.4 6,643.6 6,672.9 6,746.9
Yearly Change --- 16.2% -0.9% 4.8% 4.3% 10.2% 3.3% 7.8% 1.4% 4.7% 3.7% 0.4% 1.1%
Source: Prepared by COCHILCO
Table 15: Estimated Chilean production capacity for fine copper in SxEw cathodes through 2026 (Thousand tons.)
CONDITION 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
BASE/ Operations 1,843.9 1,766.4 1,666.1 1,615.3 1,524.0 1,463.2 1,228.5 1,118.3 1,105.0 1,095.8 1,007.2 877.1 69.1 BASE/ Projects 0,0 33,3 98.8 116.4 122.2 123.0 122.8 123.2 118.6 116.0 77.4 77.0 76.6 PROBABLE/ Projects 0,0 0,0 0,0 96.5 110.6 117.2 117.2 112.9 112.9 112.7 103.3 44.2 40.0 POSSIBLE/ Projects 0,0 0,0 0,0 0,0 4.0 5.4 6.5 6.3 6.3 6.3 6.3 6.3 6.1 TOTAL 1,843.9 1,799.8 1,764.9 1,828.1 1,760.8 1,708.9 1,475.1 1,360.7 1,342.8 1,330.8 1,194.2 1,004.5 816.9
Yearly Change --- -2.4% -1.9% 3.6% -3.7% -3.0% -13.7% -7.8% -1.3% -0.9% -10.3% -15.9% -18.7%
Source: Prepared by COCHILCO In each table there is an opposing trend. While the production capacity in concentrates increments by 2.84 million tons by 2026, a 70.9% increase from 2014, the SxEw cathodes may decrease by 1.03 million tons, registering a 55.7% decrease from the same year.
5.1.1. Analysis of hydrometallurgy production
The hydrometallurgical processing of copper into SxEw cathodes shows in the last decade strong signs of decline since its peak in 2009, when it reached 2.12 million tons. The production of SxEw cathodes will be maintained at about 1.8 million tons until 2017, to then decline rapidly by a yearly average rate of 7.7% in the following ten years, reaching a production loss of 1.03 million tons of SxEw cathodes (figure 6). This decrease in SxEw cathode production is due mainly to the depletion of leachable resources and the closing of some copper sites towards the end of the next decade, for example, Collahuasi, Sagasca, Quebrada Blanca, Mantos Blancos, Michilla, Las Cenizas, Franke, Mantoverde and Carmen de Andacollo. Likewise, it is observed that some of the operations of CODELCO, such as
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Chuquicamata (Hidrosur), Radomiro Tomic and Salvador, will reduce their production due to the depletion of leachable resources. With respect to the hydrometallurgy projects considered in this portfolio, these principally correspond to replacement projects and of marginal expansions of current operations, and of four new projects: El Espino, Diego de Almagro and the production of oxides coming from the operations of Distrito Centinela, by Antofagasta Minerals, and of Sierra Gorda, property of KGHM. There are not currently any potential projects for the hydrometallurgy line.
This operational decrease has a direct effect in a lesser demand for sulphuric acid, which will cause a change in the sulphuric acid market in Chile from the condition of structural deficit to an incipient condition of excess by the year 2019. It is worth mentioning that the structural change in the sulphuric market will have negative implications in the importation and exportation structure of this good in the country, as an excess would force producers to export the excess acid, with the following negative implication in the prices of this good. Another impact is the closing of several solvent or electro-winning extraction plants, with no alternative use.
Figure 6: Projection of maximum copper production in cathodes, 2014 – 2026 period
2.000
1.800
1.600
1.400
1.200 PosiblePossible 1.000 ProbableProbable 800 Base Base 600
400
200 Thousand tons of copper in SxEw cathodes SxEw in copper of tons Thousand
0
Source: Prepared by COCHILCO
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5.1.2. Analysis of concentrate production
The project portfolio for 2015-2024 reaffirms that which has been observed in the past few years: the structural change in copper production turns toward copper concentrate production, due to diverse factors such as the geologic conditions of the country, the production changes from old hydrometallurgical operations, etc. This will cause an increase in the maximum production capacity of copper concentrate by 2.84 million tons of fine copper per year by 2026. With this the projected decline will be surpassed from the current operations, without whose projects in development, would decrease production by 788 thousand tons of fine copper with respects to 2014. This substantial increase in production which comes from the concentrate line has strong repercussions in two important aspects of the mining politics in general, which are the increase of the exportable supply of concentrates, without increasing the current production of ER cathodes, and the structural increase of costs in Chilean mining coming from the levels of mineral processing which this type of processing increase brings.
Figure 7: Maximum production projection in copper concentrate, period 2014 - 2026
7.000
6.000
5.000 Potential 4.000 Potencial PossiblePosible 3.000 ProbableProbable Base Base 2.000
1.000 Thousand tons of fine copper concentrate copper fine of tons Thousand
0
Source: Prepared by COCHILCO
a) Exportable concentrate offer from Chile In 2014 2.55 million tons of copper concentrate were exported, equaling 65.3% of the concentrate production of the country, the rest should be understood to have been consumed in the Chilean foundries. Even though the production of the foundries reached 1.36 million tons of fine copper in 2014, previous years reached levels around 1.56 million tons of fine copper, which means that there
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is the capacity of treating the equivalent of 1.6 million tons of fine copper content in the feeder concentrates, due to the capacity expansion projects not being considered for the national foundries9. Toward 2026, the maximum copper production capacity in concentrates will reach 6.75 million tons, reaching 89% of the national copper production participation. However, under the premise that no FURE projects were to exist in the country, this increase in concentrate production would imply that the potential exportation of concentrates would reach 5.2 million tons, or76.9% of the total Chilean concentrate production.
Figure 8: Copper concentrate production and the participation in total production
10.000 100% 89% 85% 87% 9.000 82% 82% 83% 90% 79% 76% 8.000 72% 72% 72% 74% 80% 68% 7.000 70%
6.000 60%
5.000 50%
4.000 40%
3.000 30%
2.000 20%
Thousands of tons of fine copper in concentrate in copper fine of tons of Thousands 1.000 10%
0 0%
Cobre en concentrados a FURE externa CobreCopper en concentrates concentrados to external a FURE FURE nacional Copper concentrates to national FURE Part.Part ofde copper la prod. concentrate de cobre production en concentrados in the country’s en latotal prod. prod. total del país
Source: Prepared by COCHILCO Likewise, it is estimated that the volume of concentrates with copper concentrates will pass the current 13.3 million tons, with an average ore grade of 29.2% copper, to 23.8 million tons, with the average ore grade of 24.1$. Similarly, the volume of concentrates for exportation would surpass the current8.67 million tons to almost double by 2026, reaching 17.26 million tons.
9 Only operational adjustments are expected to be required to comply with the gas emission requirements
(SO2 and others).
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Figure 9: Projection of maximum production of copper concentrates according to destination, 2014 – 2026 period
25,0
20,0
15,0 Million concentrate of tons Million
10,0
5,0
0,0
ConcentradosConcentrates to a nationalFURE nacional FURE ConcentradosConcentrates ato FURE external externa FURE
Source: Prepared by COCHILCO This strong growth in concentrate production could affect the position of the exporters in the negotiations for the costs of treatment and refining, affecting the liquid value of the return, and the tributary utilities of the companies, leaving Chile with a lesser participation in the refined copper business on a worldwide level. Another problem related with this increase in concentrate production is the production of tailings coming from the concentrating plants. Therefore it is estimated that if during 2014 563.5 Mt of tailings were produced, by 2026 an increase of 121.8% will produced more per year, reaching 1,249.7 Mt of tailings (figure 10).
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Figure 10: Projection of maximum tailings production as a result of the copper concentration process, 2014 - 2026
1.300 1.200 1.100 1.000 900 800 700 600 500 400 Million tons of tailings of tons Million 300 200 100 0
Base Probable Possible Potential Base Probable Posible Potencial
Source: Prepared by COCHILCO b) Increase in processing levels and tailings generation Adding to the natural decline of operational parameters in the existing sites it must be considered that there are lower grades in the new projects to be carried out within the next decade, which implies that the mining extraction capacity and of the concentration plants must be of a large size. Figure 11 shows the projected yearly mineral treatment capacity in the concentration plants which are currently in operation, as well as the contribution of the projects are they are implemented according to what is anticipated from the available information.
Source: Prepared by COCHILCO
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Figure 11: Processing capacity in copper concentrating plants through 2026 1.400,0
1.200,0
1.000,0 POTENCIALPOTENTIAL
POSIBLEPOSSIBLE 800,0
PROBABLEPROBABLE 600,0 BASEBASE
400,0 Million Million oftonssulphered minerals 200,0
0,0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Taking this data and comparing it with the fine copper contained in the concentrate to be produced within the next decade, an unfavorable tendency is shown starting in 2015. With a yearly growth rate of 3.4% of fine copper obtainable between the years of 2015 and 2026, the growth rate of the ore treatment would be of 5.6% yearly, from 576.9 million tons of mineral treated in 2014 to an estimated 1,273.5 million tons of ore to be treated by 2026 (figure 12).
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Figure 12: Relationship between treated mineral and fine copper content in produced concentrate
14 1.400
12 1.200
10 1.000 ore of Mtsulphured
8 800
Mt of fine copper in in of concentrate copper Mtfine 6 600
4 400
2 200
0 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 Production of fine copper concentrate Processed Mineral in concentration plant Producción de cobre fino en concentrados Mineral procesado en planta concentradora
Source: Prepared by COCHILCO Direct consequences of this structural situation, which signifies a greater quantity of material to be extracted: a. Greater capital investment and operation costs. b. Greater consumption intensity per unit of copper recovered. c. Greater consumption of water and other inputs depending more on the volume of the material to be treated than the copper content.
Furthermore, several of the concentrate projects are considering the use of sea water, with or without desalination, as well as the impulsion system to the place of operations. For this concept the capital costs would also rise for the required installations and the operation, because of the electricity consumed. This last also requires a clear policy to define the correct manner to introduce this new “hydrological market” in the country. In summary, if currently 10,849 tpd are produced of fine copper concentrate, as a product of the processing of 1.60 Mtpd of tailings (amounts from 2014), the copper mining project portfolio for 2015-2024 will increase the fine copper concentrate to 18,741 tpd, the product of the processing of around 3.54 Mtpd of minerals in the concentration plants, which will generate around 3.47 Mtpd of tailings toward 2026. This signifies an increase in daily treatment and tailings generation of close to 121% only to increase the daily copper production by 32%.
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5.2. Maximum production capacity of copper mines per region
As well as observing the global behavior of copper production in the country, it is necessary to look at how it is manifested on a regional level, where the investment process has an economic impact which is prolonged after the product of the investment is transformed into operations. The magnitude and use of the maximum production capacity is what generates the long term effect on the activities directly related with the mining, and very importantly, in the diversity of the activities indirectly provided of goods and services which is very relevant to the region where it is carried out. The following tables show the production capacity estimates of copper mining corresponding to each productive region, breaking them down for the respective profiles of maximum concentrates and SxEw cathodes.
Table 16: Maximum regional productive capacity of copper mines in Chile through 2026 (thousands of tons of fine copper)
REGION 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026
XV. Arica-Parinacota 2.0 4.7 5.8 5.8 5.8 5.3 5.3 5.3 4.9 4.9 4.9 4.8 2.3 Operations 2.0 4.7 5.8 5.8 5.8 5.3 5.3 5.3 4.9 4.9 4.9 4.8 2.3 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 I. Tarapacá 608.0 668.7 663.4 661.0 656.6 720.3 728.3 769.1 769.1 753.1 735.5 664.8 657.7 Operations 608.0 668.7 663.4 584.5 580.1 534.5 485.7 473.5 473.5 461.6 461.6 450.0 450.0 Projects 0.0 0.0 0.0 76.5 76.5 185.8 242.6 295.6 295.6 291.5 273.9 214.8 207.8 II. Antofagasta 3,047.6 3,458.4 3,330.0 3,565.0 3,490.3 3,828.9 3,796.3 3,998.1 4,020.3 4,215.6 4,190.4 3,947.4 3,837.9 Operations 3,047.6 3,108.1 2.765.6 2,757.0 2,621.5 2,592.6 2,372.2 2,205.0 2,045.9 1,980.5 1,897.0 1,696.1 1,600.4 Projects 0.0 350.4 564.4 808.0 868.9 1,236.4 1,424.0 1,793.2 1,974.4 2,235.1 2,293.3 2,251.3 2,237.4 III. Atacama 430.8 538.0 560.3 606.6 793.0 837.8 809.6 894.2 928.9 1,013.7 1,061.0 992.2 980.7 Operations 430.8 538.0 560.3 564.8 561.9 585.6 489.9 470.6 456.0 438.0 424.2 409.6 398.9 Projects 0.0 0.0 0.0 41.7 231.2 252.2 319.7 423.6 473.0 575.7 636.8 582.6 581.8 IV. Coquimbo 493.2 485.2 491.2 503.7 550.9 570.3 573.0 566.3 564.3 560.2 573.0 555.6 554.4 Operations 493.2 485.2 491.2 484.9 490.0 481.9 472.1 466.6 466.5 461.0 460.9 454.8 454.8 Projects 0.0 0.0 0.0 18.7 60.9 88.4 100.8 99.8 97.8 99.2 112.1 100.8 99.6 V. Valparaíso 290.2 278.7 288.5 283.6 275.4 265.6 271.4 269.5 289.3 302.5 407.3 647.6 669.5 Operations 290.2 278.7 288.5 283.6 275.4 265.6 271.4 269.5 289.3 302.5 319.3 336.7 315.5 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 88.0 310.9 354.0 XIII. Metropolitana 404.5 434.6 434.2 429.2 428.7 423.6 423.7 418.7 418.2 413.4 393.8 389.5 389.2 Operations 404.5 434.6 434.2 429.2 428.7 423.6 423.7 418.7 418.2 413.4 393.8 389.5 389.2 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 VI. O'Higgins 473.1 471.5 489.1 486.0 477.2 478.0 466.4 475.8 467.5 471.8 471.9 475.6 472.1 Operations 473.1 462.8 467.6 457.3 448.6 448.9 436.0 433.4 399.8 339.1 292.3 245.3 200.5 Projects 0.0 8.7 21.4 28.7 28.7 29.1 30.4 42.4 67.7 132.7 179.6 230.3 271.6 TOTAL 5,749.5 6,339.8 6,262.5 6,540.8 6,678.0 7,129.8 7,074.0 7,397.2 7,462.6 7,735.2 7,837.8 7,677.5 7,563.8 Operations 5,749.5 5,980.8 5,676.7 5,567.2 5,412.0 5,337.9 4,956.3 4,742.6 4,554.2 4,401.0 4,254.0 3,986.7 3,811.5 Projects 0.0 359.1 585.8 973.6 1,266.0 1,791.9 2,117.6 2,654.5 2,908.5 3,334.2 3,583.8 3,690.7 3,752.2
Source: Prepared by COCHILCO
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Table 17: Maximum regional productive capacity of fine copper concentrates by2026 (Thousands of tons)
REGION 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 XV. Arica-Parinacota 0.00 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Operations 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 I. Tarapacá 445.4 511.1 511.1 498.2 498.2 599.3 656.1 700.7 700.7 684.7 676.4 664.8 657.7 Operations 445.4 511.1 511.1 498.2 498.2 485.7 485.7 473.5 473.5 461.6 461.6 450.0 450.0 Projects 0.0 0.0 0.0 0.0 0.0 113.6 170.4 227.2 227.2 223.1 214.8 214.8 207.8 II. Antofagasta 1,558.9 2,028.2 1,922.7 2,111.2 2,107.2 2,465.9 2,553.7 2,863.9 2,898.7 3,097.9 3,176.7 3,057.4 3.,27.9 Operations 1,558.9 1,711.2 1,457.1 1,439.6 1,390.6 1,392.6 1,292.6 1,234.0 1,083.0 1,018.8 1,000.8 923.0 1,007.0 Projects 0.0 317.0 465.6 671.6 716.6 1,073.3 1,261.2 1,630.0 1,815.8 2,079.1 2,175.9 2,134.3 2,120.8 III. Atacama 309.1 412.9 441.8 480.4 667.4 704.3 731.8 817.7 856.5 948.7 999.3 934.5 927.5 Operations 309.1 412.9 441.8 438.6 440.4 457.1 417.1 398.6 388.0 377.2 366.7 356.1 345.7 Projects 0.0 0.0 0.0 41.7 227.0 247.2 314.7 419.2 468.5 571.5 632.6 578.4 581.8 IV. Coquimbo 477.8 466.9 473.6 486.7 524.8 545.4 556.7 550.3 548.3 544.4 557.2 540.6 539.6 Operations 477.8 466.9 473.6 468.0 468.0 462.4 462.4 456.9 456.9 451.5 451.5 446.1 446.1 Projects 0.0 0.0 0.0 18.7 56.9 83.0 94.3 93.5 91.5 92.9 105.8 94.5 93.5 V. Valparaíso 274.9 264.3 274.3 269.6 261.6 252.0 258.0 256.3 276.3 289.7 394.7 637.1 659.1 Operations 274.9 264.3 274.3 269.6 261.6 252.0 258.0 256.3 276.3 289.7 306.7 326.2 305.1 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 88.0 310.9 354.0 XIII. Metropolitana 368.3 387.2 387.2 382.6 382.6 378.1 378.1 373.7 373.7 369.3 369.3 364.9 364.9 Operations 368.3 387.2 387.2 382.6 382.6 378.1 378.1 373.7 373.7 369.3 369.3 364.9 364.9 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 VI. O'Higgins 471.3 469.5 487.1 484.0 475.2 476.0 464.4 473.8 465.5 469.8 469.9 473.6 470.1 Operations 471.3 460.8 465.6 455.3 446.6 446.9 434.0 431.4 397.8 337.1 290.3 243.3 198.5 Projects 0.0 8.7 21.4 28.7 28.7 29.1 30.4 42.4 67.7 132.7 179.6 230.3 271.6 TOTAL 3,905.6 4,540.1 4,497.6 4,712.7 4,917.2 5,421.0 5,598.9 6,036.5 6,119.8 6,404.4 6,643.6 6,672.9 6,746.9 Operations 3,905.6 4,214.3 4,010.6 3,952.0 3,888.0 3,874.7 3,727.8 3,624.3 3,449.1 3,305.2 3,246.8 3,109.7 3,117.4 Projects 0.0 325.7 487.0 760.7 1,029.2 1,546.2 1,871.0 2,412.1 2,670.7 3,099.2 3,396.7 3,563.3 3,629.5
Source: Prepared by COCHILCO
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Table 18: Maximum regional productive capacity of fine copper in SxEw cathodes by 2026 (Thousands of tons)
REGION 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 XV. Arica-Parinacota 2.0 4.7 5.8 5.8 5.8 5.3 5.3 5.3 4.9 4.9 4.9 4.8 2.3 Operations 2.0 4.7 5.8 5.8 5.8 5.3 5.3 5.3 4.9 4.9 4.9 4.8 2.3 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 I. Tarapacá 162.6 157.6 152.3 162.8 158.4 121.0 72.2 68.4 68.4 68.4 59.1 0.0 0.0 Operations 162.6 157.6 152.3 86.3 81.9 48.8 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Projects 0.0 0.0 0.0 76.5 76.5 72.2 72.2 68.4 68.4 68.4 59.1 0.0 0.0 II. Antofagasta 1,488.7 1,430.2 1,407.3 1,453.8 1,383.1 1,363.1 1,242.5 1,134.2 1,121.6 1,117.7 1,013.6 890.1 710.0 Operations 1,488.7 1,396.9 1,308.5 1,317.4 1,230.9 1,200.0 1,079.7 971.0 963.0 961.7 896.3 773.1 593.4 Projects 0.0 33.3 98.8 136.4 152.2 163.0 162.8 163.2 158.6 156.0 117.4 117.0 116.6 III. Atacama 121.7 125.1 118.6 126.2 125.6 133.4 77.9 76.5 72.4 65.0 61.7 57.7 53.2 Operations 121.7 125.1 118.6 126.2 121.4 128.4 72.9 72.1 68.0 60.8 57.5 53.5 53.2 Projects 0.0 0.0 0.0 0.0 4.2 5.0 5.0 4.4 4.4 4.3 4.3 4.2 0.0 IV. Coquimbo 15.5 18.3 17.6 17.0 26.1 24.9 16.3 16.0 15.9 15.9 15.8 15.0 14.8 Operations 15.5 18.3 17.6 17.0 22.1 19.5 9.7 9.7 9.6 9.5 9.5 8.7 8.6 Projects 0.0 0.0 0.0 0.0 4.0 5.4 6.5 6.3 6.3 6.3 6.3 6.3 6.1 V. Valparaíso 15.3 14.4 14.2 14.0 13.8 13.6 13.4 13.2 13.0 12.8 12.6 10.5 10.3 Operations 15.3 14.4 14.2 14.0 13.8 13.6 13.4 13.2 13.0 12.8 12.6 10.5 10.3 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 XIII. Metropolitana 36.2 47.5 47.1 46.5 46.0 45.5 45.5 45.1 44.6 44.1 24.5 24.6 24.3 Operations 36.2 47.5 47.1 46.5 46.0 45.5 45.5 45.1 44.6 44.1 24.5 24.6 24.3 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 VI. O'Higgins 1.8 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Operations 1.8 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0 Projects 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 TOTAL 1,843.9 1,799.8 1,764.9 1,828.1 1,760.8 1,708.9 1,475.1 1,360.7 1,342.8 1,330.8 1,194.2 1,004.5 816.9 Operations 1,843.9 1,766.4 1,666.1 1,615.3 1,524.0 1,463.2 1,228.5 1,118.3 1,105.0 1,095.8 1,007.2 877.1 694.1 Projects 0.0 33.3 98.8 212.9 236.9 245.7 246.6 242.4 237.8 235.0 187.0 127.5 122.7
Source: Prepared by COCHILCO Antofagasta, maintains the leadership of copper production, making up 50.7% of the maximum production expected by 2026. Even though the production of concentrates will increase by 100.6%, this will only create an net increase of 50.7%, affected by the loss seen of 778.7 thousand tons of SxEw cathodes, equaling -52.3% of the production from 2014. Atacama will maintain the second place in copper production, with a high level of production increase which will be raised specifically by an increase of almost 200%, coming not only from the copper production initiatives, but also from the coproduction of the projects of gold and iron mining, which would leave available a capacity of 980 thousand tons of fine copper, over the 430.8 thousand tons produced in 2014. As in the Antofagasta region, the productive increase in concentrate will help to reduce the productive loss coming from the hydrometallurgical operations, which will fall by -56.3% by 2026. Furthermore, this region is affected by situations which will slow the development of the projects, even more if we consider that the greater part of the projects from this region have
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a lesser probability of implementation within the time frames estimated by the companies (possible and potential). Valparaiso, in this report, displaces Tarapacá as the third most important region, for two important motives. The first is due to Tarapacá suffering a strong decline in production towards 2024 where four of the most important hydrometallurgical operations, Cerro Colorado, Quebrada Blanca, Collahuasi, and Sagasca, stop operating, thereby losing almost 163 thousand tons of fine copper, some of which are slightly recovered by the sulphuric operations of Collahuasi and the Quebrada Blanca Hipógeno project. Tarapacá, the third most important, bases the productive development on the potential expansion of Collahuasi, however if it is not completed within the time frame, the region will see the copper production capacity drastically reduced. The second reason that it has passed the third place of productive growth to the region of Valparaíso is the implementation within the period of the expansion of Andina, with which it will increase the production level from 290.2 thousand tons of fine copper registered in 2014 to 669.5 thousand tons by 2026, creating an increase of 130.7%, which is the greatest regional increase during the period, and slightly higher than the increase of Atacama. Coquimbo will remain in fifth place, with contributions from El Espino, Domingo and the expansion Marginal of Los Pelambres. Likewise, O´Higgins will remain in the sixth place for growth, due to the increase in production foreseen with the implementation of the “Nuevo Nivel Mina” in El Teniente, and the Metropolitan region remains with a relatively stable production because of the contribution to the Los Bronces -- Phase VII project. Finally we can deduce that the mining investment will diminish in the northern zone of the country, and stepping up in the center-south zone with the following offsetting of the productive increases to this zone.
5.3. Global estimate of production capacity of other minerals
The estimate of the contribution to the maximum production capacity thought 2026 for mineral substances such as gold, silver, molybdenum, iron and industrial minerals will only be done on a global level, and not yearly, different from what has been shown previously in the projections of copper production. For gold, molybdenum, and iron, the maximum production capacity is shown, according to the background information of the compiled projects, comparing the current situation with respects to the possible scenario toward 2026. In the case of silver, for being a co-product which depends on the gold mining activities, only the maximum estimated production of the country will be seen for each project, and the possible contribution to the maximum production capacity of the country once the projects being their operations. For industrial minerals only the contributions for each project considered in this portfolio will be shown.
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5.3.1. Gold and silver production capacity
The summary of the contribution of the projects to the portfolio to the maximum production capacity for gold and silver, respectively, is observed in table 19.
Table 19: Contribution to maximum production capacity of gold and silver according to project MAX. PRODUCTION
Gold Silver PROJECT CONTROLLER IMPLEMENTATION (Kg Au (ton Ag content) content)
Gold mining (primary production reposition) La Coipa Fase 7 Compañía Minera Mantos de Oro 2017 6,220 --- Gold Mining (primary production additional) Nueva Esperanza - Arqueros Laguna Resources Chile 2016 500 170 Pascua Cía. Minera Nevada 2016 19,830 825 Caspiche Óxidos Eton Chile 2017 3,800 --- Cerro Maricunga Atacama Pacific Gold Chile 2017 6,840 --- Copper mining (secondary production additional) Planta Recuperadora de Metales Planta Recuperadora de Metales SpA 2016 5,000 500 Santo Domingo Minera Santo Domingo 2017 470 --- El Espino El Espino S.A. 2017 780 --- Productora Sociedad Minera El Águila Ltda. 2018 1,307 --- Diego de Almagro Compañía Minera Sierra Norte S.A. 2018 713 --- Distrito Centinela Minera Centinela 2019 4,670 --- Total production contribution 43,910 1,495 Source: Prepared by COCHILCO. The contribution of gold mining in Chile comes from two sources: directly from gold mining (primary production) and as a co-product of copper mining (secondary production). Thanks to the contribution of the registered projects, through 2026 the maximum production capacity of thus metal could reach 80.5 tons of gold content, a 75% increase over the 46 tons registered in 2014. In the case of silver, the projects in this report will reach some 1,495 tpa of silver by 2026 over the current production, which in 2014 reached 1.572 tons of silver.
5.3.2. Molybdenum production capacity
Molybdenum production in the country is a by-product of copper mining. In the last 10 years between 33.7 thousand and 48.8 thousand tpa of Mo concentrate has been recovered as
molybdenite (MoS2) wherein in 2014 reached the maximum production of the last decade. Some copper projects in the investment portfolio also contemplate the reclaiming of molybdenum:
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a) New projects which consider recovering molybdenum as a co-product of the future copper concentrate production. For this effect the projects considered are: Actualización de Esperanza, Spence Growth Project, Quebrada Blanca Fase II and Relincho. b) Initiatives which seek to expand or replace current concentrate production, and therefore, will permit to maintain the stable current production of molybdenum and to supply new production. Among the initiatives associated with this type of project are the structured projects of CODELCO. The total contribution of the aforementioned projects is shown in table 20.
Table 20: Maximum molybdenum production capacities per project Maximum Project Controller Implementation production (tpa) Valle Central Expansión Minera Valle Central 2015 360 Actualización Esperanza Minera Esperanza 2015 6,000 Sulfuros RT Fase II Div. Radomiro Tomic 2019 - 2022 10,000 Spence Growth Project Pampa Norte 2019 3,800 Rajo Inca Div. Salvador 2020 2,000 Chuquicamata Subterránea Div. Chuquicamata 2020 22,000 Quebrada Blanca Fase II Teck 2020 5,200 Nuevo Nivel Mina Div. El Teniente 2021 8,000 Relincho Teck 2022 5,100 Nueva Andina Fase II Div. Andina 2024 7,000
Total contribution- production maintenance 69,460
Source: Prepared by COCHILCO Therefore it is estimated that by 2026 the maximum capacity for molybdenum recovery will reach 95.6 thousand tpa, a 96% growth rate with respects to the production from 2014, which implies an average yearly growth rate of 5.3% until 2026.
5.3.3. Iron production capacity
The production level of iron mining reached 18.87 Mt of iron ore in 2014, equaling approximately 11.1 Mt of fine Fe content.10 The primary iron production or co-production projects in this update will contribute 18.8 Mt of iron ore by 2026, making approximately 11.9 Mt of fine content iron. The details of the estimated contribution of the projects is shown in table 21.
10 Iron products have an iron content of between 58 and 65%.
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Table 21: Estimate of new iron production capacities per project
Maximum production (ktpa) Project Controller Implementation Iron Fine content minerals Iron mining Romeral Fase V CAP 2015 2,500 1,475 Oso Negro Minera San Fierro 2016 1,091 600 Dominga Andes Iron 2018 11,000 7,370 Copper mining Santo Domingo Capstone Mining 2017 4,200 2,478 Total contribution to Fe production capacity 18,791 11,923
Source: Prepared by COCHILCO. To summarize, due to the project portfolio with direct iron production, or associated co-production, the maximum production of the country by 2026 will be situated around 33.3 Mt of iron ore, which reflects an 80% growth with respects to that registered in 2014.
5.3.4. Industrial minerals
Among the investment projects in the area of saltpeter, is found the Pampa Blanca Expansion by SQM, displaced in the previous time frame by two years, and the Arbiodo Project by Ingenieros Asesores Ltda., linked to national capitals, which is in the process of restructuring the EIA presented in March of 2015 and then withdrawn by the company. The first plans to increase the production of iodide, by SQM to 10,000tpa of iodine equivalent and produce around 1,293,000 tpa of NaNO3. The second initiative seeks to produce around 2,700 tpa of iodine and 400,000 tpa of nitrates, including 20,000 tpa of boric acid.
In another area of non-metal mining, White Mountain Titanium with the Cerro Blanco project will produce titanium dioxide (TiO2) at an estimated capacity of 200 ktpa of concentrate (95% TiO2), by 2016. It is worth noting that this project is only waiting for the investment decision, as in May of 2015 it received the approved RCA from the Environmental Evaluation Service.
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6. Comparison of the project portfolios in 2015 and 2014
The investment project portfolio in Chilean mining updated in July of 2015 contemplates 41 initiatives, versus the 53 included in the project portfolio informed in July of 201411, 12 but with a smaller investment estimated in 29,062 million dollars.
The changes registered in the condition of implementation, timeframe and value observed in the 2015 portfolio with respects to the previous correspond principally to the following: a) The implementation of 6 projects considered in the 2014 portfolio, valued in US$ 7,587 million, which are excluded in the new portfolio. b) Ten initiatives were removed from the portfolio for restructuring or because the owning companies are in the process of adjusting their assets, for which there is no clear date when they are going to reinitiate the studies or the investment decision, which reach an estimated investment in 2014 of US$ 28,223 million. Of these projects only El Morro was affected by issues related with Convenio 169 of the OIT, which translated into the approved RCA being annulled and a return to the pre-feasibility stage of engineering studies. c) Five new projects were incorporated into the portfolio with a value of US$ 5,580 million. Of these, four correspond to copper mining, one of which is an expansion of Los Bronces, a renewal project in Quebrada Blanca, which will allow for a future project of Sulphur, and the new BHP Billiton project which plans to extend the lifespan of the Spence site through a Sulphur line and the expansion of the Sulphur line and a new oxides line for the new operations at Sierra Gorda, by KGHM. The fifth project belongs to industrial minerals (Arbiodo). d) There are 10 projects which did not see any changes with respects to the report from 2014, evaluated in US$ 11,103 million. e) The Escondida OGP I is the only project which only announced a modification in the investment amount, from US$ 3,838 million estimated in 2014 to US$ 4,199 million, which is a net increase of 361 million dollars. f) Furthermore for eight projects the companies have announced a delay in the previous implementation date by one to three years, notwithstanding there not being a change in the conditions of realization, nor in the budgeted investment amount, which reaches US$ 18,416 million.
11 Considering “Other development projects” and “Information projects” of Codelco in both portfolios.
12 See “Investment in Chilean mining- Project portfolio 2014-2023” (DE 06/2014)
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g) Finally, sixteen initiatives show modifications in their condition of materialization, value and/or timeframes for implementation. Positive cases include Encuentro Oxidos and Modifications El Tesoro from Antofagasta Minerals, which passed on to base condition, as did Chuquicamata Subterranea, however this last suffered a year´s delay with respect to the previous report. The changes in these initiatives generated an increase in the net investment by US$ 2,709 million.
The projects which are in this position are duly marked in tables 22 and 23, wherein the projects are consigned to the list of projects in the portfolio with the variations registered with regards to the previous year.
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Table 22: Comparison of investment portfolios 2015 vs 2014 (part 1) CONDITION CONDITION DIFFERENCE IN IMPEMENTATION INVESTMENT INVESTMENT IMPLEMENTATION PER PER INVESTMENT PROJECTS PORTFOLIO REGION PORTFOLIO 2014 PORTFOLIO 2015 PORTFOLIO 2015 PORTFOLIO PORTFOLIO 2015 - 2014 2014 (MMUS$) (MMUS$) 2014 2015 (MMUS$) 6 PROJECTS WHICH WERE IMPLEMENTED 7,587 --- -7,587 PAMPA HERMOSA 2014 2014 Tarapacá BASE --- 1,033 --- -1,033 CERRO NEGRO NORTE 2014 2014 Atacama BASE --- 1,200 --- -1,200 ESCONDIDA NUEVA PILA LIXIVIACIÓN ÓXIDOS 2014 2014 Antofagasta BASE --- 721 --- -721 PLANTA NITRATO POTASIO (NPT4) COYA SUR 2014 2014 Antofagasta BASE --- 250 --- -250 SIERRA GORDA 2014 2014 Antofagasta BASE --- 4,240 --- -4,240 BELLAVISTA 2015 2014 Atacama BASE --- 143 --- -143 10 PROJECTS REMOVED FROM PORTFOLIO FOR RESTRUCTURING 28,223 --- -28,223 JERÓNIMO 2016 --- Atacama PROBABLE --- 423 --- -423 LOMAS BAYAS III SULFUROS 2018 --- Antofagasta POTENTIAL --- 1,600 --- -1,600 TOVAKU 2018 --- Antofagasta POTENTIAL --- 600 --- -600 LOBO - MARTE 2019 --- Atacama POTENTIAL --- 800 --- -800 INCA DE ORO 2019 --- Atacama POTENTIAL --- 600 --- -600 VOLCÁN 2019 --- Atacama POTENTIAL --- 800 --- -800 CERRO CASALE 2020 --- Atacama POTENTIAL --- 6,000 --- -6,000 EL MORRO 2021 --- Atacama POTENTIAL --- 3,900 --- -3,900 COLLAHUASI EXPANSIÓN FASE III 2022 --- Tarapacá POTENTIAL --- 6,500 --- -6,500 AMPLIACIÓN LOS PELAMBRES IV 2022 --- Coquimbo POTENTIAL --- 7,000 --- -7,000 5 NEW PROJECTS INCORPORATED TO PORTFOLIO 2014 --- 5,580 5,580 ACTUALIZACIÓN QUEBRADA BLANCA --- 2016 Tarapacá --- PROBABLE --- 165 165 SIERRA GORDA EXPANSIÓN 220 KTPD --- 2017 Antofagasta --- PROBABLE --- 1,500 1,500 ARBIODO --- 2017 Antofagasta --- POSSIBLE --- 503 503 LOS BRONCES - FASE 7 --- 2017 Metropolitana --- PROBABLE --- 112 112 SPENCE GROWTH OPTION --- 2019 Antofagasta --- POSSIBLE --- 3,300 3,300 10 PROJECTS NOT MODIFIED 11,103 11,103 0 ANTUCOYA 2015 2015 Antofagasta BASE BASE 1,900 1,900 0 ACTUALIZACIÓN ESPERANZA 2015 2015 Antofagasta BASE BASE 630 630 0 VALLE CENTRAL EXPANSIÓN 2015 2015 O'Higgins BASE BASE 152 152 0 PLANTA RECUPERADORA DE METALES 2016 2016 Antofagasta BASE BASE 96 96 0 CASPICHE ÓXIDOS 2017 2017 Atacama POSSIBLE POSSIBLE 344 344 0 CERRO COLORADO CONTINUIDAD OPERACIONAL 2017 2017 Tarapacá PROBABLE PROBABLE 467 467 0 EL ESPINO 2017 2017 Coquimbo POSSIBLE POSSIBLE 624 624 0 PRODUCTORA 2018 2018 Atacama POTENTIAL POTENTIAL 700 700 0 AMPLIACIÓN MARGINAL LOS PELAMBRES 2018 2018 Coquimbo POSSIBLE POSSIBLE 1,190 1,190 0 EL ABRA MILL PROJECT (e) 2021 2021 Antofagasta POTENTIAL POTENTIAL 5,000 5,000 0 (e) Implementation estimated by COCHILCO, based on public information from the companies Source: Prepared by Cochilco, based on public information from the mining companies.
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Table 23: Comparison of investment portfolios 2015 vs 2014 (part 2)
CONDITION CONDITION DIFFERENCE IN INVESTMENT INVESTMENT IMPLEMENTATION IMPLEMENTATION PER PER INVESTMENT PROJECTS REGION PORTFOLIO 2014 PORTFOLIO 2015 PORTFOLIO 2014 PORTFOLIO 2015 PORTFOLIO PORTFOLIO 2015 - 2014 (MMUS$) (MMUS$) 2014 2015 (MMUS$) 1 PROJECT THAT ONLY CHANGED VALUE 3,838 4,199 361 ESCONDIDA OGP I 2015 2015 Antofagasta BASE BASE 3,838 4,199 361 8 PROJECTS THAT ONLY HAD A DELAY IN THE TIMEFRAME 18,416 18,416 0 ROMERAL FASE V 2014 2015 Coquimbo BASE BASE 198 198 0 NUEVA ESPERANZA - ARQUEROS 2016 2017 Atacama POSSIBLE POSSIBLE 150 150 0 CERRO BLANCO (e) 2016 2017 Atacama POSSIBLE POSSIBLE 380 380 0 PASCUA (e) 2016 2017 Atacama PROBABLE PROBABLE 4,250 4,250 0 CANDELARIA 2030 2017 2018 Atacama PROBABLE PROBABLE 460 460 0 DOMINGA 2018 2019 Coquimbo POSSIBLE POSSIBLE 2,888 2,888 0 QUEBRADA BLANCA HIPÓGENO (e) 2019 2020 Tarapacá POTENTIAL POTENTIAL 5,590 5,590 0 RELINCHO (e) 2021 2022 Atacama POTENTIAL POTENTIAL 4,500 4,500 0 16 PROJECTS THAT WERE REDEFINED CHANGING VALUE, CONDITION AND/OR TIMEFRAME 31,359 34,068 2,709 AMPLIAC. PAMPA BLANCA 2015 2017 Antofagasta BASE PROBABLE 665 665 0 PLANTA DE TRATAMIENTO DE MOLIBDENO 2015 2016 Antofagasta BASE BASE 394 425 31 OSO NEGRO 2015 2016 Atacama POSSIBLE PROBABLE 90 90 0 MODIFICACIONES EL TESORO 2016 2016 Antofagasta PROBABLE BASE 86 86 0 ENCUENTRO ÓXIDOS 2016 2016 Antofagasta PROBABLE BASE 600 636 36 CERRO MARICUNGA 2017 2018 Atacama POSSIBLE POSSIBLE 515 587 72 LA COIPA FASE 7 (e) 2017 2018 Atacama POSSIBLE PROBABLE 200 200 0 SANTO DOMINGO 2017 2018 Atacama POSSIBLE PROBABLE 1,700 1,700 0 DIEGO DE ALMAGRO 2018 2018 Atacama POSSIBLE PROBABLE 597 597 0 SULFUROS RT FASE II 2018 2019 Antofagasta POSSIBLE POSSIBLE 5,226 5,459 233 CHUQUICAMATA SUBTERRÁNEA 2019 2020 Antofagasta POSSIBLE BASE 4,115 3,816 -299 DESARROLLO DISTRITO CENTINELA (*) 2020 2019 Antofagasta POTENTIAL POSSIBLE 2,700 4,350 1,650 NUEVO NIVEL MINA 2018 2021 O'Higgins BASE BASE 3,431 4,920 1,489 RAJO INCA 2019 2020 Atacama POTENTIAL POTENTIAL 3,036 2,691 -345 TRASPASO MINA-PLANTA 2021 2022 Valparaíso BASE BASE 1,417 1,323 -94 NUEVA ANDINA FASE II 2023 2024 Valparaíso POSSIBLE POSSIBLE 6,586 6,524 -62 OTHER INVESTMENTS BY CODELCO 4,325 3,923 -402 OTHER DEVELOPMENT PROJECTS 2014 - 2018 2015 - 2019 Various BASE BASE 3,123 2,758 -365 INFORMATION PROJECTS 2014 - 2018 2015 - 2019 Various POSSIBLE POSSIBLE 1,203 1,165 -38 DIFFERENCE IN THE PORTFOLIO 2014 vs 2015 (MMUS$) -27,562 (e) Implementation estimated by COCHILCO, based on public information from the mining companies (*) In 2013 it was called "Distrito Centinela", after 2014 just "Encuentro Sulfuros" Source: Prepared by Cochilco, based on public information from the mining companies.
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Furthermore, it is POSSIBLE to see the most important global changes between both portfolios according to the implementation condition and mining type, an association between both previous scenarios, and a regional comparison of the investment (tables 24, 25, 26 y 27).
Table 23: Comparison of portfolios 2015 and 2014 per project condition
2014 – 2023 2015 - 2024 Condition of materialization Investment Part. % of Project Investment Part. % of Project (MMUS$) total Quantity (MMUS$) total Quantity BASE 23,431 22,3% 17 21,139 27.4% 13 PROBABLE 6,286 6,0% 6 10,206 13.2% 11 POSSIBLE 25,808 24,6% 15 27,464 35.5% 13 POTENTIAL 49,326 47,0% 15 18,481 23.9% 5 BASE + PROBABLE 29,717 28,3% 23 31,345 40.6% 24 POSSIBLE + POTENTIAL 75,134 71,7% 30 45,945 59.4% 18
Source: Prepared by Cochilco
In the previous table it is seen that the portfolio with the highest probability of completion within the timeline estimated by the owning companies (base + probable) remain almost stable, in number of investments as well as in investment amount (increase in US$ 1,628 million), however, it changes from having a 28.3% participation of the total portfolio in 2014 to being 40.6% of the portfolio in 2015. It is possible to take from this comparison that two initiatives passed from probably to base, one initiative in probable condition was removed from the portfolio for restructuring, and one is added to the probable condition, specifically the Sierra Gorda expansion, and five advance from the possible and potential conditions up to probable.
On the contrary, those initiatives with a lesser probability of maintaining the advancement terms indicated by their owners and investors (possible and potential) diminished by almost 30%, due in part to the removal of 9 initiatives from the potential category for restructuring13 and the change of five projects to probable condition. However, to this group two new initiatives were added, Arbiodo and Spence Growth Project as possible. This shows that the weakness of the investment portfolio is in this group.
Table 25 shows the comparison according to mining type, wherein it is observed that the project portfolio for copper is reduced by almost 17% due in part to the removal of the Escondida Nueva Pila de Lixiviación and Sierra Gorda, both of which have been in operation since the first trimester of 2014, mainly because of the removal from the 2014-2024 portfolio the expansion initiatives of Collahuasi and Los Pelambres.
13 Letter b) chapter 6, which indicates the removal of 10 of the initiatives of which 9 are potential and one probable.
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Table 24: Comparison of portfolios 2015 and 2014 by type of mining
2014 - 2023 2015 – 2024
Type of mining Investment Part. % of Project Investment Part. % of Project (MMUS$) total Quantity (MMUS$) total Quantity CODELCO 28,137 26.8% 8 28,656 37.1% 8 Large mining - Cu 48,722 46.5% 18 35,785 46.3% 17 Medium mining - Cu 3,273 3.1% 6 2,073 2.7% 4 Gold 17,382 16.6% 10 5,531 7.2% 5 Metallurgy Plants 490 0.5% 2 521 0.7% 2 Iron 4,519 4.3% 5 3,176 4.1% 3 Industrial Minerals 2,328 2.2% 4 1,548 2.0% 3 Copper 80,622 76.9% 34 67,035 86.7% 31 Gold 17,382 16.6% 10 5,531 7.2% 5 Other14 6,847 6.5% 9 4,724 6.1% 6
Source: Prepared by Cochilco
It is to be noted that the sector most affected is gold and silver mining, where the investment portfolio was reduced by 68%, due to the removal of five initiatives, among which Cerro Casale and El Morro stand out, the first affected indirectly by the problems which Barrick has had to deal with to carry out Pascua Lama, while the second is due to problems related with communities and investment reducing policies which the company GoldCorp has had on a worldwide level. The comparison between the investment destination and the condition of the projects may be seen in table 26.
Table 25: Comparison of portfolios 2015 and 2014 by type of mining and conditionality of the projects
2014-2023 2015-2024 Mining Type BASE PROBABLE POSSIBLE POTENTIAL BASE PROBABLE POSSIBLE POTENTIAL CODELCO 7,971 0 17,130 3,036 12,817 0 13,148 2,691 Large mining - Cu 11,329 1,613 2,890 32,890 7,451 4,404 8,840 15,090 Medium mining - Cu 152 0 1,221 1,900 152 597 624 700 Gold 0 4,673 1,209 11,500 0 4,450 1,081 0 Metallurgy Plants 490 0 0 0 521 0 0 0 Iron 1,541 0 2,978 0 198 90 2,888 0 Industrial Minerals 1,948 0 380 0 0 665 883 0 Copper 19,942 1,613 21,241 37,826 20,941 5,001 22,612 18,481 Gold 0 4,673 1,209 11,500 0 4,450 1,081 0 Other14 3,489 0 3,358 0 198 755 3,771 0
Source: Prepared by Cochilco
14 Other = Iron and industrial minerals
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On a national level, the northern zone15 is that which has seen the greatest decline in investment, with 31.5% less than registered in the previous registry. Likewise, on a regional level, the regions with the greatest investment declines are the region of Coquimbo (-58.8%), Tarapacá (-54.2%) and Atacama (-44.7%). However the first two decreases in investment are due to the removal of an important project in each region (Ampliación IV Los Pelambres and Collahuasi Fase II, respectively), while the investment decline in the Atacama region is due to the removal of eight initiatives, which shows the difficulties that exist in the region with respects to the materialization of projects (table 27).
Table 26: Comparison of portfolios 2015 and 2014 on a regional level
2014 - 2023 2015 – 2024 Region Investment16 Part. % of Project Investment16 Part. % of Project (MMUS$) total Quantity17 (MMUS$) total Quantity17 Arica y Parinacota 0 0.0% 0 0 0.0% 0 Tarapacá 13,590 13.0% 4 6,222 8.1% 3 Antofagasta 34,607 33.0% 17 34,134 44.2% 15 Atacama 31,005 29.6% 21 17,139 22.2% 13 Coquimbo 11,900 11.3% 5 4,900 6.3% 4 Valparaíso 8,220 7.8% 2 8,141 10.5% 2 Metropolitana 649 0.6% 0 504 0.7% 1 O'Higgins 4,881 4.7% 2 6,249 8.1% 2 North Zone 91,102 86.9% 47 62,395 80.7% 36 Central-South Zone 13,749 13.1% 4 14,894 19.3% 6
Source: Prepared by Cochilco
15 North Zone corresponds to the regions of Arica and Parinacota to Coquimbo, while the Central-South Zone corresponds to the regions of Valparaíso, Metropolitana and O´Higgins.
16 Other Codelco projects are distributed in the following manner for 2014 and 2015, respectively: Antofagasta 45% - 40%, Atacama 5% - 12.5%, Valparaíso 5% - 7.5%, Metropolitana 15% - 10% and O'Higgins 30% - 30%.
17 The "Other development projects " and "Information projects" initiatives are considered as to large projects in the total amount of the portfolio, as their investments are broken down through the whole country.
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7. Conclusions
Chile, like the rest of the world, has been greatly affected by the weakening of the price of commodities, which has made the materialization or advance of mining initiatives difficult in the past few years. Likewise, mining has been affected by a new treatment coming from the communities wherein the projects will be installed. Currently the portfolio of mining projects to be carried out within the next decade consists of 41 initiatives which will allow Chile to maintain its worldwide leadership in copper production and increase significantly the production of gold and silver, of iron, and of some industrial minerals. The relevant elements of this portfolio are not the global value, rather the composition in terms of the number of initiatives, who is pushing them, the objectives, where they are found, and the efforts being made to carry them out. From the analysis of the background information shown in this report the following can be concluded:
Investment origin
For the first time, CODELCO presents an investment portfolio almost equal to that coming from the private copper mines, which, beyond seeking a productive increase of the state, seeks to consolidate the sustainable development in the long term, permitting the continuity of operations for the next 30 years. This portfolio reaches US$ 28,656 million, being 43% of the copper portfolio and 37% of the total portfolio. CODELCO possesses 61% of the investments in base condition of Chilean copper mining. Only some private companies in large copper mining maintain investment plans of a similar magnitude to those of CODELCO, among which stands out Antofagasta Minerals, with the developments in Distrito Centinela in the community of Sierra Gorda, KGHM and the expansion of the new operation of Sierra Gorda, BHP Biliton with the expansion projects of Escondida and the continuity of operations in Cierro Colorado and Spence, the last with a line of sulphured minerals. Following the same example is Teck with Quebrada Blanca Hipógeno and the Relincho project in Atacama, and Freeport McMoRan, which after the sale of their assets in Atacama put all of their efforts in the El Abra Mill project. The investment in other minerals18 has been diminished with respects to the previous year, specifically with respects to the previous year, specifically to gold mining, which has fallen by 68%. The most affected is that which development potential in the Atacama region. The investments come from 8 countries, led by Chile, with a 58.9% of total participation, coming from the state and private mining. In the second place is Canada with a 21% participation, with emblematic companies such as Tech Resources, Lindin Mining, (which was just acquired by Candelaria), Barrick Gold, and other companies focused in investments in the medium copper mines
18 Oro, hierro y minerales industriales
Chilean Mining Investments – Project Portfolio 2015 -2024 55 and of industrial minerals. With participation of less than 10% are countries such as Australia, the United States, Japan, the United Kingdom, Poland, China, and Korea.
Investment purpose
On a global level, the purpose of developing greenfield initiatives reaches a 57.7% of the portfolio total with around 22 projects, being relevant for all of the classifications with exception of the investments carried out by CODELCO, being mainly brownfield. The expansion of the operations as well as that of replacing the current production are especially relevant for CODELCO, to assure its competitive position in the long term, as well as for the conditions of depletion in which some of the most emblematic sites are found. For the expansion projects 9 have been identified which make up 22.9% of the total investment, whereas for the replacement 11 projects are considered, with a 19.4% of the investment total.
Investment Region
Antofagasta remains the principal investment destination, focused principally on copper mining, with 22.3% of the total participation in the investment portfolio. Atacama is the second investment destination, with 22.2% of the total investment participation, and is the only zone with investments in gold mining (32% of the regional investment) as well as a significant investment in copper (62% of the regional investment) as well as other minerals. Valparaíso, Tarapacá, the Metropolitana region, and O’Higgins only have copper investments, while Coquimbo has copper investments and a significant iron Project with copper coproduction.
Investment conditionality
All mining initiatives may be affected by certain variables which affect their planned timeframe, which are mainly the stage of advancement in construction or of their studies, obtaining of permits, be it environmental or legal, financial strength of the operating companies, as well as other factors. Therefore the initiatives with the greatest probability of materializing within the timeframes indicated by the proprietary mining companies, which corresponds to the projects in base and probable condition, correspond to 24 initiatives valued in US$ 31,345 million dollars. In the group of projects which are in the possible and potential categories, which correspond to those mining investments with lesser probability of being implemented within the timeframes defined by the owners are also those most susceptible to being affected by changes in market conditions, wherein we find 18 initiatives valued in US$ 45.945 million. Conversely, the projects in execution reached 27.4% of the total portfolio with 13 initiatives, while those projects in the feasibility stage correspond to 26 initiatives wherein 62.8% of the investment total is concentrated.
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There are 17 initiatives making up 27.1% of the investment total which have the RCA approved as of July 2015, which indicates the existence of 6 initiatives within the next few months which could begin implementation and change their materialization condition. Likewise, 33.1% of the investment corresponds to 11 initiatives which have not received a positive environmental qualification resolution (RCA approved) for the projects presented, and 27.5% of the investment corresponds to projects who have not yet entered their respective EIA into the system.
Upon annualizing the financing coming from the investment portfolio, it is possible to identify three periods: - Investment already received, which corresponds to US$15.380 million, or 19,9% of the current portfolio, - The investment to be concreted during the next five year period, 2015-2024, US$ 44,894 million, equaling 58.1% of the portfolio, with an average yearly investment of US$ 8.979 million, - The remainder to be invested in the 2020-2024 period being those projects whose implementation date is planned for this period, whose investment reaches US$ 16.981 million, making up 22% of the investment portfolio. Among the investments to materialize during the next five year period, the group of projects in base and probable condition make up 40% of the investment, with an average rate of US$ 3,592 million. Furthermore, the group of initiatives in the possible and potential condition make up the remaining 60%, with an average yearly investment of US$ 5,386 million.
Structural change in copper production
Considering a horizon of 2026, Chile has the potential of reaching a copper production capacity of 7.56 million tons of copper, a 31.6% increase over the production registered in 2014, if all of the planned projects are carried out according to their timeframes, the maximum production registered within this period would be reached in 2024, wherein the copper production would reach approximately 7.84 million tons, 36.3% over the 2014 production. This increase in production shows a structural change in the type of final product of the copper operations, whereas as the production capacity in concentrates were to increase by 2.84 million tons by 2026, a 72.7% increase over 2014, the SxEw cathode production would diminish by 1.03 million tons, registering a 55.7% decrease with respects to the same year. This decrease in SxEw cathodes is principally due to the exhaustion of leachable resources and of the closure of operations of some copper sites towards the end of the next decade, such as Collahuasi, Sagasca, Quebrada Blanca, Mantos Blancos, Michilla, Las Cenizas, Franke, Mantoverde and Carmen de Andacollo. Furthermore, it is observed that some of CODELCO´s operations, such as Chuquicamata (Hidrosur), Radomiro Tomic and Salvador, will reduce their production due to the depletion of leachable resources.
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However, the increase of production coming from the concentration lines has repercussions on two aspects of the strategic mining area, which are: - Increase in the exportable supply of concentrates, without increasing the current production of ER cathodes: where during 2014 2.55 million tons of copper concentrate was exported, equaling 65.3% of the concentrate production of the country, by 2026 the maximum copper concentrate production should reach 6.75 million tons, reaching 89% of the national copper participation, wherein it could potentially export 5.2 million tons of concentrate, in other words, 76.9% of the Chilean copper concentrate production.
- Increase in the levels of processing and generating of tailings: if currently 10.849 tpd of fine copper concentrate is produce, as a produce of the processing of 1.60 mtpd of sulphured ore, and generate around 1.56 Mtpd of tailings (2014 amounts), the copper mining project portfolio for 2015-2024 will increase the production of fine copper concentrate to 18.741 tpd, as a product of the processing of around 3.47 Mtpd of tailings by 2026. This means an increase in daily treatment and tailings generation of around 121% to only increase daily copper production by 32%.
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ANNEX 1: Description of investment projects in copper mining
1. Projects by the state owned copper mines
1.1. Structural Projects by CODELCO - www.codelco.cl
SULFUROS RADOMIRO TOMIC PHASE II (División Radomiro Tomic)
The Radomiro Tomic Sulfuros project corresponds to the option of continuing the development of the RT open pit mine, whose oxide production will fall decisively beginning in 2018, through the exploitation of the Sulphur estimated in 2,600 million tons, with an average copper grade of 0.47%. From the mining perspective this project adds new extraction phases which take advantage of the current development of the Radomiro Tomic mine, generating a total material movement of between 600,000 and 650,000 tpd, with a mineral production of 200,000 tpd. With respects to ore processing, the project proposes the construction and operation of a new concentrator plant with a 200,000 tpd capacity, with which it would be one of the largest SAG concentration plants in the country. It is estimated that the project will contribute around 350 thousand tons of fine copper annually, as well as 7 thousand tons of molybdenum concentrates. Among the most relevant aspects is the use of desalinized sea water in the processes, and beginning in 2021, the implementation of thick tailings technology, which will allow for the optimized usage and size of the tank, to recover more water and diminish the emissions of material particles, among other environmental advantages. In 2013, project finished the feasibility studies, considering reaching 200,000 tpd of processing in two stages of 100,000 tpd each: the first in 2018 and the second in 2021. Furthermore, it advanced in the acquiring the land and services which will be required to base the future installations on. In May 2013, it entered into the Environmental Impact Assessment phase of the projects, and by the end of the year was finishing the first addendum, to later obtain the sectoral permit. Currently Codelco has responded to the second addendum of the project and the Environmental Evaluation Service (SEA) is in the process of indigenous consulting within the framework of the Convenio 169 of the OIT. Resources : 3,617 Mt @ 0.46% Cu Treatment Capacity : 200 Ktpd of sulphured ore, in two stages.
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Estimated Investment : MMUS$ 5,376, including the infrastructure for desalinization and impulsion of sea water, but does not include the thick tailings plant, to be built at a later time. Sea water usage : Considers a desalinization plant with inverse osmosis technology of 1,600l/s, with an estimated investment of US$ 1,500 million, included in the total project investment. Labor : 12,100 in the construction stage, and 2,200 in the operation stage. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation POSSIBLE New Feasibility EIA presented 2019
Current Status : In process of RCA approval and of sectoral permits, with time extension requested until September 2015. Beginning of construction estimated for the beginning of 2016, to finish stage 1 of the process by the end of 2018.
NEW LEVEL MINE (División Teniente)
This development will enlarge the El Teniente mine to a deeper area of the site, located in the 1,880 level, being 100m lower than the current Teniente 8, adding to this a exploitable area of 2 million square meters. This new sector contains reserves which reach 2,020 million tons and with an average copper ore grade of 0.86% and 220ppm of molybdenum. The configuration of the project contemplates the exploitation through a panel caving system, with 100% of the area preconditioned with hydraulic fracturing and a level pattern that is typical for El Teniente mine: sinking, production, ventilation, hauling, and crushing. The difference is, in this case, the mineral will be transported to the surface through a system of transportation belts to the Colón concentrator. The project will allow the level of divisional operation to reach sustained operations in the long term at 137 ktpd, extending by more than 50 years the useful lifespan of the mine beginning in 2017. Additionally it leaves the option of reaching a treatment capacity of 180 ktpd within the next decade open. It is estimated that between 2011 and 2017 the project will carry out 98,450 meters of tunnel work (horizontal development) and 3,454 meters of vertical developments: ventilation ducts and transfer shafts.
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It is worth noting that the New Level Mine (Nuevo Nivel Mina) project poses an engineering design oriented to diminishing risks. At the same time, it will greatly reduce the exposure of the workers to dangerous situations , as it considers semi-automatic operations commanded in the control rooms located in the valley, more than 50 kilometers from the work site. Resources : 3,732 Mt @ 0.86% Cu Treatment capacity : 137 Ktpd of sulphured ores, with possibilities to expansion within the next decade to 180 Ktpd of sulphured ores. Estimated investment : MMUS$ 4,920 Seawater usage : Does not apply. Labor : 3,500 workers in construction stage. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation BASE Replacement Execution EIA approved 2021
Current Status : The project has passed on to a closer review, delaying the expected implementation date and increasing the investment required for development. The aforementioned is explained by greater geotechnical complexity in the access and transportation. It is expected that it will gradually start up production in 2021.
CHUQUICAMATA SUBTERRÁNEA (División Chuquicamata)
The Corporation is currently exploring the geological resources deep in the Chuquicamata deposit, whose reserves are estimated at 1.650 million tons with a .71% copper grade. The project considers the exploitation through macro blocks, using the extraction process of “block caving”, in a subterranean mine made up of four production levels; a principal access tunnel 7.5 km long, five clean air injection ramps, two air extraction spires, and many other features. Likewise it foresees an increasing production rate from 2,700 tons of ore per day at the beginning of the operation, up unto meeting the goal of 140,000 tpd nine years later, which would mean a yearly production of 366,000 tons of fine copper and 18,000 tons of fine molybdenum.
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The development would coincide with the end of the useful life of the put and would send the minerals to the current concentrators of Chuquicamata. Resources : 1,728 Mt @ 0.80% Cu Treatment Capacity : Up to 140 Ktpd of sulphured mineral. Estimated investment : MMUS$ 3,816 Seawater usage : Does not apply. Labor : 3,767 in the construction phase and a maximum of 4,837 in the operational phase, once Operations reach their peak. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation BASE Replacement Execution EIA approved 2020
Current status : The first stages have been completed, currently carrying out access tunnel and transportation tasks. A gradual development of the mine is planned, with production to commence in 2020.
NUEVA ANDINA: PHASE II - EXPANSIÓN A 244 KTPD / (División Andina)
This structural project by Codelco consists in the treatment capacity expansion of the Division Andina by 150 ktpd of mineral, passing from the 94 ktpd reached in the PDA phase 1 to 244 ktpd nominal capacity. The prior is translated for the first 30 years of operation, in an additional 343 ktpa of fine copper, which would take the Division Andina to be producing around 600 ktpa of fine copper and would extend the useful lifespan of the Division until 2085. The construction or the Expansión Andina will take 6 years due its complexity and the need to build a mineral transport system through tunnels in the high mountains. The expansion considers new unitary operations of primary crushing, mineral transportation, secondary and third crushing, collective, selective and molybdenum recovery flotation plants, as well as a filtering plant with concentrate storage, for later transportation and storage in the Quintero Bay. Among the necessary equipment, this project will include the use of HGPR technology (High Pressure Grinding Roll), in the third crushing stage, with which it is hoped to lower operation costs, by around 20%, a savings which is strongly sustained by a lower specific consumption of energy, around 25%. For these operations, the project includes work in the Valparaíso region, expansion of the pit mine and mining infrastructure, of the mineral transportation system, new concentration plant and copper concentrate storage in the Bay of Quintero, as well as in the Metropolitan region the expansion of the Ovejería tailings tank (currently in operations), a new canal for the transportation of tailings, a water recirculation system from the tank, electrical transmission lines of 22kV and 33kV, a concentration duct and a filtering plant in the Montenegro area.
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Resources : 5,771 Mt @ 0.75% Cu Treatment Capacity : 150 ktpd of sulphured mineral above the current 94 ktpd. Estimated investment : MMUS$ 6,524 Seawater usage : Not considered. Labor : Between 12,800 and 18,000 workers in the construction stage, and approximately 2,043 average in the operational stage. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation POSSIBLE Expansion Feasibility EIA presented 2024
Current status : The feasibility Assessment finalized in 2013 modified the project timeline, defining the implementation for not before 2023. Production is estimated to begin in 2024.
NUEVO TRASPASO RAJO - PLANTA / (División Andina)
The New Primary Crushing System consists in the construction of a new crushing line, which will allow the current production capacity of División Andina to be maintained, with around 92 thousand tons of mineral per day, generating around 240 thousand tons of fine copper per year, as well as 3.9 tons of molybdenum production. In accordance with the mining plans and the advance, the current feeding lines for the Don Luis crusher will be affected by the pit growth. Therefore the División Andina will require the replacement of the infrastructure which guarantees the mineral processing capacity, fitting a new space wherein a new crushing line will be installed which allows the transfer of mineral from the mine to the plant. The work contemplates the construction of a platform in the 3.500 Nodo, an avalanche protection system, the construction of a new primary crusher, the construction of the Haulage III belt tunnel, the SAG hopper distribution and feeding system, and a new secondary crushing plant. This will allow the useful life of the pit to be extended until 2033 and allow the development of the Nueva Andina Fase II. Another of the most appealing innovations of this projects consists in the installation of an avalanche control system which will allow to guard all of the installations contemplated in the area, and of course, the personnel who work there. Resources : Does not apply. Treatment Capacity : Does not apply. Estimated investment : MMUS$ 1,323 Seawater usage : Does not apply.
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Labor : This project does not modify the numbers of the División Andina. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation BASE Replacement Execution N/A 2022
Current status : The project is in the investment execution stage, as initiated in mid- 2013. The construction of all of the parts of the project will take 8 years due to the climatic conditions which impede surface work during the winter months, being completely operational not before 2022.
RAJO INCA/ (División Salvador) The Rajo Inca consists in an operational continuity project of the current installations of the El Salvador Division of CODELCO, through the open pit exploitation of the Indio Muerto deposit. This project, as well as extending the useful life of Salvador for more than 30 years from the closure of the subterranean mine, contemplates the expansion of the current treatment capacity of the Division from 2022, reaching a total of 132 ktpd in 2023. The current mining plan of the Salvador Division contemplates the usage of the sulphured resources form the Inca area through subterranean mining which will be interrupted in 2018 because of the pre-stripping work having begun for the Rajo Inca project. Furthermore the area called Campamento Antiguo will exhaust its reserves in 2017. The pre-feasibility API of the Rajo Inca project has been turned in for review. This prefeasibility Assessment contemplates flexibility in the design and extraction sequence of the Rajo Inca project, being subject to controlling with a greater level of certainty in the tonnage and ore grade feeding the plant due to the high percentage of broken mineral contemplated in the operation and to reevaluate the development strategy of the mining business, analyzing the possibility of a smaller entrance to the Rajo Inca to thereby speed up the implementation date. It is to be noted that the Corporation contemplates analyzing the feasibilty of processing marginal resources (run of mine process) with the purpose of using the Sx-Ew assets of Salvador during the transition period of the Rajo Inca, a project which could supply, beginning in 2017, leachable resources of a low ore grade. Resources : 1,291 Mt @ 0.45% Cu. Treatment Capacity : 132 Ktpd. Estimated investment : MMUS$ 2,691 Seawater usage : Does not apply. Labor : Not available
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Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation POTENTIAL New Pre-Feasibility Without EIA 2020
Current status : Project in pre-feasibility stage. Implementation projected not before 2020.
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2. Large private copper mining projects
2.1. Projects of Anglo American - www.angloamerican.com
LOS BRONCSE FASE 7 (Anglo American Sur S.A.)
The Los Bronces operation considers prioritizing the use of the mineral in those sectors with the best geological information and lowest ore burden, to be able to maintain the current production levels. In this sense, the project incorporates a modification of the mining usage denominated Fase 7 of mining development. The extension of Fase 7 contemplates an estimated 44 hectare surface, which currently is used and occupied for service infrastructure of the mining operations. From the productive point of view, it is projected to extract a total of approximately 78 million tons of material, of which 42 million tons correspond to tailings and 36 tons of mineral. As a result of the prior information, it is necessary to reposition the infrastructure which will be affected by the mining development, which will bring with it the construction, fitting and relocation of buildings and other operational service infrastructure. Given the fact that the project has the objective of sustaining the current production levels, without incorporating modifications in the mineral treatment capacity of the plants, an increase in water consumption and inputs is nor projected which would pass the authorized levels of the “Desarollo Los Bronces” project. In this same sense, to carry out the project will not require new mineral processing plant infrastructure, modification of the pulp transportation system, nor of the tailings tanks. Resources : XXXXXXXX Treatment Capacity : 160 ktpd average, with a maximum of 180 ktpd. Estimated investment : MMUS$ 112 Labor : 120 in the construction phase. Seawater usage : Not considered. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation PROBABLE Expansion Feasibility EIA presented 2017
Current status: Project entered to the SEA through a DIA in November of 2014, waiting for environmental approval.
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2.2. Antofagasta Minerals Projects - www.antofagasta.co.uk
ANTUCOYA (Minera Antucoya Ltda.)
A deposit located at 125 km to the northeast of Antofagasta and at 45 km in a straight line from the coast, which contains proved and probable reserves of 635.8 million tons with 0.35% copper (with a cut-off grade of 0.21% Cu). The project will produce an average of 85,000 tons of copper cathodes during the first 10 years of operation, to later reach an average of 80,000 tons of cathodes per year until completing the 20 years of useful life that is estimated for the project. Antucoya will be developed as a conventional open cast mine and the mineral will be processed through dynamic leaching pits and a SXEW plant, using untreated seawater in the operations. Although it is a greenfield type project of low grade, there are a series of compensable factors; the deposit is relatively shallow and therefore the process of pre-stripping to eliminate the 35 million tons of waste is only expected to take nine months; the sterile/mineral relationship is also low, approximately 1:1; the deposit is located within a well-developed mining zone, which permits easy access to pre-existing infrastructure, including energy, water, and human resources. Toward the end of December of 2012, the development of Antucoya was suspended to allow for a review of the project due to an increase in the current and potential costs. After the positive adaptations, the construction of the project was reactivated in the second trimester of 2013, eliminating the acids plant considered in the initial project, and increasing the average production for the first 10 years. Resources : 1,208.5 Mt @ 0.30% Cu (measured, indicated, and inferred) Treatment Capacity : High grade mineral, up to 96 ktpd; ROM (Run of Mine) mineral, up to 38 ktpd. Estimated investment : MMUS$ 1,900 Labor : Between 5,000 and 7,000 in the construction phase, and 1,400 in the operation stage. Seawater usage : Provided through an impulsion system from Esperanza. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation BASE New Execution EIA approved 2015
Current status: Project with construction finalized. A production amount of 37,000 TMF of cathodes is expected in 2015.
ESPERANZA UPDATE (Minera Centinela, ex Minera Esperanza)
The Esperanza mine, located 30 km from the area of Sierra Gorda, Antofagasta region, has begun an optimization process through two environmental impact declarations (DIA) presented in 2013.
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The first optimization, called “Tercera Actualización Proyecto Esperanza”, with the DIA approved in May 2012, seeks to increase the availability of critical inputs (water, inhibitors and process reactive, etc.), incorporating new oxidized minerals resources in areas to later be used as dumps, and the construction of a new molybdenum processing plant. In this first optimization, the “Planta de Molibdeno” project represents the task with the greatest reach. The location of the plant is in a sector close to the collective flotation, in the Esperanza sector next to the existing concentrator plant. The process corresponds to a standard selective flotation circuit with a treatment rate of 5.5 Ktpd, with the following stages: primary flotation, cleaning flotation, filtering, drying and storage of the Molybdenum concentrate produced. The end, or “tailing” of the process corresponds to the copper-ore concentrate which will continue its processing in the current concentration plant. The second optimization, denominated “Cuarta Actualización del Proyecto Esperanza -Optimización del Proceso”, with a DIA presented in June of 2013, concentrates on the improvement of the current crushing and floating systems, with the incorporation of a secondary and tertiary crushing plant as a complement of the current processing capacity, as well as another concentrate thickener and another of tailings. Once these improvements are concreted, Esperanza will have increased the treatment capacity of the concentration plant of 12 ktpd, reaching 105 Ktpd to be treated. This increase is translated into approximately 19 Ktpa of Cu concentrate added to the current production of the operation. Furthermore, the molybdenum plant will allow the company to produce around 2 ktpa of Mo during the useful life of the current operation, substantially increasing the value chain. Of these two initiatives, “Optimización del Proceso” is the most advanced, estimating that the increase in the output of the plant to 105 Ktpd will be complete by the end of 2015. During 2013 the project´s activities were focused on the installation of the two additional tailings thickeners. With respects to the construction of the molybdenum plant, Esperanza will continue evaluating the project, which is currently in the feasibility Assessment phase. However, if it is approved, production could begin in 2016. It is to be noted that due to the restructuring of the Distrito Centinela projects, Esperanza Sur was added to the mining plan of Esperanza, increasing the operational reserves from 731.6 Mt with ore grades of 0.50% in copper, 0.011% of molybdenum, and 0.19 gpt of gold to 1,789.2 Mt with ore grades of 0.45% in copper, 0.013% of molybdenum, and 0.16 gpt of gold. This would increase the useful lifespan of the current operations in Esperanza by an additional 30 years. Resources : 3,244.7 Mt @ 0.38% Cu; 0.005% Mo; 0.12 gpt Au (measured, indicated and inferred) Treatment Capacity : 12 ktpd of additional sulphured mineral over current capacity, plus 5.5 ktpd of treatment in the molybdenum plant. Estimated investment : MM US$ 630 (“Tercera Actualización Proyecto Esperanza” MMUS$ 200; “Cuarta Actualización del Proyecto Esperanza -Optimización del Proceso” MMUS$ 430). Seawater usage : Will be maintained from the current plant. Labor : 875 workers in the construction phase and 49 in the operational phase.
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Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation BASE Expansion Execution EIA approved 2015
Current status : Projects with feasibility studies in already in processing and in construction, respectively. The project called “Tercera Actualización Proyecto Esperanza” has the DIA approved as of May 2012, but is still being evaluated, with the implementation budgeted for 2016, on the other hand the “Cuarta Actualización del Proyecto Esperanza -Optimización del Proceso”, which has the DIA approved since November 2013 is estimated to be working by the end of 2015.
MODIFICACIONES EL TESORO (Minera Centinela, ex Minera Tesoro)
The El Tesoro mine, located 25 km to the east of the area of Sierra Gorda, Antofagasta region, and with an altitude of approximately 2,300 meters above sea level, in January of 2014 presented the DIA “Continuidad operacional: Aumento de capacidad de procesamiento y modificación Planta SX”. This project has the principal objective of maintaining the production of fine copper cathodes from El Tesoro, equivalent to 110 ktpa. This will be possible, by providing the maximum benefit of their own resources, and also by processing the copper-rich solutions provided by third parties. The project is centered on four points in particular: i. Increasing the processing capacity: Consists of crushing, agglomeration, and leaching of 2,500,000 tons of minerals, preferably stick, but eventually directly from one of more of the pits being mined in the site, in a new comminution, agglomeration, and leaching plant. This increased processing capacity will allow for the partial compensation for the decrease in the ore grade of the minerals being processed. ii. Gravel leaching: generated from minerals previously leached in a dynamic pit, but which for their remaining copper content are profitable to reprocess (re-leaching) within the same pit as the existing gravel. It will be benefitted by 3,000,000 tons yearly during the rest of the useful lifespan of El Tesoro. iii. Modification of the SX Plant and processing of solutions from third parties: in this case, the SX plant will require modification, with the objective of allowing it to process solutions, in the short term, from the Encuentro Óxidos project, and in the long term, from other oxide deposits which may exist in the area. iv. Carrying out drilling surveys: through diamond drilling and reverse airflow, in an area that was previously explored within the mining properties of the current operation, specifically the area known as Llano- Paleocanal, located directly south and southeast of the Tesoro Noreste pit. In the end of July of 2014, the project was approved by the SEA, with which the carrying out of the project should have started in the end of August 2014. Resources : 346 Mt @ 0.45% Cu Treatment Capacity : 7 ktpd of oxide minerals added to the current capacity. Estimated investment : MMUS$ 86
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Seawater usage : The supply will be maintained from Esperanza Labor : 460 workers in the construction stage and 270 in the operation stage. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation BASE Replacement Execution EIA approved 2016
Current status : Projects with feasibility studies in progress and DIA approved in July of 2014. Beginning construction at the end of August of 2014, it is projected that the implementation will be in the middle of 2016.
ENCUENTRO, (Antofagasta Minerals S.A.)
The Encuentro deposit is located about 10 km to the SE of Esperanza and the immediate strategy is to develop the oxide layer in the beginning, which would be the pre-stripping for the sulphured stage, to be developed in the second stage. The development of these usage lines is linked to the Minera Cetinela operations.
i. Encuentro Óxidos:
The Encuentro Óxidos deposit is expected to produce around 50,000 tons of copper cathodes per year, using the existing capacity of El Tesoro. This initiative will permit the current Sx-Ew plant to keep producing to its full capacity, (100,00 tons per year), beginning in 2016, for around 8 years, helping to compensate the diminishing of the productive production of the decline in ore grades of the current deposit from where the mineral is being extracted. This project contemplates new crushing and heap leaching installations, with a tube which will direct the leaching solution or PLS (Pregnant Leach Solution) to the EL Tesoro plant about 15 km away, for processing. The mineral with the highest ore grades will be crushed and sent to the new heap leaching installations, while the minerals with the lesser grades will be processed in a ROM leaching heap. The feasibility Assessment should be finished during the first semester of 2014, to later begin with the pre- stripping in the end of 2014, for a period of two years, followed by primary production in 2016. Currently the Group is analyzing ways to reduce the investment costs, including considering the importation of equipment of China, and the use of a project team lead by Antofagasta Minerals instead of the EPCM contractor. Resources : 178.8 Mt @ 0.44% Cu (measured, indicated and inferred)
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Treatment Capacity : Between high grade mineral and ROM, around 65 Ktpd. Estimated investment : MMUS$ 636 Seawater usage : Coming from Esperanza through impulsion system. Labor : 2,000 workers in the construction stage and 500 in the operation stage. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation BASE Replacement Execution EIA approved 2016
Current status : Project construction begun in the end of 2014 with implementation estimated for 2016.
ii. Encuentro Sulfuros (Desarrollo Distrito Centinela):
Minera Centinela registered in the Environmental Evaluation System (SEA) of the Antofagasta Region the Environmental Impact Assessment (EIA) in May of 2015. It is expected that in the first stage, which will be implemented in 2019, the project will allow 140 thousand tons of fine copper to be added. With the second stage, in 2024, another 60 thousand tons will be added. Therefore, in the next decade, Minera Centinela will reach a yearly production greater than 400 thousand tons. The initiative contemplates carrying the project out in two stages. The first corresponds to the development of the Esperanza Sur deposit, which has estimated plan to enter in operations by 2019, and would mean the investment of US$ 2,700 million. Furthermore the second stage consists in the development of the Encuentro Súlfuros deposit, whose operational date is projected for 2024, wherein an investment of an additional US$ 1,650 million will be made. Resources : 1,193.5 Mt @ 0.40% Cu; 0.014% Mo; 0.16 gpt Au (measured, indicated and inferred) Treatment Capacity : 95 Ktpd of sulphured mineral. Estimated investment : MMUS$ 4,350 Seawater usage : Coming from Esperanza through an impulsion system. Labor : No information available. Condition of materialization :
Condition Project type Stage of advance SEA permit Implementation POSSIBLE New Feasibility EIA Presented 2019
Current status : Project entered into the environmental evaluation system in May 2015.
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LOS PELAMBRES (Minera Los Pelambres S.A.)
The Los Pelambres deposit is located almost 170 km to the east of Los Vilos, and at 3,100 meters above sea level. It has basic resources which surpass by more than four times the mineral reserves in the current operation. Therefore the Company has continued to examine options for the long-term development of the mine, designing distinct alternatives for growth. Therefore, during 2013, the Group has completed the pre-feasibility studies which examines the options for the progressive and improved long term expansions through the current operation of Los Pelambres.
AMPLIACIÓN MARGINAL LOS PELAMBRES
This expansion does not require new infrastructure and only seeks to increase by 15% the current treatment capacity of the concentrating plant through optimizing the productive process. During November a feasibility Assessment was begun over the marginal expansion, with a possible first production beginning in 2018. Currently it is expected that the yield could increase to close to 205 ktpd. Likewise, it would modify the current processing plant to be able to treat harder minerals, which is expected for the following stages in the mining plan. These combined factors will support a net increase in the average production from approximately 40 ktpa to 45 ktpa of fine copper. Resources : 5,714 Mt @ 0.52% Cu; 0.016% Mo; 0.05 gpt Au Treatment Capacity : Additional 30 ktpd of sulphured ores. Estimated investment : MMUS$ 1,190 Seawater usage : Not considered in the project. Labor : No information available. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POSSIBLE Replacement Feasibility Without EIA 2018
Current status : Project with feasibility Assessment being processed, and it is hoped that the EIA of the project may be sent during the second semester of 2015. The company estimates that the implementation would be during 2018.
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2.3. BHP Billiton Projects - www.bhpbilliton.com
SPENCE GROWTH PROJECT or MINERALES PRIMARIOS SPENCE (Minera Spence S.A.)
For the benefit of the primary sulphured minerals, the site considers the implementation of a concentration plant with a nominal treatment capacity of between 95,000 and 100,000 tons of mineral. Also, the processing of the mineral reserves will allow the useful lifespan of the site to be extended by around 20 years, producing around 835,000 tons of copper concentrate and 7,500 tons of molybdenum concentrate yearly.
It is to be noted that the current operations of Minera Spence (consists in the usage of supergene material, leaching of sulphide and oxides, solvent extraction and electro-winning to produce high purity copper cathodes) will continue being carried out at the same time until 2024.
The project also considers the use of desalinized salt water of industrial quality as a supply, for which the construction and operation of a desalinization plant with a production capacity of up to 1,600 l/s, which will be located approximately 12 km to the Northeast of the town of Mejillones. This plant would be built in two stages, with the materialization of the work to produce and operate the 800 l/s required for the mining project, and the second stage of 800 l/s to supply other BHP Billiton projects.
Resources : No information Treatment Capacity : New concentration plant with capacity between 95,000 and 100,000 tpd. Estimated investment : MMUS$ 3,300 (includes US$ 800 million for desalinization plant) Seawater usage :Use of desalinized sea water with an 800 l/s capacity plant, with possibility to expand to 1,600 l/s. Labor : For the site between 1,550 and 4,100 workers are considered for construction, and 220 for operation. For the desalinization plant around 1,380 in construction and between 26 and 45 for operation. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POSSIBLE New Feasibility EIA presented 2019
Current status : Project in feasibility stage, with approval process from the EIA presented in July of 2015. If the EIA is approved, the operation could continue development beginning in 2019.
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ESCONDIDA ORGANIC GROWTH PROJECT I (Minera Escondida Ltda.)
BHP reformulated the original Escondida Fase V project in 2011, for a new model of organic growth, which is initiated with the addition of a mill in the Laguna Seca plant, increasing the treatment capacity of this plant by 15 Ktpd, and later the construction of a new concentrating plant with 152 Ktpd of mineral treatment which would replace the current Los Colorados plant, which will be dismantled to leave the area in conditions to remove the rich minerals which are lying in the location of the plant. Furthermore, the company has plans for the medium/long term to carry out a new phase called OGP II, which includes adding a third plant to the productive cycle, as well as the infrastructure related to the electrical hanging of the operation. This last initiative is currently only in the profile engineering level. Resources : 13,890 Mt @ 0.57% Cu (measured, indicated, and inferred) Treatment Capacity : Net increase of 47 ktpd of sulphured minerals: a) an additional 15 ktpd of Sulphur minerals in the Laguna Seca plant, to reach 135 ktpd. B) Removal of the current Los Colorados plant at 120 ktpd. And c) adding a new concentrating plant for 152 ktpd. Estimated investment : MMUS$ 4,199 Seawater usage : Use of desalinized sea water coming from the current Coloso Plant. However the company will be carrying out the studies necessary for a new desalinization plant, which will boost the current one. Labor : Between 5,900 and 8,570 workers in the construction phase, and 739 in the operational phase. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation BASE Expansion Execution EIA approved 2015
Current status : Project finalized in June of 2015, currently in the commissioning stage, with definitive implementation during the third trimester of 2015.
CERRO COLORADO – CONTINUIDAD OPERACIONAL (Pampa Norte S.A.)
Cerro Colorado, is a copper strip mining operation which produces SXEW cathodes and is located 120 km to the east of Iquique, between the communities of Pozo Almonte and Pica in the region of Tarapacá. It has been
Chilean Mining Investments – Project Portfolio 2015 -2024 74 operation since 1994, and Cerro Colorado has a useful lifespan estimated until 2016, for the reserves considered in the original project as well as for the water extraction permits which it has obtained for its processes. In July of 2013 Pampa Norte S.A., affiliate of BHP Billiton in Chile, presented the project named “Continuidad Operacional” which considers continuing the current operation, tapping the mineral reserves which have been identified and economically evaluated within the framework of distinct prospection campaigns designed to prolong the useful lifespan of the operation. The usage of these reserves would permit the company to extend the current operation until 2023, without modification of the process, and maintaining the currently authorized production level, at a pace of material movement (tailings and mineral) of around 217 ktpd, as a daily average, with a maximum of around 261 ktpd during 2016. It is to be noted that the project considers maintaining the same water extraction rate – 150 l/s—from the field of wells located in Pampa Lagunillas. During July of 2015 the company delivered to the environmental authorities a third Addendum, in which it replied to a new round of concerns from the public service sector with competence for the evaluation. It is hoped that after the presentation of the document, the project may be voted upon, and eventually approved.
Resources : 267 Mt @ 0.60% CuT; 0.42% CuS Treatment Capacity : Not available Estimated investment : MMUS$ 467 Seawater usage : No used Labor : Between 40 and 50 workers in the construction phase, and 3,200 workers on average during the operation phase. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE Replacement Feasibility EIA presented 2017
Current status : Project in feasibility, with EIA approval process presented in July of 2013. If this EIA is approved, the operation could continue development beginning in 2017.
2.4. Proyecto de Capstone Mining - www.capstonemining.com
SANTO DOMINGO (Minera Santo Domingo)
Santo Domingo is the main deposit of four IOCG type deposits which Capstone Mining is assessing in the Diego de Almagro district, a company which it received in the acquisition of Far West Mining in June 2011. A prefeasibility Assessment was done in August 2011 wherein the investment and project operation parameters were re- estimated.
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With the available information it is postulated that usage of the sulphur resources be used to recover over 100 ktpa fine Cu and 470 kg in gold from the copper concentrates, as well as the coproduction of some 4Mtpa of iron resources (magnetite and hematite) in Fe concentrates through the magnetic concentration of the tailings from floatation. The copper concentrate will be filtered and later transported from the Mine-Plant Area in trucks to the Port area for storage and then shipping. On the other hand, the magnetite concentrate will be transported by a concentration duct to the Port Area, where it will be washed, filtered, and stored until shipping. Once the decision has been made to build the project, implementation should take place approximately 3 years later. The total budget of Santo Domingo for 2014 is US$ 29.8 million to continue the engineering tasks and for obtaining permits. Resources : 581 Mt @ 0.32% Cu; 0.042 gpt Au (indicated and inferred) Treatment Capacity : 70 ktpd of sulphur mineral during the first 5 years, the will remain stable at 63.5 ktpd of sulphur ores. Estimated investment : MMUS$ 1,700 Seawater usage : Considers a plant which will produce 12.5 l/s of desalinized water (2.5 l/s for concentrate washing and worker consumption, and 10 l/s for storage for the usage of the community of Diego de Almagro). Also, it considers a water impulsion pipeline for seawater of 112 km with a nominal flowrate of 389 l/s. Labor : Between 1,550 and 4,060 workers in the construction phase, and 1,055 for the operation. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE New Feasibility EIA approved 2018
Current status : Approval of RCA in July of 2015. It is hoped that the work may commence in the end of 2015 and the implementation to begin in 2018.
2.5. Lunding Mining Projects - www.lundinmining.com
CANDELARIA 2030 (Cía. Contractual Minera Candelaria)
The Candelariamine is located 20 km to the southeast of the city of Copiapó, and 5 km to the south of Tierra Amarilla, in the Atacama region. It began operating in 1995, and has a useful lifespan estimated until 2017, based on the initial reserves considered in the original project. The Candelaria 2030 project, entered into the SEA in September of 2013, considers the extension of the useful lifespan of the current operation until 2030. This project requires diverse activities, among which is the expansion of existing projects and the incorporation of some larger projects:
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a) Increase the useful life until 2030 of the open pit and subterranean mines; deposits of the North and Nantoco areas; processing plant, Port-Warehouse and Warehouse –Candelaria aqueduct, water supply; electrical energy supply and distribution, and desalinization plant. b) The extension of the useful lifespan from 2017 to 2019 of the current tailings deposit called Candelaria, and from 2023 to 2030 to the port installations in Puerto Punta Padrones. Also a new tailings deposit called Los Diques will be made, with an approximate capacity of 600 Mt. c) Increase in the storage capacity of the North and Nantoco dumps, by approximately 610 and 140 Mt additionally, respectively. Resources : 2,034 Mt @ 0.43% Cu Treatment Capacity : Between 9.8 ktpd and 24.2 ktpd additional of sulphur ores (65.8 ktpd currently) Estimated investment : MMUS$ 460 Seawater usage : New aqueduct of 500 l/s, parallel to the one in existence and with the same characteristics, which will provide desalinized water for the operation. Labor : 970 on average and 1,700 maximum during the construction phase, and 2,600 average in the operational phase (1,200 of our own workers and 1,400 contractors). Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE Replacement Feasibility EIA approved 2018
Current status : In feasibility, with the EIA presented in September of 2014, and waiting for approval. In July of 2015 the SEA approved the EIA of the project, for which it is now waiting for the new owner to define the construction date of the same.
EL ABRA MILL PROJECT (Cía. Contractual Minera El Abra)
This project responds to the necessity of the company to maintain the operational continuity of the deposit to treat the new reserves of primary sulphide which emerge as the leachable resources are exhausted. Even though it was conceived during the past decade, it was deferred to permit that the hydrometallurgical process be prolonged through the Sulfolix project, which is currently in operation. In July of 2010 the prefeasibility stage began for the construction of a new concentrating plant. This new plant aims to process between 150 and 200 ktpd, which would allow for a production of close to 300,000 tons of fine copper concentrates, doubling the current production of copper in cathodes. The last updates of the company indicate that, thanks to the results of an exploratory campaign carried out in 2012, the El Abra Mill Project will have the potential to produce more than 450,000 tons of copper in concentrates.
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The company continues advancing in the feasibility Assessment of the project, with the purpose of evaluating in the best way the potential of a crushing operation on a large scale and achieve greater recovery. Also it has not discarded the existence of synergies with neighboring projects, especially with respects to obtaining water for the project. Resources : 2,034 Mt @ 0.43% Cu Treatment Capacity : Between 150 ktpd and 200 ktpd of sulphide minerals. Estimated investment : MMUS$ 5,000 Seawater usage : A desalinization and water impulsion project is considered, very much like the RT Sulfuros Fase II project. Labor : Not available. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POTENTIAL New Feasibility With EIA 2021(e) (e) = estimated Current status : The company indicates that the advances of this project will depend on the technical studies, economic factors, and conditions of the world market. Due to the slow advance of the studies phase of this project, Cochilco estimates a delay in the implementation date defined in the previous report, wherein the project should be entering into operations not before 2021.
2.6. KGHM International Projects - www.sgscm.cl
SIERRA GORDA FASE 2 (Sierra Gorda SCM)
The mining deposit is close to the Spence and Tesoro Projects, (140 km East of Antofagasta) and is being developed as a joint venture between KGHM International (55%) and Sumitomo (45%). Currently the operation processes 110 ktpd of minerals with copper, gold, and molybdenum content, which gives it perspectives to produce a yearly average of 150 ktpa of fine copper in concentrates, 62 koz of gold, and 11 ktpa of molybdenum during the next 20 years. The expansion project announced in August 2015 plans to increase this production capacity, with 35 kTMF of electro-winning cathodes from 2017 coming from the pre-stripping of sulphides from the area and an increase of up to an additional 110 ktpd of concentrate processing beginning in 2019. This expansion would allow the KGHM group to reach over 300 thousand tons of copper production until the beginning of the next decade. Resources : 1,642.9Mt @ 0.32% Cu; 0.011% Mo; 0.035 gpt Au (measured, indicated and inferred) Treatment Capacity : 110 ktpd of additional sulphur mineral over the current 110 ktpd. Estimated investment : MMUS$ 1,500
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Seawater usage : The current operation includes a seawater impulsion system with an intake from the effluent of the cooling system from the Mejillones thermoelectric center. The range of seawater is 1,315 l/s and of desalinized water of 63 l/s, and the impulsion tube is 142 km. Labor : No information. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation 2017(oxides) and PROBABLE Expansion Feasibility EIA presented 2019 (sulphides) Current status : Project entered into the environmental impact evaluation system in August of 2015, with a possible implementation date of the beginning of 2017 for the oxides line and beginning of 2019 for the expansion of the sulphide line.
2.7. Teck Projects - www.teck.com
ACTUALIZACIÓN QUEBRADA BLANCA
The mining site of Quebrada Blanca in an operation which takes advantage of and benefits from a copper deposit located in the Tarapacá region, on the western edge of the Chilean highlands, at approximately 4,300 meters above sea level. The mineral is extracted from an open pit and processed in piles and leaching pits and conventional solvent extraction plants and through electro-winning. The product is cathodes of copper of high purity which are transported in trucks to the Iquique ports and to other national destinations.
The copper mineral extracted from the mine is divided into two types, high ore grade and low ore grade minerals. The high grade mineral is subjected to successive crushing stages to reduce the size and then is transported to a belt system to the agglomeration stage to be later deposited into leaching piles.
Currently, the site presents tasks, activities or parts which show some degree of deviation from the information presented to the environmental regulatory controllers, which has been defined as an Update Modification. This modifications refer principally to: the expansion of the put and of the sterile pit in the south, the enlargement and modification of the site of the leaching dumps and of gravel, the incorporation of a hipogene collection, the update of the original camp and of the treatment of waste water, the updating of the hydrological recharging and the incorporation of a water management area. These modifications have not changed the totality of the mining process described previously and have been maintained within the upper basin of Quebrada Blanca, a historical zone associated with this mining development, without affecting during normal operations the new zones in neighboring basins.
Resources : No information Treatment Capacity : Will not be modified Estimated investment : MMUS$ 165
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Seawater usage : Not considered Labor : Between 223 and 256 during construction, 564 for operation and between 728 and 1,300 for closing. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE Replacement Feasibility EIA presented 2016
Current status : Project entered into the SEA in July of 2014 with ICSARA delivered in May of 2015.
QUEBRADA BLANCA FASE 2 (Minera Quebrada Blanca)
A hypogene deposit of primary sulphides which is found underneath a supergene deposit of secondary sulphides which is currently being developed through leaching, obtaining around 80 ktpa of SXEW cathodes. The development of this deposit will be carried out coinciding with the depletion of the economic leachable reserves and will allow the useful lifespan to be extended by another 39 years. A concentrating plant is considered of 135 ktpd, which will be supplied with desalinized seawater. This capacity will allow for the recovery of 200 ktpa of fine Cu in concentrates and 5.2 ktpa of fine Mo in molybdenum concentrates. In October of 2012 the company withdrew the EIA entered into the SEA with the purpose of perfecting it and to re-present it not before the second trimester of 2013, a situation which was modified at the beginning of 2015, wherein the company indicated that the timeframe for the re-presentation of the Environmental Impact and Social Assessment of the Hypogene project would depend in a way on the progress of the updating process for the existing Quebrada Blanca operation and the improvement activities of the project coming from the EIA of the “Actualización proyecto minero Quebrada Blanca” project (see prior entry). Also, the company is currently carrying out improvements to the feasibility Assessment with the purpose of substantially reducing the capital expenses of the project. Resources : 2,561.9 Mt @ 0.41 % Cu; 0.014% Mo (measured, indicated and inferred) Treatment Capacity : 135 ktpd of sulphur mineral. Estimated investment : MMUS$ 5,590 Seawater usage : Considers a desalinization plant with a water intake from the Punta Patache Port. The impulsion system is made of a 170 km pipeline with an estimated flow rate of 1,300 l/s.
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Labor : 7,000 on average y 9,200 as a maximum in the construction phase and 1,787 on average and 2,053 as a maximum in the operational stage. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POTENTIAL New Feasibility Without EIA 2020
Current status : Project with the feasibility Assessment in optimization of the capital costs. The Environmental Impact Assessment is in the process of being updated, due to the company being in the process of obtaining permits for the existing installations. The immediate expectations of the Company indicated that the EIA of the Hypogene project will not be presented again before the end of 2015. Based on this, the construction could being in mid-2017 with implementation for 2020.
RELINCHO (Minera Relincho)
A copper and molybdenum deposit located 50 km to the north of Vallenar, acquired by Tech with the purpose of carrying out this old project, for which the exploration tasks have been taken up again. According to the project feasibility Assessment, it would be a copper operation with a concentrator with a 173 ktpd capacity, to produce up to 228 ktpa of copper in concentrates and around 5.3 ktpa of fine Mo, for 21 years of operations. As with the Quebrada Blanca Hipógeno project, it would operate completely using desalinized seawater. The feasibility Assessment was completed in the fourth trimester of 2013, coming to the conclusion that the development of a 173 ktpd concentrator and the associated installations would cost approximately MMUS$ 4,500, for an estimated useful lifespan of 21 years, based on the existing mineral reserves. The project would produce 228 ktpa of copper concentrates and 5,300 tons of molybdenum during the first 6 years of operations, to then produce an average of 207 ktpa of copper concentrate and 5,100 tons of molybdenum for the rest of the useful lifespan of the project. Given the current economic conditions, the Company does not foresee significant activities for the Relincho project during 2014, having the main objective of working on the optimization studies of feasibility which will be centered on capital and operational cost reductions, exploring other forms of improving the value of the project. Resources : 1,007.8 Mt @ 0.36 % Cu; 0.012% Mo (measured, indicated and inferred) Treatment Capacity : 173 ktpd of sulphur mineral. Estimated investment : MMUS$ 4,500 (according to last feasibility Assessment) Seawater usage : Considers a desalinization plant of 700 l/s to supply the project. Labor : No information available Condition of materialization :
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Condition Project Type Stage of advance SEA permit Implementation POTENTIAL New Feasibility Without EIA 2022(e) (e) = estimate Current status : Project with the feasibility Assessment finished in 2014. During 2015 the project optimization studies will be continued. This scenario will delay the normal development of the project, for which Cochilco delays the implementation projection by a year with respects to the projection from the 2014 report, now being estimated for 2022.
3. Projects of medium copper mining
3.1. Amerigo Resources Project - www.amerigoresources.com
VALLE CENTRAL EXPANSIÓN (Minera Valle Central S.A.)
Minera Valle Central is located 8 kilometers east of the city of Rancagua and 90 km south of Santiago, 700 meters above sea level. Tis operation currently treats approximately 45 Ktpd of the tailings extracted from the Colihues reservoir and 135 Ktpd of fresh tailings which are sent daily from the Division El Teniente. In January of 2013, Minera Valle Central presented an Environmental Impact Assessment (EIA) to increase the benefit capacity by increasing the extraction and processing capacity of old tailings from the current 45 Ktpd to 85 Ktpd through the incorporation of the resources of the Cauquenes Tranque for feeding into the tailings processing plant. In April of 2014 the project feasibility Assessment was finished, wherein the extension of the operations of Valle Central is confirmed until 2037. Resources : 338.14 Mt @ 0.27 % Cu; 0.021% Mo (inferred) Treatment Capacity : 70 ktpd of sulphur mineral. Estimated investment : MMUS$ 152 Seawater usage : Not considered Labor : 595 workers in the construction phase and 178 workers during operations. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation BASE Expansion Execution EIA approved 2015
Current status : Feasibility Assessment finished in the beginning of 2014, and EIA approved in July of 2014. The implementation is estimated for the end of 2015, after almost 2 years of construction on the project.
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3.2. COPEC Project - www.empresascopec.cl
DIEGO DE ALMAGRO (Minera Sierra Norte S.A.)
A deposit located in the Atacama Region, approximately 12 km to the west of Diego de Almagro, 15 km to the southwest of the Pampa Austral reservoir and 50 km east of Chañaral. The deposit is of the IOCG type (iron oxide minerals with copper and gold content) and has reserves of 300 Kt of copper content mas well as 27 Koz of gold in two sectors called Esther and Carmen-Paulina. This project was pushed by Cerro Dominador initially, and is now property of Mineral Sierra Norte, an affiliate of the COPEC mining group.
The project considers the development through open air mines, and benefits from mineralized resources of the oxide, mixed, and sulphured types, reaching the processing amounts of 100 Mt of mineral. The oxides will be processed in a leaching plant, through solvent extraction, and electro-winning (Lx-Sx-Ew) to produce around 11 ktpa of SxEw cathodes. The sulphur, on the other hand, will be processed in a concentration plant with around 24 ktpa of fine copper in concentrates. The project considers the use of seawater and the conduction of it through an aqueduct to the installations of the project. Resources : Without information Treatment Capacity : 24 ktpd of sulphur mineral and 2 ktpd of oxide mineral. Estimated investment : MMUS$ 597 Seawater usage : Desalinization plat located in the area of the concentration plant. The flow rate for desalinization would be of 1,865 m3/day and provide desalinized water for lesser processes, the greater consumption amounts would be direct seawater (not desalinized) Labor : 595 workers in the construction phase and 178 in the operation phase. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE New Feasibility EIA approved 2018
Current status : Project approved by the SEA in July of 2015. The implementation of both production lines is expected not before 2018.
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3.3. Hot Chili Project - www.hotchili.net.au
PRODUCTORA (Soc. Minera El Águila Ltda.)
The Productora project is located in the Sierra Coyiguales area, 18 km to the southeast of the city of Vallenar, in the Atacama Region. An assessment of the development reach in Productora indicates that it possesses enough resources to be able to develop an open pit mine and process the mineral obtained through a concentrating plant of 30 ktpd treated, with the purpose of producing copper concentrate with around 50 ktpa of fine content copper and 42 Koz of gold content for a useful lifespan of 20 years. A great opportunity for the project was identified during 2013, which corresponds to an area of copper oxides, which has the potential of significantly reducing the capital costs of prestripping and diminishing the ramp up time, adding another source of income for the project. It is to be noted that an estimate of the oxide mineral resources was not considered previously in the operational plans of the Company for the project. During May of 2014, Hot Chili was able to secure a loan of US$ 25 million from the Sprott Asociación. The funds will be destined to advancing the Productora project. This will include finishing the prefeasibility assessment, perforation campaigns, the capital for the general tasks, and the initial work for a definitive feasibility assessment. In July of 2015 contracts were signed through which CAP Mineria will be integrated to the project with a 17.5% participation with the option of receiving up to 50.1% depending on the engineering studies. Resources : 214.3 Mt @ 0.48% Cu; 0.11 gpt Au; 172 ppm Mo Treatment Capacity : 30 ktpd of sulphur mineral. Estimated investment : MMUS$ 700 Seawater usage : Not considered. Labor : Information not available Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POTENTIAL New Prefeasibility Without EIA 2018
Current status : The project is developing the prefeasibility assessment, which may be finished during 2015, to later initiate the feasibility assessment of the project, to be developed during 2015 and the end of 2016. The implementation will not take place before 2018.
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3.4. Pucobre Projects - www.pucobre.cl
EL ESPINO (El Espino S.A.)
El Espino is a copper-gold project located 36 kilometers to the northwest of Illapel, province of El Choapa, in the Coquimbo region, and is property of Pucobre through the affiliate Explorator S.A., acquired in its totality in March of 2011 from the Canadian Company Explorator Resources Inc. Currently the affiliate has been called El Espino S.A. According to the latest estimates carried out by Pucobre, the El Espino project considers the construction of a LX- SX-EW plant to treat 6.3 ktpd of leachable minerals and a concentrator plant to treat sulphide minerals at a rate of 20 ktpd. The estimated production for oxides is of 7.2 ktpa of copper in cathodes, while for sulphides it is of 32.8 ktpa of fine copper and 25 Koz of gold content in concentrates, all for a useful lifespan of approximately 18 years. Resources : 230.3 Mt @ 0.447% Cu; 0.191 gpt Au Treatment Capacity : 20 ktpd of sulphur mineral and 6.3 Ktpd of oxide mineral. Estimated investment : MMUS$ 624 Seawater usage : Not considered. Labor : 2,900 workers in the construction stage and 700 workers in the operation stage Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POSSIBLE New Feasibility EIA presented 2017
Current status : Project carrying out the feasibility Assessment and with EIA presented in April of 2013. The company foresees the termination of the feasibility Assessment and the approval of the EIA during 2015, to begin operations not before 2017.
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4. Metallurgic Plant Projects
4.1. Codelco Project - www.codelco.cl
MOLYBDENUM TREATMENT PLANT (Molyb Ltda.)
Within the past few years Codelco has shown that it needs to have an independent molybdenum concentrate processing plant available, so as to not depend critically on the “know how” and interests of a third party. Also, important current and potential clients of Codelco have suggested the convenience of a facility with minimum third party interference. This is to make of Codelco a more trustworthy and safe offering for a critical input used in the business of specialized steels. The project, located in the community of Mejillones has the feasibility Assessment finished and the investment approved by the Board of Directors of Codelco for US$ 394 million, and consists o f a molybdenum plant with an initial treatment capacity which would reach 15 ktpa of fine from toasting and 16 ktpa of fine from leaching. Also it could produce around 4,000 tpa of molybdenum content as iron-molybdenum (FeMo), with the possibility of duplicating the production to 8,000 tpa depending on the commercial demand for this product; 5.4 tpa of rhenium; 4,000 tpa of Mo in bricks and an acid plant which would produce around 32,000 tpa of sulphuric acid. This initiative will be operated through Molyb, an affiliate of Codelco, and will initiate production during the second trimester of 2015. The estimated useful lifespan is of 25 years. The first EIA of the project was favorably received in 2008, with the emission of the Environmental Qualification Resolution # 0230/08. However, due to the current project incorporating rhenium and iron-molybdenum plants, modifications to the EIA had to be made, obtaining the approval RCA in mind 2012, with resolution # 202/2012. The corporation contemplates an expansion project in 2018, with the purpose of duplicating the producing the molybdenum production capacity, of toasting as well as leaching, to be able to reach the production of 30 ktpa and 21 ktpa of fine Mo, respectively. Resources : Does not apply. Treatment Capacity : 15 ktpa fine from toasting and 16 ktpa fine from leaching. Estimated investment : MMUS$ 425 Seawater usage : Does not apply. Labor : Between 570 and 950 in the construction phase and 185 in that of operations. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation BASE New Execution EIA approved 2016
Current status : Project in execution. In January of 2014, Codelco informed the beginning of construction on the project. The implementation is estimated for 2016.
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4.2. LS-Nikko Copper Project
METAL RECOVERY PLANT / Planta Recuperadora de Metales SpA
Then Planta Recuperadora de Metales project, located in the community of Mejillones, Antofagasta region, and next to the Molybdenum Treatment Plant by Molyb, is a joint property venture between the Korean company LS- Nikko Copper (66%) and state-owned Codelco (34%). It consists in the installation and operation of a processing plant of two by-products coming from the refineries: refinery precipitate rich an copper and copper and anode slime, to recover and commercialize the precious metals contained in these products, such as tellurium, silver, gold, palladium, platinum, and selenium, as well as copper. It is worth noting that the precipitate corresponds to an intermediate product which is generated in the copper refineries, and which after a leaching process in which the copper is removed, is transformed into what is called anode slime. The precipitate possesses a high copper content (averaging over 25%) and important contents (of economic interest) of precious metals as those already mentioned. For their part, the anode slime possesses gold content of over 0.18% and/or silver content of over 17%. The production of the metals will depend on the ore grades of the by-products being processed, estimating that on average the following amounts will be produced each year: 5 tons of gold, 500 tons of silver, 150 kilograms of palladium, 10 grams of platinum, 200 tons of selenium, 20 tons of tellurium, and 1,600 tons of copper sulphide. The type of product and the quantities shows the high value of the by-products to be produced in the plant. Also, an average of 15,000 m3 per year of a copper rich solution will be produced which will be dispatched to Codelco´s processing plants, and eventually to third parties, for the production of copper cathodes from the Sx- Ew processes. Resources : Does not apply. Treatment Capacity : 4,000 t of product through refining Estimated investment : MMUS$ 96 Seawater usage : Does not apply. Labor : Between 120 and 300 in the construction phase, and 60 to 90 for operations. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation BASE New Execution EIA approved 2016
Current status : Project in execution. Currently has RCA approved from November 2013, with which the implementation is expected for the beginning of 2016.
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ANNEX 2: Description of the investment projects in gold and silver mining
1. Atacama Pacific Gold Project - www.atacamapacific.com
CERRO MARICUNGA (Minera Atacama Pacific Gold Chile Ltda.)
The Cerro Maricunga project, is a property of the Canadian Atacama Pacific Gold company, and is located 140 kilometers to the northeast of Copiapó, in the Atacama Region, in the extreme north of the Cinturón de Maricunga and 20 kilometers to the south of the gold and silver mine of Kinross Gold, La Coipa. This deposit contains resources measured and indicated of 248 Mt with grades of 0.42 gpt of gold, equaling more than 3,334 million ounces of gold content. Also it possesses potential resources in the inferred category which reach 226 Mt with an ore grade of 0.36 gpt, equaling 2.65 million ounces of gold content. According to the Preliminary Economic Assessment (PEA, for the initials in English) finished in March of 2013, the project contemplates extracting through pits of the oxide mineral to be processed at a rate of 80 ktpd though conventional leaching in piles, with which it will produce around 298 Koz of gold on average during the first 5 years of operation, for later maintain an average production of 220 Koz per year of gold Fuente: PEA Cerro Maricunga -Atacama Pacific Gold during the useful lifespan of the project which will last 10 years. In June 2013, Atacama Pacific Gold signed a joint venture agreement with Eton Chile, an affiliate of Exeter Resources who is developing the Caspiche project, for the exploration of potential sources of subterranean water in the shared properties of Cuenca Dos and Laguna Verde, in the Atacama Region. Also, in July of 2013, the company signed an agreement for the purchase of 2.5 million cubic meters of water per year, which represents a flow rate of 80 l/s with the company Aguas Chañar S.A, to supply the demand of water for the alternative of the processing plant of 65ktpd. However, the agreement indicates that it is possible to increase the water usage rate to meet the demands of 80 ktpd of processing, equivalent to 100 l/s. According the company declarations, in July of 2014 the feasibility Assessment was advanced in the modifications of the processing type and of the mining plan to be considered. Likewise, the company indicated that it was waiting for estimates from providers with respect to the purchase of equipment and some elements for the infrastructure. The closing of the negotiations, as the end of the feasibility, was expected for the third trimester of 2014. Resources : 252 Mt @ 0.434 gpt Au Treatment Capacity : 65 ktpd to 80 ktpd of oxide minerals for cianide leaching
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Estimated investment : MMUS$ 587. Seawater usage : Not considered Labor : Information not available Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POSSIBLE New Feasibility Without EIA 2018
Current status : Project with feasibility finished in the middile of August 2014 and in the process of negotiating with equipment and infrastructure providers. Currently preparing Assessment to register with the SEA, with which, implementation will not begin before 2018.
2. Barrick Gold Projects- www.barrick.com
PASCUA (Cía. Minera Nevada S.A.) - www.pascualama.com
Pascua is a gold-bearing deposit located 53 km to the north of the ex-mine El Indio, at 4,600 metros above sea level, which forms a unit with the Lama deposit on the Argentine side and which is being developed with the corresponding binational treaty. The reserves are estimated in 17.1 Moz of gold and 560 Moz of silver, principally as oxides. 75% of the mineral will be extracted from Chilean territory
(Pascua) and the rest from Fuente: Barrick Chile Argentina (Lama). The mineral will be crushed at the extraction site and will be transferred to the plants located in Argentine territory. A cyanide leaching plant is being contemplated which would treat the non-impervious mineral (83% of the total), from which
Chilean Mining Investments – Project Portfolio 2015 -2024 89 the metal dore19 is obtained, and a concentration plant for the impervious mineral (17%), from which a copper concentrate rich in gold and silver is obtained. The total projected production would reach 850 koz/ year, in gold and 35,000 koz/year of silver (26 tpa of gold and 1,100 tpa of silver approximately), of which 75% would be considered Chilean production. The marginal content of copper in the concentrate is not availbale. The company suspended20 construction work on the Chilean side of the Pascua Lama project while it worked on environmental requirements and other types of regulations to satisfy Chilean authorities. Meanwile the activities considered for the environmental protection will be continued as they have been authorized. The construction activities in Argentina, wherein the greatest part of the key infrastructure of Pascua Lama is located, which includes the processing plant and tailings tank, were paralyzed also, even though they have been finished. According to the company, the reduction finishing (ramp down) is programmed for the middle of 2014. The company expects to have approximately US$ 300 million21 in costs during 2014 to carry out the ramp down and to comply with the environmental and social obligations. The remaining tasks for project implementation will be done in stages, with specific budgets and work programs, with the purpose of ease in project planning, as well as to control the costs of the same. Barrick will explore opportunities to improve the project´s economy and effective materialization, including strategic associations or payment of royalties and other agreements for the income flow. The company maintains an active option of restarting the development of this mining activity, which has a useful lifespan of 25 years. It is to be noted that in July of 2014, Barrick signed a memorandum of understanding with 15 of the 18 Diaguita communities in the Huasco valley, which considers a six month horizon for these to see, through their representatives and first hand, the main impact of the gold and copper projects, as well as the control measures and mitigation. This memorandum of understanding is aligned with the standards of the Convenio 169 of the OIT, to which Chile is subscribed. Resources : 176.95 Mt @ 1.303 gpt Au; 22.389 gpt Ag; 0.060% Cu Treatment Capacity : 33 ktpd of mineral during the first 3 years and 44 ktpd for the rest of the useful lifespan of the project.
19 Dore metal is a gold and silver alloy, of variable proportions which are molded into bar form. It is obtained from the recovery process of the noble ores present in the minerals and is one of the typical forms of commercializing mined gold. Later the alloy is submitted to a refining process wherein the gold and silver content are separated, for their respective markets.
20 This occurred after the Appeals Court of Copiapó accepted a no-innovation order (ONI) for the project, and in July of 2013 ratified the momentary suspension of the project, after a protection resource was presented by five indigenous communities from the Huasco Valley, referring to a series of environmental irregularities such as the destruction of the Toro 1, Toro 2, and Esperanza glaciers, located in the vicinity of the mine site, and the contamination of the hydrological resources, as a result pf the deposit of waste rock, without being operative the acid draining plant which would impede such. New information is expected at the end of May. It is to be noted that the project has already been fined two times for more than $160 million in March and April.
21 It is hoped to capitalize approximately 25%, related to the water management systems and finish some minor work in Argentina and Chile. The current expenses will depend on a number of factors including the environmental requirements and regulations.
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Estimated investment : MMUS$ 4,250 (Equivalent to the part of the project budget to be raised in Chile, of a total of MMUS$ 8,500) Seawater usage : Not considered. Labor : 6,000 workers maximum in the construction phase, and 1,660 workers in the operational phase. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE New Execution EIA approved (*) 2017(e) (*) Currently suspended in a decision from the Environmental Agency (e) = estimate Current status : Execution suspended for external factors. The company indicated that the decision to recommence the project development will depend on an improvement in the economic situation and lesser uncertainty with respects to the legal and regulatory requirements. With this information Cochilco estimates the project implementation will not occur before the end of 2017.
3. Exeter Resource Corp. Project - www.exeterresource.com
CASPICHE ÓXIDOS (Minera Eton Chile)
The Caspiche project is located in the Maricunga belt, 120 km from Copiapó, between the gold and copper deposit of Cerro Casale, and the Refugio mine, at an elevation of 4,200 to 4,700 meters above sea level. The principal parameters of mining resources that the project has is estimated at 889 million tons, with 0.58 gpt of gold, 0.24% of copper, and 1.13 gpt of silver, which translates into 19.3 million ounces of gold, 41.5 million tons of silver, and 2.1 million tons of copper, which equals 30.1 million ounces of gold equivalent. According the prefeasibility Assessment published in January of 2012, an open pit operation was estimated for 19 years, with a concentration plant treating 150 ktpd, as well as a leaching plant for the oxide minerals and low grade copper. This last could treat minerals at 72ktpd during the first 5 years, to them work at only 33 ktpd during years 6 to 10, after which the oxide operation would be shut down. The average production estimated in the prefeasibility Assessment is estimated around 696 koz/y of gold, and 844 koz/y of silver (21 tpa of gold and 26 tpa of silver approx..) and 110 ktpa of fine copper in concentrate, which would contain one part of both gold and silver. However, in May 2014 Exeter published a report about the results of the Preliminary Economic Assessment (PEA), of the Caspiche project, wherein large modification of the prefeasibility Assessment from 2012 was released. In this Assessment there are three options for materialization: i. Open pit operation, 10 years of useful lifespan, to remove oxide resources and recover gold through heap leaching, at a rate of 30 ktpd;
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ii. Open pit operation with an 18 year useful lifespan, to use oxide resources (years 1 to 5) at 60 ktpd to recover gold through heap leaching and sulphide resources (years 6 to 18) in a concentration plant of 27ktpd to produce copper and, later, to recover gold through cyanide leaching. iii. Mixed operation, open pit with a useful lifespan of 5 years to recover oxidized gold ore through heap leaching at 60 ktpd and subterranean operations (sublevel open stop) to extract sulphur mineral and process it in a concentrator plant of 27 ktpd to produce copper, and later, recover gold through cyanide leaching.} As declared by the company, it would opt for a “staged” development, wherein it would chose the first alternative, valued in US$ 344 million, to recover the oxidized gold ore through heap leaching at a rate of 30 ktpd for 10 years to produce 148,000 oz of Au equivalent during the first 5 years and then 122,000 oz of AU equivalent the rest of the useful lifespan. However this option does not show, with improved market conditions, what could be the most costly alternative (number three) with a value of US$ 1,968 million. Resources : 1,601.7 Mt @ 0.488 gpt Au; 0.177% Cu; 1.167 gpt Ag Treatment Capacity : 30 ktpd of oxidized ore (with the possibility of increasing to 60 ktpd and generate a sulphurs line of 27 ktpd). Estimated investment : MMUS$ 344 (could increase to MMUS$ 1,968 if the third alternative is developed to complement the project). Seawater usage : Not considered. Labor : Information not available. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POSSIBLE New Feasibility Without EIA 2017(e) (e) = estimated Current status : Project carrying out feasibility Assessment. In January of 2012 the prefeasibility Assessment was finished, results were optimized in a preliminary economic assessment developed in 2013 and published in May 2014. Cochilco estimates the implementation date for 2017.
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4. Kingsgate Consolidate Ltd. Project - www.kingsgate.com.au
NUEVA ESPERANZA (Laguna Resources Chile Ltda.)
Nueva Esperanza, previously called the “Arqueros”, Project is located in the Cinturón de Maricunga, to the east of Copiapó. The project consists of three well defined mineral deposits as well as a series of exploratory objectives which are being carried out. The principal deposits are Arqueros, Chimberos and Teterita. Arqueros has been previously mined on a limited scale through subterranean mining from the years 2000 to 2004, wherein the extraction was around 288,000 oz of gold equivalent. Also, Chimberos was developed as a strip mine, giving around 20 Fuente: Kingsgate Consolidate million ounces of silver in the years 1998-1999. These three deposits currently have combined mineral resources of 29.7 Mt with average ore grades of 0.25 gpt of gold and 79 gpt of silver, equivalent to 1.9 million ounces of gold equivalent. The project initially considered developing the remaining resources of the previous development, considering the installation of a processing plant for these minerals with a capacity of 6 ktpd, to produce 250 kg/y of gold and 100 tpa of silver during the 15 years of useful lifespan estimated for the project. At the beginning of 2013 the company established a definitive work agreement meeting the Convenio 169 of the OIT with the indigenous communities affected by the project, with the purpose of diminishing any possible impact. In July, the SEA delivered the approved RCA for the project, with which the company hoped to begin construction in September of 2013. Due to a lack of electrical supply, in the most advanced stages of engineering the project should have considered the generation of electricity, incorporating technology which required lesser consumption, changes which would be implemented within the borders of the property which is in sub-conjunction with the area already evaluated for the EIA: However, and in accordance with the current environmental codes, the changes introduced were submitted for approval to the regional authorities in the area of the Environmental Evaluation System in a new Environmental Impact Declaration (DIA) called “Modificaciones Arqueros”, entered in April of 2014. However, in May 2014 the SEA of Atacama placed an early termination to the environmental evaluation of the Environmental Impact Declaration of the Modificaciones Arqueros project, generating a new delay for the beginning of construction, foreseen for the summer period of 2014/2015. Therefore, the company, in July of 2014 resubmitted the EIA of the project, correcting the lack of information requested by authorities and meeting the requirements which where suggested during the period in which it was in the SEIA. Notwithstanding, in May of
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3025, the company retracted the DIA from the environmental impact evaluation system, due to the development of new mineral reserves in the Chimberos area. The modifications considered in the project contemplate adding the Chimberos and Teterita pits, with a common dump, as well as mineral processing through cyanide leaching in a permanent heap and the addition of a thermoelectric plant. The modifications to the project also require adjustments be made in relations to the crushing plant and complementary tasks, which includes the installation of a mineral transportation belt from the plant to the cyanide leaching area. Also, as is mentioned in the Environmental Impact Declaration, and in accordance with the current identification of the mining reserves and the definition of the treatment capacity, the project will have a useful lifespan of eight years. The additional material which will be extracted and which will feed the plant during the useful lifespan will be around eight million tons, therefore the amount of additional tailings sent to the dumps will be around 27 million tons. The treatment capacity, including the processing of minerals from the Arqueros pit has already been approved environmentally, and increases by 3 million tons per year, equivalent to 78.5 ktpd, with which an average of 500kg/ y of gold and 170 tpa of silver. Resources : 27.4 Mt @ 0.286 gpt Au; 84.34 gpt Ag Treatment Capacity : 8 ktpd of oxide mineral for cyanide leaching. Estimated investment : MMUS$ 150 Seawater usage : Not considered Labor : 800 workers in the construction phase and 150 in operations. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POSSIBLE New Feasibility Without EIA(*) 2017 (*) DIA with modifications desisted in May of 2015.
Current status : Project developing feasibility Assessment, delving into mining prospection labors and with environmental qualification desisted in May of 2015. Implementation of the project is estimated for the end of 2017.
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5. Kinross Projects - www.kinross.com
LA COIPA FASE 7 (Compañía Minera Mantos de Oro)
La Coipa is a gold mining site located 1,000 kilometers north of Santiago, and 140 km to the northeast of Copiapo, in the gold district of Maricunga, Atacama region. The project denominated as the “Explotación de Minerales Coipa Fase 7” in the environmental impact Assessment has the objective of extracting gold and silver minerals from the new “Pompeya” deposit to allow the operational continuity of the current operation, due to the imminent depletion of the mineral resources in the current pits on the site. The new deposit would be developed through the conventional open pit method and the mineral transported to the current processing plant because of proximity. It is to be noted that the La Coipa site was designed to process up to 15 ktpd of ore, for which, in accordance with what is indicated by the company in the EIA of the project, it is confirmed that increasing the capacity of the plant, the equipment or the installations will be not be necessary. Also it is estimated that the average amount which would reach the processing plant from the site would be less than what has been arriving in the past two years, which will require lower amounts of inputs from the plant. On another note, no construction or expansion of any installation or area related with the camp, workshops, explosives storage, provisions supply area, and industrial or domestic waste management would be required, as all of the existing infrastructure from the La Coipa site will continue to be available for the same purposes. The Environmental Impact Assessment (EIA) presented in July of 2013 was recalled by the company, which coincides with the decision of Kinross to momentarily “freeze” their projects until the markets have stabilized. Therefore the company will concentrate their efforts in the second semester of 2014 on continuing the exploratory studies for the reopening of La Coipa. These will focus on the Pompeya deposit and on the Purén mine, as a joint venture with Codelco 65% Kinross y 35% Codelco). In July of 2015 the company represented the project to the SEA for the environmental approval. Resources : 16.165 Mt @ 1.782 gpt Au; 45.906 gpt Ag Treatment Capacity : 15 ktpd of mineral for cyanide leaching. Estimated investment : MMUS$ 200 Seawater usage : Not considered. Labor : 100 workers in the construction phase and 80 workers in the operation stage.
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Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE Replacement Feasibility EIA presented 2018(e) (e) = estimated Current status : Project resubmitted for environmental approval in 2015. In this case, Cochilco estimates that the implementation will not be before 2018.
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ANNEX 3: Description of the investment projects in Iron mining
1. Andes Iron Project - www.conocedominga.cl
DOMINGA
The Dominga project, owned by the Chilean company Andes Iron, is located north of the historical EL Tofo Mine, 70 km north of La Serena and west of the Ruta 5 Norte, in the middle of the Coast Mountain Range in the community of La Higuera, Elqui province, in the north of the Coquimbo region. It consists of an open pit mine which will produce high grade iron concentrates, and as a by-product copper concentrate. The mine projects production of 12 million tons of concentrate per year for pellet feed and 150,000 tons of copper concentrate yearly during a useful lifespan of 22 years. The iron mineral will be sent through a subterranean concentration duct which will be built in the Totoralillo North sector, where it existed in the XIX century as the first mining port of the area. However the copper concentrates would be transported by truck. The operation integrates three areas:
Sector Dominga: considers the associated installations in two zones of mineral development through strip mining called Rajo Norte and Rajo Sur; a processing plant, a gravel deposit, and a heavy tailings deposit, as well as all of the auxiliary work and installations associated with these procedures.
Sector Lineal: considers a system of subterranean aqueducts which will transport the water from the Totoralillo sector to the Dominga sector. It also contemplates a subterranean concentrator duct which would send iron ore from the Dominga area to Totoralillo; an electricity transmission line of 66kV and a service road.
Sector Totoralillo: corresponds to the Shipping Terminal for iron concentrate which will reunite, also, the thickening, filtering, and storage system installations, as well as the areas for collection, desalinization, and water impulsion to the Dominga Sector, and the discharge of the seawater brine. The Environmental Impact Assessment (EIA) was presented in2013, however the company began a dialogue with the la Higuera community in 2011, with the purpose of creating awareness of the project with anticipation with the communities possibly affected by the project. Resources : 2,082 Mt @ 23.3% FeT; 0.07% Cu Treatment Capacity : 95 ktpd of ores
Estimated investment : MMUS$ 2,888
Seawater usage : Desalinization plant located in the Totoralillo Norte area, with a 450 l/s capacity. Labor : 9,800 workers in the construction phase, and 1,450 in the operational stage.
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Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation BASE New Feasibility EIA Presented 2019
Current status : Project in feasibility and in process of obtaining environmental permits. Currently the only issue is obtaining the permits to build the port. The implementation is estimated for not before 2019.
2. CAP MINERÍA Project. - www.capmineria.cl
ROMERAL FASE V
Minas El Romeral is one of the CAP Minería mining-metallurgic complexes and considers among the principal assets the iron deposit “Minas El Romeral” and other productive and infrastructure installations necessary for the benefit and management of the mineral it commercializes. The “Romeral Fase V” project, to be carried out in the Coquimbo region, consists in prolonging the extraction activities carried out in the El Romeral Mines, extending the useful lifespan for a period of 13 years. The project will develop high and low ore grade resources in addition to those contemplated in Fase IV, where the current prospections show the existence of 390 million tons of mineral as a mining resource below the current phase. To be able to access these resources it is necessary to expand, the Cerro Principal pit as well as the Norte and Sur dumps, as well as improve some of the current installations. This expansion contemplates improving and using part of the existing infrastructure, therefore only a few additions on a smaller scale will be required, such as the expansion of the mechanic shops, a new parking area for mining equipment, changing houses, lunchrooms, the relocation of powder kegs and the explosives plant. Additionally, it will carry out technological adaptations and maintenance in the existing infrastructure to reach the desired extension of the useful lifespan. It is to be noted that the project does not contemplate an increase in the extraction rates of the deposit nor of the processing capacity of the existing plant. Resources : No information available. Treatment Capacity : No information available.
Estimated investment : MMUS$ 198
Seawater usage : Not considered. Labor : Currently in the site there are 427 company workers and around 633 contractors, with estimates of an additional 200 workers in the construction phase and 425 in the operational phase (company + contractors).
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Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation BASE Expansion Execution EIA approved 2015
Current status : The EIA of the project received the approval of the RCA during the second semester of 2013, beginning construction immediately. Currently the company is studying the economic viability of the El Romeral mine, because of the low iron prices. Therefore the implementation would be for 2015.
3. Hebei Wenfeng Industrial Group Project - www.wfsteel.com
OSO NEGRO (Minera San Fierro Chile Ltda.)
The Oso Negro project, property of the Chinese group Hebei Wenfeng, is located approximately 60 km south of the city of Copiapó. It considers the operation of an iron mine from a vein located in the Cerro Bandurrias sector for the later transportation overseas to the mineral processing plants located in China. The operation would begin with the old gravel layers located over the ore, continuing with following with the stripping, and finishing with the ore extraction from the pit. The pit will be 1,200 m long and 300 wide. The daily extraction average has been estimated at 4,805.45 tpd, to be crushed and submitted to a dry magnetic separation, with the purpose of producing 2,988 tpd daily of dry concentrate with a 55% iron content. The processing plant will have a primary crusher, a secondary crusher, a fine material collection system, high pressure milling or HPGR, dry magnetic separator, different transportation belts for mineral transportation within the plant, a dust suppression system, and the transportation of dry concentrate to the Punta Caleta Port or to the Punta Totoralillo port, depending on the final collection place. Resources : No information available. Treatment Capacity : 4,805 tpd of iron ore. Estimated investment : MMUS$ 90 Seawater usage : Not considered. Labor : 220 workers in the construction phase and 500 workers in the operation phase. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POSSIBLE New Feasibility EIA presented 2016(e) (e) = estimated Current status : Due to the delay in the approval of the EIA, presented in 2012, Cochilco estimates that the project´s implementation will not be before 2016.
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ANNEX 4: Description of the investment projects of industrial minerals
1. Ingenieros Asesores Ltda. Projects
ARBIODO
The Arbiodo project corresponds to a non-metal mining project whose main objective is the production of iodine and nitrates from caliche, passing through a series of processes within the area of development and the industrial plants of the Mining area. From the territorial and analytical points of view, the project is made up of three fundamental areas, which correspond to the Coastal Area, the Pampa Area, and the Mine Area. The Costal Area is made up of the water intake for seawater at the extraction point, as well as part of the length of the duct which is 18,83 km long, in this area there are two pumping stations associated with the water flow; the Pampa Area is made up of 28.34 km of aqueduct; and the Mine Area, which corresponds to the place where the mineral extraction takes place and wherein all of the productive and industrial processes for obtaining iodine and nitrates takes place, and furthermore, where the industrial plants and installations associated with project development will be located. This area contains 14.43km of aqueduct for seawater. The section of the aqueduct for seawater will have a service road, which will be used for the installation of the pipeline as well as for maintenance. Along with the pipeline will be the electrical transmission line which will feed the pumping stations for the water source, and will also will also deliver the energy for the functioning of the Mine Area installations. Also, it contemplates the exportation of the finished product to the port of Chañaral, preferably, which is located in the town with the same name in the Atacama Region (however the use of the Antofagasta and/or Mejillones Ports area also being considered, both being in the Antofagasta Region. Resources : No information available.
Treatment Capacity : 400,000 t/year of nitrate prills, 20,000 tons/year of boric acid and 2,7800 tons/year of iodine.
Estimated investment : MMUS$ 503 Seawater usage : Not considered. Labor : Between 325 and 400 workers in the construction stage and 250 and 450 workers in the operational stage. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation POTENTIAL New Feasibility EIA presented 2017
Current status : Project with EIA presented in March of 2015 with a request for early termination for issues not corrected in May of 2015.
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2. SQM S.A. Projects - www.sqm.cl
AMPLIACIÓN PAMPA BLANCA (SQM Industrial)
The project corresponds, principally, to the expansion of the current Pampa Blanca mining site, located to the south of the SQM operational center in Maria Elena, consisting of the incorporation of six new mining zones to increase the caliche extraction rate to 37,300,000 tpa for a useful lifespan of 50 years. Additionally it considers the incorporation of two industrial areas, to increase the production of iodide to 10,000 tpa of iodine equivalent to feed a new iodine plant which will increase iodine production to 10,000 tpa and the production of nitrate salts at 3,425,000 tpa (equivalent to the production of 1,293,000 tpa of NaNO3). Complementarily, it would equip the project with a new electrical transmission system and a storage system of 500 l/s of seawater from the Bay of Mejillones, to address the increase foreseen in the productive levels. Resources : No information available.
Treatment Capacity : No information available.
Estimated investment : MMUS$ 665 Seawater usage : Not considered. Labor : 765 workers in the construction phase and 510 workers in the operational phase. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE Expansion Execution EIA approved 2017
Current status : Project with DIA approved in October of 2013. Currently the company indicates that the project is under evaluation due to market conditions. The implementation is not estimated before 2017.
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3. White Mountain Titanium Corp Project - www.wmtcorp.com
CERRO BLANCO
White Mountain Titanium is the owner of the rutile (titanium) deposit Cerro Blanco, located near the Port of Huasco, 39 km to the west of the city of Vallenar, in the Atacama region. The name is due to the location of the deposit on the hill with the same name. According to the last definition of resources and reserves of the company, it is estimated that the reserves of the mineral rutile in the deposits for the project are of 81.5 million tons approximately, with an average ore grade of
1.97% rutile (TiO2), and a cut-off grade of 0.8%, as well as a sterile/mineral average of 1.78. The company´s project considers developing the mineral resources through the process of conventional open mit mining with a development rate of 4 million tons per year of rutile mineral, equivalent to an average total material use (mineral and sterile) of 11 million tons per year. The total of the exploitation of the deposits will end in a period of 20 years and 4 months. Also, the gravitational concentration, flotation and magnetic concentration plant will produce approximately
135Ktpa of rutile concentrate (TiO2), with an ore grade of approximately 96%. The concurrent feldspar production considered in the feasibility study will be reviewed by the company in the future. The project will have an estimated useful lifespan of 24 years, including 6 months programmed only for acquisitions and detail engineering, 18 months for the construction phase, 21 years for the operation phase, and 1 year for the closing phase.
Resources : 111.5 Mt @ 1.75% TiO2 Treatment Capacity : 17.5 Ktpd of rutile mineral. Estimated investment : MMUS$ 380 Seawater usage : Desalinization plant located close to the Huasco community, with a 980 l/s capacity. Labor : During the construction phase an average of 765 workers will be hired. During the operation phase an average of 510 workers will be hired. Condition of materialization :
Condition Project Type Stage of advance SEA permit Implementation PROBABLE New Feasibility EIA approved 2017
Current status : EIA presented in the beginning of 2013 and approved in May of 2015. It is estimated that the implementation will not happen before 2017.
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ANNEX 5: Units of measurement and abbreviations
Weight and measurements Processes and inputs g Gram g/L Grams per liter kg Kilogram kg/L Kilograms per liter t Metric ton l/s Liters per second kt Thousands of metric tons l/m Liters per month Mt Millions of metric tons kV Kilovolts oz Troy ounces kVA Kilovolts-amperes koz Thousands of troy ounces GWh Gigawatt-hour Moz Millions of troy ounces MWh Megawatt-hour lb Pound Mlb Million pounds Production processes m Meter Flot Flotation km Kilometer Lix Leaching m2 Square meter SX Solvent extraction m3 Cubic meter EW Electro-winning
Chemical and mineral elements Money and prices Ag Silver US$ US Dollar Au Gold MUS$ Thousands of US dollars Cu Copper MMUS$ Millions of US dollars Cu cát Copper cathodes US$/lb Dollars per pound Cu conc Copper content in concentrate cUS$/lb Cents of a dollar per pound
CuEq Copper equivalent US$/oz Dollars per Troy ounce Fe Iron Fsp Feldspar Geographic Abbreviations
H3BO3 Boric acid m.s.n.m. Meters above sea level
H2SO4 Sulphuric acid UTM Universal Transversal Mercator KCl Potassium chloride
KNO3 Potassium nitrate Types of societies LiCl Lithium chloride Cía. Company
NaNO3 Sodium nitrate Inc. Incorporated Mo Molybdenum Int. International
TiO2 Titanium dioxide (Rutile) Ltda. Limited Ltd. Limited Concentration and production rates S.A. Limited Liability Company gpt Grams per ton SCM Contractual Mining Society ppm Parts per million CCM Contractual Mining Company oz/a Troy ounces per year koz/a Thousands of Troy ounces per year Other Moz/a Millions of Troy ounces per year Ind. Industrial kg/a Kilograms per year Min. Mineral tph Metric tons per hour RCA Environmental Qualification Resolution tpd Metric tons per day DIA Declaration of Environmental Impact tpm Metric tons per month EIA Environmental Impact Assessment tpa Metric tons per year SAG Semi-autogenous ktpa Thousands of tons per year API Authorization of Investment Projects Mtpa Million tons per year PND Business and Development Plan
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This report was elaborated in the Department of Studies and Public Policies by
Cristian Cifuentes González Strategic and Public Policy Analyst
Emilio Castillo Dintrans Strategic and Public Policy Analyst
Jorge Cantallopts Araya Strategic and Public Policy Director August / 2015