Chilean Copper Commission Research Department
INVESTMENT IN THE CHILEAN MINING INDUSTRY Project Portfolio , 2013-‐2021
DE / 08 / 2013
Intellectual Property Registration No. 231924
Translated by / Traducido Patricio por Mason, M.A. Contents
Executive Summary ...... 1 I. Introduction ...... 3
II. Mining Project Portfolio ...... 4
2.1 Copper Mining Projects ...... 5
2.2 Gold and Silver Mining Projects ...... 6
2.3 Other Relevant Mining Segments ...... 6
III. Projected Investment ...... 7
3.1 Investment Profiles ...... 7
3.2 Investment Distribution by Project Status and Type ...... 7
3.3 Regional Distribution of Projected Mining Investment ...... 9
3.4 Projected Mining Investment Distribution by Country of Origin ...... 9
3.5 Portfolio Comparison, 2012-‐2013 ...... 9
IV. Projected Copper Production to 2021 ...... 11
4.1 Mined Copper Production Capacity Through 2021 ...... 11
4.2 Regional Distribution of Mined Copper Production Capacity...... 12
4.3 Estimate Review ...... 13
4.4 Maximum Concentrate Processing Capacity ...... 15
V. Estimated Production of Other Minerals ...... 17
5.1 Gold and Silver ...... 17
5.2 Molybdenum ...... 18
5.3 Iron ...... 18
5.4 Industrial Minerals ...... 19
VI. Concluding Remarks ...... 20
Annex -‐ A Methodology ...... 22
Annex -‐ B Copper Mining ...... 25
Annex -‐ C Gold and Silver Mining ...... 40
Annex -‐ D Iron and Industrial Minerals ...... 47
Translated by / Traducido Patricio por Mason, M.A. Chilean Copper Commission -‐ Research Department July 2013
INVESTMENT IN THE CHILEAN MINING INDUSTRY 2013-‐2021 Portfolio
Executive Summary
Investment in the Chilean mining industry stands at US$112.5 billion. Mining companies have announced 49 projects involving upwards of US$90 million each. Most are in progress or undergoing review, with investment decisions slated for no later than 2017 and start-‐up by 2021. The project portfolio is as follows: PROJECTED MINING ESTMENT INV (US$ MN) Subtotal 2013- SECTOR Prior to 2013 2013 2014 2015 2016 2017 After 2017 Share 2017 TOTAL
1) Copper (1.1 + 1.2 + 1.3) 10,386 7,701 10,401 10,977 12,805 13,024 54,908 21,425 86,718 77.0
1.1) CODELCO 3,397 3,969 4,623 4,757 4,552 4,565 22,466 4,683 30,546 27.1
1.2) Large Private Miners 6,765 3,613 5,390 5,586 7,454 7,735 29,778 16,357 52,899 47.0
1.3) Medium-Scale Miners 224 119 388 634 799 724 2,664 385 3,273 2.9
2) Gold & Silver 3,394 813 1,529 2,825 4,125 4,052 13,344 5,050 21,788 19.4
3) Iron & Industrial Minerals 673 1,069 925 553 318 183 3,049 329 4,050 3.6
Total (1+2+3) 14,452 9,583 12,855 14,355 17,249 17,259 71,301 26,803 112,556 100.0 Source: Cochilco, based on published reports.
The portfolio is led by copper mining, with 28 projects and two additional investment lines.1 These include Codelco’s six structural projects, expansion of megadeposits such as Escondida, Pelambres and Collahuasi, concentrate operations replacing depleted SX-‐EW operations (El Abra, Quebrada Blanca, , etc.) and new undertakings by medium-‐size miners . Second in line is gold mining, with ten projects accounting for 19.4 percent of investment. Three major gold projects (Caspiche, Cerro Casale, El Morro) will also produce copper while two other replacement projects will help revitalize major gold mining operations. Iron, titanium and nitrate are also attracting fresh investment. Most investment targets are in northern Chile. While Antofagasta leads the way with US$43 billion or 38 percent, new large-‐scale gold mining operations in Atacama are attracting a healthy US$34 billion or 30 percent. Fully 46 percent of all investment comes from Chilean companies , including majors such as Codelco and Antofagasta Minerals and medium-‐size Copec and Pucobre. Accounting for the balance are eleven countries, notably Canada (27%) in gold mining and Japan with a wholly-‐owned operation (Caserones) and a minority stake in several companies. India and China are venturing into iron mining. Due to the nature of the mining business, all investment forecasts are subject to change. In the industry, projects in progress are considered highly certain while those under review are noted for varying degrees of uncertainty. As development moves forward, projects undergo changes that tend to impact expected production capacity, investment amounts, and time frames.
1 Investment by Codelco in development and information projects other than structural projects.
1 Chilean Copper Commission -‐ Research Department July 2013
This update to Cochilco’s 2012 mining investment report shows a US$8.2 billion increase in . value This is the result of a US$7.36 billion upward revision of 22 projects plus a net US$900 million gain caused by the entry of nine new projects and the start -‐up or cancellation of seven other projects in 2012. In addition, ome s project schedules underwent changes ranging from a one-‐year acceleration to a two-‐year delay . Overall, shorter-‐term investment s declined and more were shifted to beyond 2015. Additions to production capacity were also impacted as a . result Refined copper production capacity in 2021 should stand at 8.1 million tons, rising to 8.4 million once all projects start to operate at capacity. Most of the increase will come from concentrate production, which should rise from 3.7 million tons in 2012 to 6.8 million in 2021. By contrast, SX-‐EW cathode production should decline from 2.3 million tons in 2012 to 1.4 million in 2021. One effect of increased concentrating capacity will be a sharper rise in ore volume fed to concentrating plants. Due to persistent declines in copper grades, throughput is expected to rise upwards of 180 percent, from 450 million TPY in 2012 to 1.2 billion TPY in 2021, with concentrate production capacity rising 86 percent from 3.7 to 6.8 million TPY in the same . period As a result, plants are being redesigned on a larger scale, resulting in added costs and requiring more energy, water and other inputs to produce a imilar s amount of copper, with the attendant impact on demand for these goods and services. Increased productivity is one of the new challenges facing the Chilean mining industry as it seeks to remain competitive.
2 Chilean Copper Commission -‐ Research Department July 2013
I. Introduction
The Chilean Ministry of Mines considers investment a strategic pillar of long-‐term mining growth. This is an industry that turns resources in the ground into tangible wealth that contributes decisively to the economic and social growth of all Chileans. The Chilean Copper Commission (Cochilco) systematically tracks mining investment and reviews planned projects and resulting opportunities. Findings are published annually for the benefit of interested public officials and private industry players . This report provides an update to mining industry investment in Chile, notably projected investment and production capacity potential through the next decade. It has three sections: Inventory of copper, gold, silver, iron, and industrial mineral projects. The tally includes all projects worth upwards of US$90 million either in progress or likely to materialize no later than 2017.2 It does not include initiatives in the exploration or stage below the above amount. Planned investment by Codelco and large and medium-‐size copper, gold, silver, iron and industrial mineral mining companies. A ten-‐year projection and review of the mined (concentrate; SX-‐EW cathode) copper production potential through 2022. Includes a global estimate of gold, silver, molybdenum, iron and industrial mineral production. Project amounts, time frames and other nformation i is gleaned from public company reports. While there is no guarantee that projects will materialize as stated, these reports stand as reliable proof of interest and company perceptions of the geological potential and economic and political conditions prevailing in Chile.
2 The methodology is explained in Annex A. Copper mining project details are provided in Annex B. Annex C describes gold and silver projects and Annex D review iron and industrial mineral ( iodine, nitrate, potassium salts, titanium oxide) projects.
3 Chilean Copper Commission -‐ Research Department July 2013
II. Mining Project Portfolio
As of July 2013, projected investment in the Chilean mining industry stands at US$112.5 billion. Companies have announced 49 projects, including US$86.7 billion in copper mining, US$21.7 llion bi in gold and silver mining, and US$4 billion in iron and industrial minerals . mining These are as follows:3
TABLE 1: MINING PROJECT PORTFOLIO, 2013-‐2021 (START-‐UP DATES REPORTED JULY TO 2013)
./12(")(*&30( !"#$"%&'( '$)*+,"( )'+$#")$ !+,")$ $+-.)/ "0'+ !"#-+ 4567((((((((((( 8&!9(:;< !"#$%!"#& '()*+ ,-./01-2,340/ 56782'9:/.2%2,6 ;<=4-6> +/?0<1/@/:A ,-:>A=61A4-: BC$&" !"#$%!"#& DEF'+GH(D'E25+'I*,( ,-./01-2,340/ 56782'9:/.2%2,6 ;<=4-6> E/9 ,-:>A=61A4-: #CJJ& !"#$ GDEDK(+'2)HL*K2GDE* ,-./01-2G4:4>A=-2)<0/>2M4N4>4-: 56782'9:/.2%2,6 H:A-O
3 Where no precise information is available, start-‐up year is estimated based on the methodology on Annex A(5). Includes Cerro Casale, Collahuasi Phase III, Inca de Oro, and Relincho.
4 Chilean Copper Commission -‐ Research Department July 2013
2.1 Copper Mining Projects
The copper mining investment portfolio consists of 30 projects valued at US$86.7 billion, including 16 implemented by large private companies, six by medium-‐size private miners, and six structural projects and two lines of investment in a range of minor initiatives4 to be completed by Codelco in -‐2013 2017. Details are reviewed in Annex B. TABLE 2: COPPER MINING PROJECTS (BY PRINCIPAL)
#$-*.+/*$+, !"#$%#!&' !"()*%+, .+&"+30! 0.1,/2
!"#$%&'%!($)"* +,-./ 0/1-20/1. 345!%67"3!4&'%!($)" 1,88. 0/1-20/1. 6343*"%!O$*&634$ -,+-8 0/1- 4$:&634$&9$;$9 -,8/8 0/1. %(8*'%(,%L#'* '3"2'974"&"%74*5$% 1,+0/ 0/1< )#=>=3)767"7&=4?$%@%!=4? +,/ '6?@A,!?BC65A,/B2A?D 74"=)!C7 1,B// 0/18 $*'$%74D7&='@%7?$ 88/ 0/18 $4)=$4"%!&!E3?$* A// 0/1A &$+(M&N&.+&,/#$*"&'. $*'$%74D7&*=%&F$G&"$9H@%75!I -,8// 0/1. $4)=$4"%!&*=953?$* -,8// 0/0/ 9!*&'$976J%$*&33&$E'74*3!4 .,/// 0/01 +456,&254E6@6D56,/B2A?67D FG;:<:
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
4 See “Other D evelopment Projects” and “Research Projects” in Annex A(3).
5 Chilean Copper Commission -‐ Research Department July 2013
2.2 Gold and Silver Mining Projects
Table 3 shows g old and silver projects expected to start up in 2015-‐2020. TABLE 3: GOLD AND SILVER NG MINI PROJECTS (BY PRINCIPAL ) #$-*.+/*$+, !"#$%#!&' !"()*%+, .+&"+30! 0.1,/2 4&/&$&,5('6 !"#$%&'( 789 )*+, :#$5.5&+*,#$+; %-"./0"12"#/%3/040/#5-"#(1 9<< )*+, 2/16-/ 78),* )*+9 A&""#%:,5('6 6"##(06/1/:" 98*** )*)* +=>?@,A&""#%:,5('6 B Source: Cochilco, based on published reports. These include projects focusing on producing both gold and significant quantities of copper (Cerro Casale, El Morro, Caspiche). Details are reviewed Annex in C. 2.3 Other Relevant Mining Segments These include iron, with five projects worth US$1.72 billion, and industrial minerals, with three nitrate and iodine and one titanium oxide project jointly valued at US$2.32 billion. Details are reviewed below and in Annex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ource: Cochilco, based on published reports. 6 Chilean Copper Commission -‐ Research Department July 2013 III. Projected Investment 3.1 Investment Profiles Projects have a significant economic impact as they progress from initial review and equipment purchase to facility construction and assembly through to start -‐up, a process often lasting several . years Estimated below are nnual a outlays in -‐ 2013 2017, including some materialized prior to 2013, as applicable. Outlays beyond 2017 are shown in the aggregate. These estimates are for reference only and do not represent a company commitment. TABLE 5: PROJECTED MINING ESTMENT INV (US$ MN) Subtotal 2013- SECTOR Prior to 2013 2013 2014 2015 2016 2017 After 2017 Share 2017 TOTAL 1) Copper (1.1 + 1.2 + 1.3) 10,386 7,701 10,401 10,977 12,805 13,024 54,908 21,425 86,718 77.0 1.1) CODELCO 3,397 3,969 4,623 4,757 4,552 4,565 22,466 4,683 30,546 27.1 1.2) Large Private Miners 6,765 3,613 5,390 5,586 7,454 7,735 29,778 16,357 52,899 47.0 1.3) Medium-Scale Miners 224 119 388 634 799 724 2,664 385 3,273 2.9 2) Gold & Silver 3,394 813 1,529 2,825 4,125 4,052 13,344 5,050 21,788 19.4 3) Iron & Industrial Minerals 673 1,069 925 553 318 183 3,049 329 4,050 3.6 Total (1+2+3) 14,452 9,583 12,855 14,355 17,249 17,259 71,301 26,803 112,556 100.0 Source: Cochilco, based on published reports. Copper mining accounts for fully 77 percent of the projected US$112.5 billion investment amount, followed by gold and silver mining with 19.4 percent. The remaining 3.6 percent is destined for iron and industrial minerals mining projects . Of this amount, 12.8 percent has been materialized, 63.3 percent will be disbursed in 2013-‐2017, and 23.8 percent will materialize in 2018-‐2021. The methodology used to compile and project process data is shown on Annex A. 3.2 Investment Distribution by Project Status and Type Projects often run into internal and external issues that force a revision of the original plan. Per the methodological criteria explained in Annex A (2), projects herein are classed as either greenfield (i.e., new) or brownfield (i.e., replacement or expansion of existing operations). In terms of status, they are in progress or in the feasibility or prefeasibility stages. These factors help more accurately assess the likelihood of materialization as stated. Conditions assessed are base line, probable, and possible.5 5 Baseline: In progress and highly probable. Probable: Replacement, expansion or new projects in the feasibility stage by companies operating in Chile and slated to start up through 2017. Possible: New projects Feasibility study underway by new entrants and projects in the pre feasibility stage. 7 Chilean Copper Commission -‐ Research Department July 2013 Table 6 shows estimated investment amounts by project status, type and degree certainty of . TABLE 6: INVESTMENT DISTRIBUTION BY STATUS AND TYPE (US$ Mn) Subtotal 2013- Sector Status / Condition Prior to 2013 2013 2014 2015 2016 2017 Beyond 2017 Share 2017 TOTAL In Progress / Baseline 11,319 6,828 6,649 4,228 1,749 1,536 20,991 498 32,808 29.1 Feasibility / Probable 588 866 2,903 3,780 5,146 3,302 15,997 381 16,966 15.1 Overall Feasibility / Possible 2,033 1,199 2,521 4,857 8,094 9,158 25,829 13,462 41,325 36.7 Prefeasibility / Possible 512 690 782 1,490 2,259 3,263 8,484 12,462 21,457 19.1 Amount 14,452 9,583 12,855 14,355 17,249 17,259 71,301 26,803 112,556 100.0 In Progress / Baseline 8,367 5,659 5,825 3,200 1,376 1,433 17,493 229 26,089 23.2 Feasibility / Probable 420 496 2,247 3,480 5,046 3,222 14,491 321 15,232 13.5 Feasibility / Possible 1,087 856 1,547 2,807 4,124 5,106 14,440 8,413 23,940 21.3 Copper Prefeasibility / Possible 512 690 782 1,490 2,259 3,263 8,484 12,462 21,457 19.1 Amount 10,386 7,701 10,401 10,977 12,805 13,024 54,908 21,425 86,718 77.0 In Progress / Baseline 2,420 380 330 850 270 0 1,830 0 4,250 3.8 Feasibility / Probable 73 140 310 100 0 0 550 0 623 0.6 Gold Feasibility / Possible 902 293 889 1,875 3,855 4,052 10,964 5,049 16,915 15.0 Prefeasibility / Possible 0 0 0 0 0 0 0 0 0 - Amount 3,394 813 1,529 2,825 4,125 4,052 13,344 5,050 21,788 19.4 In Progress / Baseline 533 789 494 178 103 103 1,668 269 2,469 2.2 Feasibility / Probable 95 230 346 200 100 80 956 60 1,111 1.0 Feasibility / Possible 45 50 85 175 115 0 425 0 470 0.4 Minerals Iron & Industrial Iron Prefeasibility / Possible 0 0 0 0 0 0 0 0 0 - Amount 673 1,069 925 553 318 183 3,049 329 4,050 3.6 Source: Cochilco, based on published reports and own estimates. Although 44.2 percent of the portfolio is expected to materialize in 2013-‐2017, projects classed as Possible are subject to greater uncertainty. This segment includes new entrants who have yet to complete a feasibility study and others who have not secured a permit to start construction prior to 2017. Possible gold mining projects account for ¾ of planned investment and 15 percent of the portfolio. Projects in the prefeasibility stage are mainly copper projects not scheduled to come on stream before the end of the and decade therefore subject change to . 8 Chilean Copper Commission -‐ Research Department July 2013 3.3 Regional Distribution of Projected Mining Investment TABLE 7: REGIONAL DISTRIBUTION OF PROJECTED MINING INVESTMENT (US$ Mn) Subtotal REGION Prior to 2013 2013 2014 2015 2016 2017 After 2017 Share 2013-2017 TOTAL TARAPACÁ 547 224 474 1,103 2,003 3,203 7,008 5,569 13,123 11.7 ANTOFAGASTA 6,412 5,397 7,762 6,762 7,000 4,949 31,870 4,378 42,659 37.9 ATACAMA 6,406 2,354 2,409 4,165 5,820 6,071 20,818 6,940 34,164 30.4 COQUIMBO 198 167 116 110 410 519 1,322 6,300 7,820 6.9 VALPARAÍSO 317 283 407 936 1,149 1,814 4,588 3,560 8,465 7.5 SANTIAGO 0 224 251 143 122 148 889 0 889 0.8 O'HIGGINS 573 934 1,437 1,137 745 554 4,805 57 5,435 4.8 Country Total 14,452 9,583 12,855 14,355 17,249 17,259 71,301 26,803 112,556 100.0 Source: Cochilco, based on published reports and own estimates. Northern Chile, led by Antofagasta, is the focus of most . investment Gold and iron projects in Atacama are also major . players 3.4 Projected Mining Investment Distribution by Country of Origin TABLE 8: INVESTMENT DISTRIBUTION BY COUNTRY OF ORIGIN AND OWNERSHIP 8769&2$ +600*) M6-.$N$",-O*) <)6&$N$<&.9:2),(-$%,&*)(-: +69&2)L !"#$%& "'()* !"#$%& "'()* !"#$%& "'()* !"#$%& "'()* +',-* !"#!"$ %!&' %'#'(( %)&% "') (&$ $#!$* $&$ +(&(.($ )(#+"+ $+&) *#!'' '&! $(#!(! "'&$ ,$) (&, /(0(&$ ""#("+ *&' "(#,*( *&! ( (&( )$' (&) "1,23*)-(&.$ %#%,( %&( %#%,( %&( ( (&( ( (&( !&,2*.$4,&5.67$ %#$$' )&' %#$$' )&' ( (&( ( (&( 89:2)(-,( %#("+ )&, )#+"+ )&) )(( (&) ( (&( !&,2*.$"2(2*:$ $#*)( $&, $#!!( $&) ( (&( )'( (&) ;6-(&.$ $#"%! "&* $#"%! "&* ( (&( ( (&( ;*)9$ '(( (&+ ( (&( '(( (&+ ( (&( 46)*($ !%( (&! !%( (&! ( (&( ( (&( <&.,( "(( (&" ( (&( ( (&( "(( (&" +',&( *( (&" ( (&( ( (&( *( (&" =>=8? @@ABCCD @EEFE GDBH@G HHFE A@BHGG @IFJ JBECE KFD Source: Cochilco. Overall, 46.4 percent of investment comes from Codelco, Antofagasta Minerals and other Chilean majors. With a conspicuous focus on gold, Canada comes . second Japan stands third with a wholly-‐owned operation (Caserones) and a minority stake i n several companies. 3.5 Portfolio Comparison, 2012-‐2013 The investment portfolio to June 2013 includes 49 initiatives worth US$112.5 billion, a US$8.25 billion increase from 47 projects and US$104.3 billion reported in June 2012.6 Changes in project value and composition are as follows: (a) Five projects worth US$1.7 we billion re omitted due to -‐ start up. (b) The US$963-‐million San Antonio Oxides project was canceled. Codelco is reviewing other options to ensure continuity its of Salvador Division. 6 See Inversión en la Minería -‐ Chilena Cartera de Proyectos 2012 -‐ DE/04/2012. 9 Chilean Copper Commission -‐ Research Department July 2013 (c) Five copper, two gold and projects two iron worth US $3.6 billion were added. (d) The estimated value of investment stays consistent at US$ 20.2 billion or ten projects. (e) Seven projects revised investment amounts by US$3.09 billion to US$19.7 billion. Time frames remained unchanged. (f) Eight projects will be delayed from one to three years although investment remains unchanged at US$30.6 billion. Further changes are likely. (g) The cost and time frame of 13 projects re we redefined. Costs increased a net US$3.92 billion to US$32.32 billion while start -‐up will be delayed one from to two years or more . (h) Codelco investment in miscellaneous research and development projects increased US$340 million . Where no official announcement exists (Cerro Casale, Collahuasi Phase III, Inca de , Oro Relincho), start-‐up is estimated based available on information and the methodology on Annex A(5). TABLE 9: CHANGES IN PORTFOLIO, 2012-‐2013 Outlays to Outlays to July Difference Start-up 2012 Start-up 2013 Region Project Name June 2012 2013 (US$ Mn) (US$ Mn) (US$ Mn) 5 NOW ON STREAM 1,744 --- -1,744 2012 2012 Antofagasta ESCONDIDA CRUSHER RELOCATION 554 --- -554 2012 2012 Antofagasta LOMAS BAYAS II EXTENSION 293 --- -293 2012 2012 Atacama MINA CARMEN 70 --- -70 2013 2012 Antofagasta KCl PRODUCTION UPGRADE 527 --- -527 2013 2013 Tarapacá COLLAHUASI EXPANSION PHASE II (*) 300 --- -300 1 CANCELED 963 --- -963 2015 --- Atacama SAN ANTONIO OXIDES 963 --- -963 9 NEW --- 3,603 3,603 --- 2014 Atacama OSO NEGRO --- 90 90 --- 2014 Coquimbo ROMERAL PHASE V --- 196 196 --- 2015 Atacama LA COIPA PHASE 7 --- 200 200 --- 2015 Antofagasta ESPERANZA UPGRADE --- 550 550 --- 2015 O'Higgins VALLE CENTRAL EXPANSION --- 152 152 --- 2016 Antofagasta ENCUENTRO OXIDES --- 600 600 --- 2017 Atacama CERRO MARICUNGA --- 515 515 --- 2018 Antofagasta TOVAKU --- 600 600 --- 2018 Atacama PRODUCTORA --- 700 700 10 UNCHANGED 20,212 20,212 0 2013 2013 Atacama CASERONES 3,000 3,000 0 2014 2014 Antofagasta COYA SUR POTASSIUM NITRATE PLANT 250 250 0 2014 2014 Antofagasta ESCONDIDA NEW OXIDE HEAP LEACH 721 721 0 2014 2014 Tarapacá PAMPA HERMOSA 1,033 1,033 0 2015 2015 Antofagasta SIERRA GORDA 3,900 3,900 0 2015 2015 Antofagasta PAMPA BLANCA UPGRADE 665 665 0 2015 2015 Atacama BELLAVISTA 143 143 0 2017 2017 Antofagasta LOMAS BAYAS III SULFIDES 1,600 1,600 0 2018 2018 Antofagasta EL ABRA MILL PROJECT 5,000 5,000 0 2018 2018 Atacama EL MORRO 3,900 3,900 0 7 CHANGING IN COST ONLY 16,701 19,795 3,094 2013 2013 Antofagasta MINISTRO HALES MINE 2,513 3,435 922 2015 2015 Antofagasta ESCONDIDA OGP I 3,800 3,838 38 2015 2015 Atacama DIEGO DE ALMAGRO (**) 227 597 370 2017 2017 Antofagasta ESPERANZA SUR (Ex TELÉGRAFO) 2,700 3,500 800 2017 2017 O'Higgins NEW MINE LEVEL 3,095 3,505 410 2018 2018 Valparaíso PIT-PLANT TRANSFER 1,066 1,420 354 2020 2020 Antofagasta ENCUENTRO SULFIDES (Ex CARACOLES) 3,300 3,500 200 8 DELAYED 30,690 30,690 0 2013 2015 Atacama NUEVA ESPERANZA - ARQUEROS 300 300 0 2014 2017 Atacama INCA DE ORO 600 600 0 2015 2017 Atacama LOBO - MARTE 800 800 0 2016 2019 Tarapacá QUEBRADA BLANCA HYPOGENIC 5,590 5,590 0 2018 2019 Tarapacá COLLAHUASI EXPANSION PHASE III 6,500 6,500 0 2018 2019 Atacama RELINCHO 3,900 3,900 0 2018 2020 Atacama CERRO CASALE 6,000 6,000 0 2019 2021 Coquimbo LOS PELAMBRES II EXPANSION 7,000 7,000 0 13 REDEFINED IN COST AND TIME FRAME 28,403 32,329 3,926 2013 2014 Atacama CERRO NEGRO NORTE 798 880 82 2013 2014 Atacama LOS COLORADOS EXPANSION 364 413 49 2014 2015 Atacama JERÓNIMO 300 423 123 2014 2015 Antofagasta ANTUCOYA 1,700 1,900 200 2013 2016 Atacama PASCUA 3,000 4,250 1,250 2015 2016 Atacama CERRO BLANCO 191 380 189 2016 2017 Atacama VOLCÁN 750 800 50 2016 2017 Atacama CASPICHE 4,800 4,600 -200 2016 2017 Coquimbo EL ESPINO 600 624 24 2016 2017 Atacama SANTO DOMINGO 1,242 1,800 558 2016 2018 Antofagasta RT SULFIDES PHASE II 4,482 5,430 948 2019 2018 Antofagasta CHUQUICAMATA UNDERGROUND 3,735 4,080 345 2019 2021 Valparaíso NUEVA ANDINA PHASE II 6,441 6,749 308 OTHER CODELCO INVESTMENTS 5,587 5,927 340 2012-2016 2013-2017 Various OTHER PROJECTS 3,877 4,370 493 2012-2016 2013-2017 Various INFORMATION PROJECT 1,710 1,557 -153 TOTAL (US$ Mn) 104,300 112,556 8,256 (*) Startup in Q1 2013. (**) SX-‐EW and concentrate merged into a single project. Source: Cochilco. 10 Chilean Copper Commission -‐ Research Department July 2013 IV. Projected Copper Production to 2021 By expanding Chilean production capacity, particularly in copper, the investment process underway will help sustain an increased supply to consumer countries. This chapter estimates maximum copper production capacity by 2021 from operations both existing and planned. 4.1 Mined Copper Production Capacity Through 2021 Mined copper production capacity includes concentrate and SX-‐EW cathode production. The methodology is shown Annex in A(5). Maximum mined copper production capacity is shown in Table 10. Details by producer are shown in Annex G. The table shows maximum production capacity in 2012 and information for 2013 to 2021 by operation and project status, based on data reported to Cochilco. Annual changes in total maximum production capacity are also shown. TABLE 10: MAXIMUM MINED COPPER PRODUCTION CAPACITY THROUGH 2021 (kMTF) !"#"$%&'&()*+,",)* 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 -./0#",*1&'&2#%/3,*/ 5,992 6,179 6,062 5,629 5,293 5,039 4,854 4,719 4,398 3,927 4*&50)10/%%&'&2#%/3,*/ 0 17 372 495 618 627 590 559 602 669 Total Mined 6/#%,7,3,"8&'&50)7#73/ 0 0 4 272 483 1,054 1,158 1,484 1,617 1,791 (kMTF) 6/#%,7,3,"8&'&5)%%,73/ 0 0 0 16 27 52 343 515 859 1,313 50/9/#%,7,3,"8&'&5)%%,73/ 0 0 0 0 0 0 57 85 258 378 :-:;<&=4>?@ 5,992 6,195 6,438 6,412 6,421 6,772 7,001 7,362 7,734 8,078 ! " #$%& #$'& "($%& ($)& *$*& #$%& *$+& *$)& %$%& !"#"$%&'&()*+,",)* 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 -./0#",*1&'&2#%/3,*/ 3,690 4,011 4,020 3,740 3,442 3,248 3,129 3,071 2,894 2,723 4*&50)10/%%&'&2#%/3,*/ 0 14 346 429 508 536 493 485 518 522 Total 6/#%,7,3,"8&'&50)7#73/ 0 0 4 272 458 1,019 1,108 1,434 1,567 1,741 Concentrate 6/#%,7,3,"8&'&5)%%,73/ 0 0 0 11 16 41 328 499 841 1,306 (kMTF) 50/9/#%,7,3,"8&'&5)%%,73/ 0 0 0 0 0 0 57 85 258 378 :-:;<&(->(?>:A;:? 3,690 4,025 4,370 4,452 4,424 4,844 5,114 5,573 6,079 6,670 ! " '$)& ,$-& )$'& "($-& '$*& *$-& '$(& '$)& '$.& !"#"$%&'&()*+,",)* 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 -./0#",*1&'&2#%/3,*/ 2,302 2,168 2,042 1,889 1,852 1,790 1,725 1,649 1,504 1,205 4*&50)10/%%&'&2#%/3,*/ 0 3 26 66 110 92 97 74 84 146 Total SX-EW 6/#%,7,3,"8&'&50)7#73/ 0 0 0 0 25 35 50 50 50 50 Cathodes 6/#%,7,3,"8&'&5)%%,73/ 0 0 0 5 11 11 15 16 18 7 (kMTF) 50/9/#%,7,3,"8&'&5)%%,73/ 0 0 0 0 0 0 0 0 0 0 :-:;<&!BC?D 2,302 2,170 2,069 1,960 1,997 1,928 1,887 1,789 1,655 1,408 ! " "*$.& "%$.& "*$+& )$'& "#$*& "+$)& "*$+& ".$*& ")%$'& Source: Cochilco. 11 Chilean Copper Commission -‐ Research Department July 2013 4.2 Regional Distribution of Mined Copper Production Capacity The impact of the investment process underway on production capacity across the various mining regions of Chile is also important. The tables below show projected maximum mined copper production capacity by region and type (concentrate and SX-‐EW cathodes). TABLE 11: REGIONAL DISTRIBUTION OF MINED COPPER PRODUCTION CAPACITY THROUGH 2021 (kMTF) Region Status 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Operations 0 0 0 0 0 0 0 0 0 0 XV. Arica & Projects 0 0 0 0 0 0 0 0 0 0 Parinacota Subtotal 0 0 0 0 0 0 0 0 0 0 Operations 538 701 736 783 732 681 655 650 618 544 I. Tarapacá Projects 0 0 0 0 0 0 0 114 316 445 Subtotal 538 701 736 783 732 681 655 763 934 989 Operations 3,297 3,186 3,078 2,780 2,509 2,404 2,366 2,278 2,029 1,765 II. Antofagasta Projects 0 14 292 622 884 1,393 1,488 1,689 1,818 2,180 Subtotal 3,297 3,200 3,370 3,401 3,394 3,796 3,854 3,967 3,847 3,945 Operations 409 427 412 357 348 340 318 309 287 237 III. Atacama Projects 0 3 81 136 190 222 484 600 937 964 Subtotal 409 429 493 493 538 562 802 909 1,223 1,201 Operations 561 577 569 531 533 532 532 532 533 529 IV. Coquimbo Projects 0 0 0 0 0 19 32 42 44 91 Subtotal 561 577 569 531 533 551 565 574 577 620 Operations 356 327 330 306 310 313 260 270 270 261 V. Valparaíso Projects 0 0 0 0 0 0 0 0 0 211 Subtotal 356 327 330 306 310 313 260 270 270 472 Operations 380 491 466 445 445 420 420 420 420 382 Santiago Projects 0 0 0 0 0 0 0 0 0 0 Subtotal 380 491 466 445 445 420 420 420 420 382 Operations 450 470 470 427 416 348 303 261 242 209 VI. O'Higgins Projects 0 0 4 26 54 100 143 198 221 260 Subtotal 450 470 474 453 470 448 446 459 463 469 Operations 5,992 6,179 6,062 5,629 5,293 5,039 4,854 4,719 4,398 3,927 Country Total Projects 0 17 376 783 1,128 1,733 2,147 2,643 3,336 4,151 TOTAL 5,992 6,195 6,438 6,412 6,421 6,772 7,001 7,362 7,734 8,078 Source: Cochilco. TABLE 12: REGIONAL DISTRIBUTION OF COPPER CONCENTRATE PRODUCTION CAPACITY THROUGH 2021 (kMTF) Region Status 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Operations 0 0 0 0 0 0 0 0 0 0 XV. Arica & Projects 0 0 0 0 0 0 0 0 0 0 Parinacota Subtotal 0 0 0 0 0 0 0 0 0 0 Operations 304 478 539 569 520 514 490 490 465 465 I. Tarapacá Projects 0 0 0 0 0 0 0 114 316 445 Subtotal 304 478 539 569 520 514 490 603 781 910 Operations 1,469 1,470 1,454 1,273 1,040 951 965 945 836 762 II. Antofagasta Projects 0 14 268 559 756 1,295 1,375 1,589 1,719 2,013 Subtotal 1,469 1,484 1,723 1,832 1,796 2,245 2,340 2,535 2,555 2,776 Operations 270 295 280 249 240 231 220 214 190 169 III. Atacama Projects 0 0 78 128 172 182 439 564 892 934 Subtotal 270 295 358 377 412 414 660 779 1,082 1,103 Operations 536 551 548 514 514 514 514 514 514 514 IV. Coquimbo Projects 0 0 0 0 0 19 28 37 37 84 Subtotal 536 551 548 514 514 533 542 552 552 598 Operations 333 308 314 294 298 301 248 258 258 249 V. Valparaíso Projects 0 0 0 0 0 0 0 0 0 211 Subtotal 333 308 314 294 298 301 248 258 258 460 Operations 330 441 416 416 416 392 392 392 392 357 Santiago Projects 0 0 0 0 0 0 0 0 0 0 Subtotal 330 441 416 416 416 392 392 392 392 357 Operations 448 468 468 424 413 345 300 258 239 206 VI. O'Higgins Projects 0 0 4 26 54 100 143 198 221 260 Subtotal 448 468 472 450 467 445 443 456 460 466 Operations 3,690 4,011 4,020 3,740 3,442 3,248 3,129 3,071 2,894 2,723 Country Total Projects 0 14 350 712 982 1,596 1,985 2,502 3,185 3,948 TOTAL 3,690 4,025 4,370 4,452 4,424 4,844 5,114 5,573 6,079 6,670 Source: Cochilco. 12 Chilean Copper Commission -‐ Research Department July 2013 TABLE 13: REGIONAL DISTRIBUTION OF SX -‐EW CATHODE PRODUCTION CAPACITY THROUGH 2021 (kMTF) Region Status 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Operations 0 0 0 0 0 0 0 0 0 0 XV. Arica & Projects 0 0 0 0 0 0 0 0 0 0 Parinacota Subtotal 0 0 0 0 0 0 0 0 0 0 Operations 235 223 197 214 212 167 165 160 153 79 I. Tarapacá Projects 0 0 0 0 0 0 0 0 0 0 Subtotal 235 223 197 214 212 167 165 160 153 79 Operations 1,828 1,716 1,624 1,506 1,470 1,453 1,401 1,332 1,192 1,003 II. Antofagasta Projects 0 0 23 63 128 98 113 100 100 166 Subtotal 1,828 1,716 1,647 1,569 1,598 1,551 1,514 1,432 1,292 1,169 Operations 139 132 132 108 107 109 97 95 96 68 III. Atacama Projects 0 3 3 8 18 39 45 35 45 30 Subtotal 139 135 135 116 125 148 142 130 141 98 Operations 25 26 21 17 19 18 18 18 19 15 IV. Coquimbo Projects 0 0 0 0 0 0 4 5 7 7 Subtotal 25 26 21 17 19 18 22 23 26 22 Operations 23 18 16 12 12 12 12 12 12 12 V. Valparaíso Projects 0 0 0 0 0 0 0 0 0 0 Subtotal 23 18 16 12 12 12 12 12 12 12 Operations 50 50 50 29 29 29 29 29 29 25 Santiago Projects 0 0 0 0 0 0 0 0 0 0 Subtotal 50 50 50 29 29 29 29 29 29 25 Operations 2 2 2 3 3 3 3 3 3 3 VI. O'Higgins Projects 0 0 0 0 0 0 0 0 0 0 Subtotal 2 2 2 3 3 3 3 3 3 3 Operations 2,302 2,168 2,042 1,889 1,852 1,790 1,725 1,649 1,504 1,205 Country Total Projects 0 3 26 71 146 137 162 140 152 203 TOTAL 2,302 2,170 2,069 1,960 1,997 1,928 1,887 1,789 1,655 1,408 Source: Cochilco. 4.3 Estimate Review By helping offset depletion, s investment reviewed here have a strong impact on overall copper production in Chile. Extent and use of maximum production capacities have a long-‐term impact on mining and related activities , especially the supply of goods and services, an endeavor of strong local relevance . While actual production expected in the next few years will not necessarily use the full installed capacity, maximum production profiles are a valuable tool for estimating demand for related , goods services and human resources across regions and nationwide. The charts below shows the expected behavior of both concentrate and hydrometallurgical operations and projects. CHART 1 CHART 2 -./01"2345678"9:67;<=6>"23?3<@4A"BCDEF"" -.//01"-.230241540"61.7839.2"-5/53:4;"<=>?"@"" *$!!!" *$!!!" )$!!!" )$!!!" ($!!!" ($!!!" '$!!!" '$!!!" &$!!!" &$!!!" %$!!!" %$!!!" #$!!!" #$!!!" !" !" %!#%" %!#&" %!#'" %!#(" %!#)" %!#*" %!#+" %!#," %!%!" %!%#" %!#%" %!#&" %!#'" %!#(" %!#)" %!#*" %!#+" %!#," %!%!" %!%#" A/0159.2B" 61.C034B" G?8:3=6>H" 9:6I8<4H" Source: Cochilco. 13 Chilean Copper Commission -‐ Research Department July 2013 4.3.1 National Forecast Chilean mined copper production should rise to a maximum of 2 8. million tons refined copper in the next decade, a 36.8 percent increase over the nearly 5.5 million tons estimated for 2012.7 The annual rate of growth for the period 3 would be .2 percent. By 2022, depletion and end of mine life will cut output from existing operations, not considering new investment amounts some of them will require, to 3.64 million tons refined copper, 2.35 million tons less than the baseline year 2012 ( ). Therein lies the importance of materializing projected investment plans, as these would add 4.55 million TPY or 56 percent of maximum production capacity estimated for 2022. Planned developments rely mainly on increasing concentrate capacity from 3.7 million tons in 2012 to 6.9 million tons in 2022, for an annual rate of growth 6.4 percent. With that, concentrate output as a share of mined copper production w ould expand from 62 percent in 2012 to 84 percent in 2022. Hydrometallurgical copper is expected to slide from over 2 million tons SX-‐EW cathodes in recent years to some 1.9 million tons through 2018 and 1.32 million by 2022. Causes include a declining number of hydrometallurgical projects, depletion of leachable ores and closure of major operations, notably Codelco’s Salvador, Mina , Sur and Radomiro Tomic Oxides, as well as Quebrada Blanca and other private operations. That said, Codelco and other players may yet move to prolong the lifespan of some operations while others may shift to mining underlying primary sulfides. 4.3.2 Maximum Production Capacity By Likelihood While the above capacity is estimated based on all projects materializing as stated, mining projects are inherently subject to change. As such, maximum production capacity profiles are classed per the criteria in Annex A(2) in a manner similar to the corresponding investment profiles. Table 10 shows that maximum production remains subject to internal and external contingencies. The baseline profile, consisting of existing operations and projects in progress, should stand at 4.6 million tons refined copper by 2021. This is equivalent to only 77 percent of maximum production capacity in 2012 and to 57 percent of estimates for 2021, which explains the critical nature of the less advanced projects reviewed below. The probable profile, which includes projects in the feasibility study stage by companies with existing operations in Chile and slated for start-‐up no later than 2017, should add an additional 1.8 million tons, 390,000 tons above the current maximum production . capacity The largest quantitative increase should come from possible projects, which includes those in the preliminary feasibility study stage and new entrant projects with feasibility study underway. These would add a combined 1.7 million tons or 21 percent of total maximum capacity expected in 2021. 7 Production stood at 3.40 million tons concentrate and 2.03 million tons SX-‐EW cathodes, for a total of 5.43 million tons. 14 Chilean Copper Commission -‐ Research Department July 2013 CHART 3 CHART 4 87539:;52"4<6<:=>?"@?"4<>0A57?"B%!#&C%!%#D" !"#$%&'())$*&+*(%,-.(#&'/)/-"01&21&'/0$3(*1&4567&!#&0(#8&"#&9:97;& ,$!!!" +$!!!" *$!!!" !"#$#%&'(')'*+,-, )$!!!" ;<#"%=78,-, !.&&'()#/,01, ($!!!" 9%&#)'7#/,>?1, '$!!!" 2#%&'(')'*+,-, !.&&'()#/,341, &$!!!" %$!!!" -."/01203"456607" #$!!!" !" %!#%" %!#&" %!#'" %!#(" %!#)" %!#*" %!#+" %!#," %!%!" %!%#" %!%%" 2#%&'(')'*+,-, E607<;2A"F"G Source: Cochilco. 4.3.3 Regional Forecast While Chile’s overall copper production capacity is expected to expand 34.8 percent from 2012 to 2021, growth will not be equally distributed mining across districts . In Atacama, refined copper production capacity should jump 194 percent from 409,000 tons in 2012 to 1.2 million tons in 2021 due mostly to the copper output of three major gold projects and four other medium-‐ and large-‐scale copper mines. These projects should significantly boost mining and related activities in the region . Production in Tarapacá should expand 96 percent to some 1 million tons by 2021, driven mostly by the Collahuasi Phase III Expansion and the new Quebrada Blanca undertaking. However, most projects in Atacama and Tarapacá remain classed as Possible and thus subject to change. As an established mining district, Antofagasta is expected to retain the lead. While maximum capacity should rise 19.6 percent to about 3.95 million tons refined copper, projects are either in progress or have feasibility studies well underway. As some major operations, including RT Oxides, Chuquicamata Open Pit and Mina Sur, are being wound down, most projects new are designed recoup to capacity . The Andina expansion in Valparaíso is expected to increase output by 32.5 percent in the period. The single-‐largest project in O’Higgins is the new El Teniente mine level, also designed to recover production capacity. 4.4 Maximum Concentrate Processing Capacity As the roster shows, most projects are designed to increase copper concentrate production. With grades declining across the , board new plants are being designed to handle larger a throughput. As plant requirements are driven by throughput rather than output, larger, more expensive processing facilities, increased ore and overburden extraction and additional milling and flotation work translate into higher consumption of fuel s, power , water and other key inputs . Shown below is annual concentrating plant throughput from existing and new operations coming on stream. 15 Chilean Copper Commission -‐ Research Department July 2013 CHART 5 COPPER CONCENTRATING PLANT THROUGHPUT THROUGH 2021 MILLION ( TPY) '($!!" '(#!!" '(!!!" &!!" %!!" $!!" #!!" !" #!'#" #!')" #!'$" #!'*" #!'%" #!'+" #!'&" #!'," #!#!" #!#'" -./012345" 6-46/42012/".0-7/628" Source: Cochilco. In the coming scenario, plant throughput and refined copper content do not correlate well. As shown below, throughput expansion of 11.5 percent a year in -‐2012 2021 will result in annual copper content growing only 6 .1 percent in the same . period CHART 6 CONCENTRATING PLANT THROUGHPUT AND COPPER CONTENT THROUGH 2021 ( MILLION TPY) '$)!" '($!!" '#)!" '(#!!" '!)!" '(!!!" &)!" &!!" %)!" %!!" $)!" $!!" #)!" #!!" !)!" !" #!'#" #!'*" #!'$" #!'+" #!'%" #!'," #!'&" #!'-" #!#!" #!#'" ./0)"123345"12674685/84"952:;7<26"1/3/7=8>"?.@A" 12674685/<6B"9C/68"1/3/7=8>"?.@A" Source: Cochilco. 16 Chilean Copper Commission -‐ Research Department July 2013 V. Estimated Production of Other Minerals This chapter reviews the contribution of the 2013 project portfolio to maximum gold, silver, molybdenum, iron and industrial mineral production capacity . Shown or f gold and iron is current maximum production capacity and the potential scenario in 2021 based on project data. Shown for silver and molybdenum, which are largely dependent on copper and gold output, are estimated maximum production for each project and possible capacity contribution once fully operational. Shown or f industrial minerals is the contribution of each project reviewed. 5.1 Gold and Silver TABLE 14: MAXIMUM GOLD AND SILVER PRODUCTION CAPACITY CONTRIBUTION M)NO%H0"$L=1-"J%=)HO H0"I/=1 H0-J=-H)# ,1)01KLH !"#$%%%%%%%%%% ,-#./0%%%%%%%% &'(%)*+ &1234+ !2EA%&H@BPD@G%H@2A*FCB23%0?>EDF?P?3C+ !"#$%&'( )*+,-."-/,-0,/.,-12)2 3456 78944 ::: ;,-<(&=,->?,@"-9 <('=,AB,-C&%"#,-C,%D(@-."-E#( 3456 F8334 ::: !2EA%&)AABCB23DE%H@BPD@G%H@2A*FCB23+ G+"H,-I@="#,%J,-:-)#K+"#(@ ;,*+%,-L"@(+#M"@-,@M+, Source: Cochilco. Increases in gold production come from primary production or from production secondary to copper mining. By 2021, these projects are expected to increase maximum production capacity to 178 tons, up 256 percent over the 49.9 tons reported in 2012. At present, primary gold production contributes some 30,000 kg/yr. while production secondary to copper mining contributes an additional 19,870 kg/yr. Future contributions from both sources are estimated at 145,600 and 39,800 kg, respectively, both from existing operations and new projects coming on stream. Silver projects in this report should contribute some 1,526 TPY to maximum production capacity. Sources when fully operational 2021 in are gold mining (1,226 TPY) and copper mining (300 TPY). 17 Chilean Copper Commission -‐ Research Department July 2013 5.2 Molybdenum Most molybdenum produced in Chile is a byproduct of copper mining. Major copper concentrate projects in the portfolio (Caserones, Sierra Gorda, Esperanza Upgrade, Quebrada Blanca Phase II, Relincho)8 contemplate producing 36.7 kTPY molybdenum concentrate. These contributions should place the refined molybdenum production capacity at about 74 kTPY by 2021. TABLE 15: MAXIMUM MOLYBDENUM PRODUCTION CAPACITY BY PROJECT (TPY) MAX. PRODUCTION CAP. PROJECT PRINCIPAL START-‐UP MOLYBDENUM ( TPY) Copper ( Secondary Production – New Capacity) Caserones Pan Pacific Copper 2013 3,000 Sierra Gorda KGHM International 2015 11,000 Esperanza Upgrade Minera Esperanza 2015 11,500 Quebrada Blanca Phase II Teck 2017 5,200 Relincho Teck 2018 6,000 Total 36,700 Copper ( Secondary Production – Maintain Capacity) Sulfides Phase II Radomiro Tomic Division 2018 7,000 Chuquicamata Underground Chuquicamata Division 2018 18,000 Total 25,000 Source: Cochilco. The Chuquicamata Underground and RT Sulfides Phase II projects should help keep the contribution to maximum production capacity of Codelco’s Chuquicamata and Radomiro Tomic Divisions stable at about 25 kTPY molybdenum concentrate. 5.3 Iron Production in 2012 stood at 17.33 million tons iron ore or some 10.2 million tons refined iron. The project portfolio and associated output is expected to increase maximum production capacity by 111 percent to 37 million tons in 2021. At implementation, rojects p by iron concentrate, screening and pellet feed producers CAP, Minera San Fierro and Santa Fe Mining, plus secondary production from the Santo Domingo copper project (Capstone), were expected to contribute some 20.1 million tons iron ores or 11.9 million tons refined iron,9 as noted in Table 16. 8 Collahuasi, Los Pelambres and Valle Central expansions not considered due to insufficient information. 9 Iron products contain from 58% to 65% Fe. 18 Chilean Copper Commission -‐ Research Department July 2013 TABLE 16: EXPECTED IRON PRODUCTION BY PROJECT (TPY) MAX. PRODUCTION CAP. PROJECT PRINCIPAL START-‐UP Refined Content Iron Ores (kTPA) (kTPA) Iron Cerro Negro Norte CAP 2014 4,000 2,360 Los Colorados Expansion CAP 2014 5,800 3,420 Romeral Phase V CAP 2014 2,500 1,475 Oso Negro Minera San Fierro 2014 1,091 600 Bellavista Santa Fe Mining 2015 2,500 1,620 Copper Santo Domingo Capstone Mining 2017 4,200 2,478 Total 20,091 11,953 Source: Cochilco. The net result will boost Chilean production capacity to 31 million tons iron ores or better than 19 million tons refined iron content in the second half of this . decade 5.4 Industrial Minerals Nitrate investment projects undertaken by SQM are expected to progressively increase annual production capacity by 2.5 million tons nitrate, 11,000 tons iodine and 1.55 million tons potassium chloride. In addition, White Mountain Titanium’s Cerro Blanco project will produce some 200 kTPY titanium dioxide concentrate ( 95% TiO2) with production of some 1.5 million TPY feldspar10 starting in 2016. 10 Chilean feldspar production is a modest 8 kTPY. 19 Chilean Copper Commission -‐ Research Department July 2013 VI. Concluding Remarks The overall investment portfolio includes 49 initiatives worth an overall US$112.6 billion. Leading the field is the copper industry mining , with 30 initiatives worth US$86.7 billion. Highlights include: The Codelco investment plan focuses on six structural projects (Ministro Hales Mine, Radomiro Tomic Sulfides Phase II, El Teniente New Mine , Level Andina Phase II, Andina Pit-‐Plant Transfer) designed to ensure long-‐term sustainability. Codelco has two additional investment lines covering a range of projects smaller . Large private miners (Escondida, Los Pelambres, Collahuasi) hold reserves that stand among Chile’s and the world’s largest. They are currently expanding operations in order to raise productivity and prolong mine lifespan. A distinctive element are copper concentrating projects taking over from fast-‐depleting leachable surface ore operations (RT Sulfides, QB Hypogenic, El Abra Mill, Lomas Bayas Sulfides). The result will a increase net in copper production capacity. New entrants reflect sustained interest in joining one of world’s the leading mining districts. Second in line with ten projects and 19.4 percent of overall investment is gold mining. Highlights include: Three large-‐scale projects (Caspiche, Cerro Casale, El Morro) will also produce copper, while two replacement projects will be instilling new life into major gold mining operations. The binational Pascua-‐Lama project is being required to ensure its activities are compatible with the law, after which construction could resume. Atacama is the second-‐largest investment destination, most of it going to gold mining. The portfolio also includes five iron, four nitrate and one titanium dioxide mining project, all at widely varying stages of development. As is often the case in the industry, projects in progress are considered highly certain while those under review are noted for varying degrees of uncertainty. As development moves forward, projects undergo changes that tend to impact expected production capacity, investment amounts, and frames. time Such ariability v is reflected in this update to the mining project portfolio. This report shows a US$8.2 billion increase in value. This is the result of a US$7.36 billion upward revision of 22 projects plus a net US$900 million gain caused by the entry of nine new projects -‐ and the start up or cancellation of seven other projects in 2012. In addition, some project schedules underwent changes -‐ ranging from a one year acceleration to a two-‐year delay. Overall, -‐ shorter term investments declined and more were shifted to beyond 2015. Additions to production capacity were also impacted as a result. Refined copper production capacity in 2021 should stand at 8.1 million tons, rising to 8.4 million once all projects start to operate at capacity. 20 Chilean Copper Commission -‐ Research Department July 2013 Most of the increase will come from concentrate production, which should rise from 3.7 million tons in 2012 to 6.8 million in 2021. By contrast, SX-‐EW cathode production should decline from 2.3 million tons in 2012 to 1.4 million in 2021. One effect of increased concentrating capacity will be a sharper rise in ore volume fed to concentrating plants. Due to persistent declines in copper grades, throughput is expected to rise upwards of 180 percent, from 450 million TPY in 2012 to 1.2 billion TPY in 2021, with concentrate production capacity rising 86 percent from 3.7 to 6.8 million TPY in the same period. As a result, plants are being redesigned on a larger scale, resulting in added costs and requiring more energy, water and other inputs to produce a similar amount of copper, with the attendant impact on demand for these goods and services. Increased productivity is one of the new challenges facing Chilean mining industry it as seeks to remain competitive. 21 Chilean Copper Commission -‐ Research Department July 2013 Annex A -‐ Methodology 1. Scope This report covers investment in replacement, expansion or new copper, gold mining, iron and industrial minerals projects by Codelco and medium-‐ and large-‐scale private miners. It considers projects worth upwards of US$100 million either in progress or likely in to materialize 2013-‐2017. The “Prior to 2013” category refers to project outlays (i.e., studies, construction) made through 2012, followed by estimated outlays through 2013-‐2017. Projects scheduled for start-‐up beyond 2017 are identified as . such Project particulars are complemented by estimations on copper output added, if any, plus notes on current status. Information is provided on -‐ a best guess basis, based on data current at the time of writing. Where no such data is available, annual investment allocations are estimates not necessarily supported in . sources 2. Project Type , S tage of Development and Likelihood Investment information is qualified by project type and stage of development. Projects are ranked from most to least likely. 2.1 Project Type This classification provides information on project likelihood, which varies for existing and new operations. Categories are as : follows a) Replacement: Includes brownfield projects designed to prolong the life of the mine and maintain existing production by addressing declining grades and/or depletion . issues b) Expansion: Includes brownfield projects designed to increase operating capacity, scale up production and cut unit costs, notably as ore grades start to decline. c) New: Includes greenfield projects requiring environmental and other clearances, construction of facilities and opening up a new site. Also includes brownfield projects involving a complete change from one mode of production to another (i.e., leaching to concentrating), which often requires developing n a entirely new deposit . 2.2 Stage of Development Based on the assumption that projects in a more advanced stage of development are often more likely to materialize, these are classed follows as : a) In Progress: Investment approved and permits secured. Detail engineering and construction underway. b) Feasibility Study Stage: Undergoing feasibility and environmental (EIA or DIA) review, investment decision not yet . made c) Prefeasibility Stage: Undergoing initial review; decision to proceed to next stage not yet made. 2.3 Likelihood Projects are ranked as Baseline, Probable or Possible based on type and stage of development. 22 Chilean Copper Commission -‐ Research Department July 2013 a) Baseline: In progress. Deemed highly probable, although start-‐up may undergo delays. Production is added that to of existing operations. b) Deemed Probable: Includes easibility f -‐stage replacement, expansion or new projects by companies with operations in Chile, with start-‐up scheduled for 2013-‐2017. While subject to significant changes or delays, they are deemed certain as they prolong the lifespan of existing operations. c) Deemed Possible: Includes easibility f -‐stage projects by new entrants, replacement or expansion projects with start-‐up scheduled no earlier than 2018, and all prefeasibility-‐stage projects. Projects by new entrants often face hurdles that can cause significant changes and delays, or even cancellation. In the case of brownfield projects, a far-‐off start-‐up date often results in major revisions that can also significant cause changes and delays. 3. Codelco Investment Plans and Sources of Information Investment estimates11 are based on information presented in Codelco’s 2013 Business and Development Plan (PND 2013) for development and/or research projects . Development projects are directly connected to production prospects and approval requires compliance with certain return on investment standards. These include: a) Structural Projects: Selected development projects that fully leverage available mineral resources and provide a baseline for long-‐term growth. This report provides specifics and investment amounts. b) Other Development Projects: Included in he t Codelco investment portfolio are discrete or shorter-‐ term projects deemed complementary to structural projects and thus essential to company continuity. This report provides specifics and investment amounts. Codelco also implements research projects designed to acquire new information considered relevant to further development. While not listed as part of a specific investment project, these include prefeasibility, feasibility, and environmental assessment of prospective sites, basic and generative exploration, and R&D. Given their manifold nature, these projects are reported on the aggregate. While outlays on equipment replacement, facility , upgrades environmental cleanup, workplace safety, and employee benefits in the PND 2013 also require API approval, they are omitted in order to facilitate comparison with private firms which do not provide such information. Also omitted are investments not requiring API approval and thus outside the purview of this report. All information is gleaned public from reports provided by company officials or on the Codelco web site, complemented by data contained in the Codelco Business and Development Plan and other official reports submitted on a regular basis Investment to the Cochilco Evaluation & Enforcement and Compliance Department (DEIF). As such, the information herein should be construed as a strategic planning tool rather than as binding on the reviewing agencies. 4. Private Mining Investment and Sources of Information Sources include public reports and announcements culled from company web sites, the news media, trade publications, filings and to the environmental assessment system. 11 Spending by Codelco requires Investment Project Authorization (API), a review conducted jointly by Cochilco and the Ministry of Social Development. Disbursements considered as investments by Codelco (i.e., deferred expenses and the like) which require no authorization are not included. Inclusion in the 2013 PND does not imply authorization. 23 Chilean Copper Commission -‐ Research Department July 2013 Often only global amounts and intended -‐ start up year are known. In such cases, annual estimates are based on tentative completion time frames reported to the environmental assessment system or on empirical knowledge of like projects. The review includes all projects under construction. Projects under review were checked for progress and their investment, start-‐up schedule and estimated production profiles were updated based on the most recent information available. Changes noted included : a) New principals following changes in ownership. b) Production capacity and products of interest. c) Investment amount, start -‐up date and project schedules. d) Inclusion of new projects. e) Removal of recent -‐ start ups. f) New requirements, such as the use of seawater . While projects are assumed to reflect outlays made during the construction stage, prior outlays may be included. Where no precise information is available, -‐ start up year is estimated as shown below. 5. Estimating Start-‐up Dates Internal and external factors may impact project development. Some of the latter include the need to cut electricity cost s, modify environmental impact statements and/or secure construction permits . The former, for their part, often encompass project timing relative to corporate goals, securing financing, and the need to enhance investment and/or operating cost indicators. Where no public start-‐up date announcement exists , Cochilco uses the following methodology: a) A standard one-‐year delay is deemed if a project is impacted by external , factors even if these entail only minor changes to the feasibility study. b) A standard two-‐year delay is deemed if a project requires reformulating a prefeasibility or feasibility study. 6. Projected Mined Copper Production Capacity Maximum potential concentrate and/or SX-‐EW production capacity is the sum of maximum production profiles by existing mining operations and projects starting up within the , decade shown as tons of refined copper. Future profiles for existing operation are based on recent production performance and estimation of key parameters, including ore grades, concentrating plant capacity, and acid consumption by hydrometallurgical operations. Assumptions are based on maximum plant capacity operating nonstop 360 days a year, based on data reviewed by Cochilco . Project production profiles are based on company descriptions of maximum processing capacities under nonstop operation 360 days and a year key expected mining and metallurgical parameters . Tracking project rankings , production profiles are also classified from most to least . likely All figures are shown estimated as maximum potential capacity relative to 2012, based on the most recent data available as of this writing. 24 Chilean Copper Commission -‐ Research Department July 2013 Annex B -‐ Copper Mining I) STRUCTURAL CODELCO PROJECTS (www.codelco.cl) MINISTRO HALES MINE (Ministro Hales Division) Ministro Hales stands in Antofagasta, halfway between the Chuquicamata minesite and the city of Calama. It is a copper sulfide deposit holding reserves estimated at 289 million tons with 0.96 average copper grades and high silver content. The homonymous Codelco Division was set up to develop and operate this mine. Once in operation, the mine is expected to process up to 50 kTPD in a concentrating plant sited adjacent to the open pit. Processes handled include primary crushing, transport by conveyor belt, stockpiling, milling (one SAG mill and two ball mill s), and flotation. High arsenic levels will require fluidized bed roasting (up to 350 kTPY) -‐ yielding high grade concentrates (37% refined copper content) to produce some 183 kTPY refined copper and 300 TPY silver. Plant gases will be abated in a sulfuric acid plant. Due to their special characteristics, these concentrates may also be used as smelter feed or sold. Massive pre-‐stripping has created an opportunity to leverage a significant volume of leachable ores. As such, a complementary project now underway will convey ores to a heap leaching site, with the resulting solution fed to the Chuquicamata Division Hidrosur SX-‐EW Plant for an expected 79,000 tons refined copper in 2014-‐2016. This is a deep deposit and plans include moving to underground mining in future the . Workforce: 3,000 during construction; 450 during operation. Throughput: 50 kTPD sulfide ores. Est. Investment Amount: US$3.43 billion. Status: Under construction. Once concluded, dry (primary crusher, stockpile), wet (milling, flotation, tailings thickening) and roasting systems will be load-‐tested. Start-‐up slated for late 2013. 25 Chilean Copper Commission -‐ Research Department July 2013 RADOMIRO TOMIC SULFIDES PHASE II (Radomiro Tomic Division) Phase II involves mining sulfides emerging at Radomiro Tomic as overlying oxides d. become deplete Estimated reserves stand at 2.6 billion tons with 0.48 average copper grades. Plans are to continue mining the current open pit and process ores in a 200-‐kTPD concentrating plant slated to come on stream in late 2017. This will add an estimated 350 kTPY refined copper and 7 kTPY molybdenum concentrate. The project will extract and desalinate seawater at a 1,600 l/s reverse osmosis plant, then pump it 160 km to an altitude of 3,000 m. A conventional tailings dam will be through used 2021, then replaced by thickened tailings technology that will allow for optimized dam use and sizing, help reclaim more water, and reduce particulate emissions. This will require subsequent construction of a high-‐ density thickening plant. The Division also plans to leverage the available hydrometallurgical infrastructure to bioleach low-‐grade sulfides. Workforce: 12,100 during construction; 2, 200 during operation. Throughput: 200 kTPD sulfide ores. Est. Investment Amount: US$5.43 billion, including desalination and pumping infrastructure but not the thickening plant. Status: Finalizing feasibility and investment approval. Environmental, sector and construction permits secured in 2014, start-‐up expected in late 2017. NEW MINE LEVEL (Teniente Division) The project involves mining a new sector at altitude 1,880 m, 100 m below the current , mine level thereby adding an extra 2 million square meters of mining surface. Reserves stand at 2.02 billion tons with 0.86 average copper grades and 220 ppm molybdenum. Mining will be based on panel caving, with 100 percent of the area preconditioned with hydraulic fracturing. The mine level scheme will be characteristic El Teniente: sinking, production, ventilation, haulage, and crushing. Ores will be sent to the surface Colón concentrator by conveyor belt. 26 Chilean Copper Commission -‐ Research Department July 2013 The project will ensure the -‐ long term 137-‐kTPD divisional target and extend the life of mine for over 50 years after 201 7, while creating an option to throughput increase to 180 kTPD within decade a . The project calls for 98,450 m of horizontal tunnels and 3,454 m of vertical air shafts and transfer pits to be built in 2011-‐2017. Workforce: 3,500 in the construction stage. Throughput: 137 kTPD sulfide ores, up to 180 kTPD within a decade. Est. Investment Amount: US$3.5 billion. Status: In progress. Engineering and construction of the 16-‐km, two-‐way Maitenes-‐Confluencia road was awarded November in 2012. Gradual start-‐up expected in H2 2017. CHUQUICAMATA UNDERGROUND (Chuquicamata Division) Codelco is exploring reserves estimated at 1.65 billion tons with 0.71 copper grades deep under the existing Chuquicamata mine. Plans call for using block caving methods on four underground mining faces. Works to be built include a 7.5-‐km main access tunnel, five clean-‐air injection ramps and two air exhaust pits. Production would start at 2.7 kTPD, then climb up to a design capacity of 140 kTPD nine years later, eventually adding 366 kTPY refined copper and over 18 kTPY refined molybdenum. Start-‐up would coincide with the end of open pit economic life, with ores feeding existing concentrators. Workforce: 3,767 during construction; 4,837 during operation. Throughput: 140 kTPD sulfide ores. Est. Investment Amount: US$4.08 billion. Status: Finalizing feasibility study and building early works. Scheduled for 2013 are construction of main and ventilation tunnels and deepening the air exhaust shaft. Environmental Assessment Resolution (RCA) has been secured. Gradual production would start 2019. in 27 Chilean Copper Commission -‐ Research Department July 2013 NEW ANDINA: PHASE II -‐ 244 KTPD EXPANSION / (Andina Division) Phase II of Andina Division plans to harness its full potential calls for upgrading mining and processing capacity from 94 to . 244 kTPD Plans call for significantly expanded mining operations, a new 150-‐kTPD concentrating plant with primary crushing, ore transport and secondary and tertiary crushing facilities, collective and selective flotation and molybdenum leaching plants, a filtration , plant and a concentrate storage site in Montenegro, near Santiago . The expansion should add 343 kTPY refined copper, helping the Division produce an overall 600 kTPY. Phase III, calling for expanding capacity to 290 kTPD, is under review. Also considered is underground development of the -‐ Sur Sur Mine once the third panel is shut down. Given the vast amount of low-‐grade sulfides generated by massive mining operations, forced leaching is being considered to help mitigate the environmental mpact i of acid water. Phase III is not considered in this report. Workforce: Not available. Throughput: An additional 150 kTPD sulfide ores. Est. Investment Amount: US$6.74 billion . Status: Feasibility study started in September 2009, expected completed in 2013. Environmental Impact Assessment Review was refiled in January. Replies to 2,200 queries received in April must be filed by September. S tart-‐up not expected before 2021. NEW PIT-‐PLANT TRANSFER / (Andina Division) Includes all work required to replace the current Don Luis / pit crushing plant ore transfer scheme, as plant location will be impacted by development of pit the new required to feed new the 94 kTPD capacity. Works include building a platform at node 500, 3, a cave-‐in protection system, a new primary crusher, the Haulage III conveyor tunnel, a SAG hopper distribution and feed system, and a new secondary crushing plant. The project will extend pit life through 2033. Workforce: Not available. Throughput: N/A. Est. Investment Amount: US$1.42 billion Status: In progress, early work underway, basic engineering proceeding concurrently. Expected operational in 2022. 28 Chilean Copper Commission -‐ Research Department July 2013 II) Major Private Copper Miners 2.1 Antofagasta Minerals (www.antofagasta.co.uk) ANTUCOYA (Minera Antucoya Ltda.) Located 125 km NE agasta of Antof and 45 km from the coast, with proven and probable reserves of 642 million tons and 0.35 copper grades (0.21 cutoff grade). Expected to produce 85 kTPY copper cathodes through the first then decade, settle 80 at kTPY through the second and last decade of expected life . Antucoya will be a conventional -‐ open pit mine. Ores will be leached in a dynamic heap and processed in an SX-‐EW plant using raw seawater. Albeit a low-‐grade greenfield project, the orebody is relatively shallow and pre-‐stripping to remove some 35 million tons of overburden should take only nine months. The overburden/ore ratio is a low 1:1 and the deposit lies within established a mining zone, which ensures ease of access to existing infrastructure, including energy, water , and human resources. Construction was halted n i late December 2 201 to revise the project given rising current and potential costs. Following adjustments, construction restarted in Q2 2013. Workforce: 5,000 to 7,000 during construction , 1,400 during operation . Throughput: High-‐grade ores to 96 kTPD; run-‐of-‐mine to 38 kTPD. Est. Investment Amount: US$1.9 billion, not including a potential acid plant. Status: In progress after restart. Start -‐up expected in mid-‐2015. CENTINELA DISTRICT The Centinela mining district (formerly Sierra Gorda) is the main focus of Antofagasta Minerals exploration targets in Chile. The Group owns or controls several copper oxide and sulfide deposits in this 30-‐km long district l ocated in homonymous the municipality . These include Esperanza, El Tesoro, Esperanza Sur and Encuentro oxides ( and sulfides). In addition, the Polo Sur prospect holds reserves of 704 million tons with 0.37 grades plus gold and molybdenum. Antofagasta Minerals is also exploring other deposits in the area, notably Penacho Blanco. Reserves at the larger Esperanza Sur (Ex-‐Telégrafo) and Encuentro (Ex-‐Caracoles) deposits add up to a combined 4.3 billion tons with 0.36 average copper grades (plus gold and some molybdenum), providing about 30 percent of overall mineral resources held by Antofagasta . Minerals Development plans are as follows: a) Esperanza Sur (Minera Esperanza S.A. ) Named for its position at the south end of the Esperanza operation. Resources stand at 2.96 billion tons with 0.34 average copper . grades Sulfide ores account for 2.9 billion tons with 0.34 grades (plus 0.010 molybdenum and 0.11 g/t gold) while oxides account for some 64.1 million tons with 0.21 copper grades. Esperanza Sur will help support current mining plans and gradual expansion of the existing concentrating plant. 29 Chilean Copper Commission -‐ Research Department July 2013 On-‐site studies show that on the order of 150 million tons of material will need to be -‐ pre stripped, including 50 million tons of oxide resources that could be processed by the El Tesoro SX-‐EW plant starting in 2017. As to sulfide resources, a new concentrating plant could add some 140 kTPY copper and 160,000 oz. gold through the first ten years, over an estimated total lifespan of 34 . years Workforce: Not available. Throughput: An additional 95 kTPD sulfide ores. b) Encuentro (Antofagasta Minerals S.A. ) Encuentro stands 10 km SE of Esperanza. Resources are an mated esti 1.3 illion b tons with 0.41 average copper grades. Sulfides account for 1 billion tons with 0.41 copper grades (plus 0.014 percent molybdenum and 0.15 g/t gold), while oxides stand at 212 million tons with 0.40 copper grades. i. Encuentro Oxides : Encuentro requires pre-‐stripping some 600 million tons, including some 150 million tons of oxide ores that could be processed by the -‐ El Tesoro SX EW plant starting in 2016, extending plant life for an extra eight years. This initiative is known Encuentro as Oxides . The project contemplates a new crushing plant, heap leaching facilities, and piping the pregnant leach solution to El the Tesoro plant for processing . Construction could start in early 2014, provided the Environmental Impact Assessment Review (EIA) filed in December 2012 is d approve in 2013. Construction should extend through two years, with first production expected in 2016 . The project could add some 50 kTPY copper cathodes over eight years. Workforce: 2,000 during construction; 500 during operation. Throughput: About 65 kTPD, including high-‐grade ores and run-‐of-‐mine. ii. Encuentro Sulfides : Current plans call for accessing sulfides once oxide mining begins. An independent feasibility study based on results from a preliminary feasibility study completed in 2012 is being conducted to . this effect Encuentro Sulfides could support a 95-‐kTPD concentrating plant producing 140-‐160 kTPY copper and 160-‐ 180,000 oz. gold over 22 years. Tests show that raw seawater can be used process to sulfide ores directly. Workforce: Not available. Throughput: 95 kTPD sulfide ores. Est. Investment Amount: US$7.6 billion (Esperanza Sur: US$3.5 billion; Encuentro Oxides: US$600 million; Encuentro Sulfides : US$3.5 billion). Status: Feasibility study underway. Plans are to begin construction of Encuentro Oxides in 2014 and start-‐up in 2016. Depending on progress on additional feasibility studies, Esperanza Sur might begin production no earlier than 2017 and Encuentro Sulfides in 2020. 30 Chilean Copper Commission -‐ Research Department July 2013 ESPERANZA UPGRADE (Minera Esperanza S.A.) Minera Esperanza, 30 km from Sierra Gorda, in Antofagasta, is optimizing its operations through two Environmental Impact Statements (DIA) filed in 2013. Esperanza Upgrade III, the first of these, had its DIA approved in May 2012. It seeks to increase the supply of critical inputs (water, process inhibitors and reagents, etc.), process oxide ore resources in areas to be cleared for use as dumpsite s, and construction of a new molybdenum processing plant. The leading component is a molybdenum plant to be built near the collective flotation area, next to the existing concentrating . plant This includes a standard 5.5-‐kTPD selective flotation circuit encompassing primary flotation, cleaning flotation, filtration, drying, and concentrate storage. The resulting copper-‐gold concentrate will be the “tailings” to be sent to the existing concentrating plant for processing. The Esperanza Upgrade IV – Process Optimization, whose DIA was filed in June, focuses on improving existing milling and flotation systems through a secondary and tertiary crushing plant designed to complement current capacity. Plans also contemplate new concentrate and tailing thickeners. Once completed, the Esperanza upgrades will boost concentrating plant throughput by 12 kTPD to 105 kTPD, which would translate into an additional 19 kTPY copper concentrate. The molybdenum plant will produce an estimated 11.5 kTPY during operation lifespan. Workforce: 875 during construction; 49 during operation. Throughput: An additional 12 kTPD sulfide ores and 5.5 kTPD molybdenum. Est. Investment Amount: US$550 million (Esperanza Upgrade III: US$200 million; Esperanza Upgrade IV – Process Optimization: US$350 million). Status: Under construction and feasibility study underway, respectively. Upgrade III secured approval of its Environmental Impact Statement (DIA) in May 2012 while Upgrade IV awaits approval of DIA filed in June 2013. Start-‐up for both expected no earlier than 2015. LOS PELAMBRES EXPANSION IV (Minera Los Pelambres S.A.) Los Pelambres stands 170 km east of Los Vilos, at an altitude 100 of 3, m. Baseline resources stand at 5.6 billion tons with 0.52 copper grades (plus 0.013 molybdenum and 0.03 g/t gold), over four times the current operation reserves . The company is exploring two long-‐term development options. Option 1 requires no new infrastructure and involves increasing concentrating plant capacity by up to 15 percent. Option 2, or Los Pelambres Expansion, seeks to increase processing capacity by 175 kTPD. The company has been conducting a preliminary feasibility study of both options since 2012. Last year a drilling campaign succeeded in reclassifying available mineral resources. While the long-‐term goal is to double the ore processing capacity, the project will proceed gradually to ensure sustaina bility. Workforce: Not available. Throughput: An additional 175 kTPD sulfide ores. 31 Chilean Copper Commission -‐ Research Department July 2013 Est. Investment Amount: At least US$7 billion. Status: Preliminary feasibility study completed in 2013, to be followed by feasibility study. Start-‐up expected no earlier than 2021; production to rise gradually starting in 2022. 2.2 BHP Billiton (www.bhpbilliton.com) ESCONDIDA OXIDE LEACH AREA PROJECT (Minera Escondida Ltda.) The Oxide Leach Area Project (OLAP) calls for construction of a new dynamic heap and a system of conveyors designed to maintain oxide leaching capacity at current levels after depletion of the existing heap in 2014. Current SX -‐EW cathode production equipment and facilities will remain in use. Workforce: 420 to 800 during construction; 85 during operation. Throughput: 67.5 kTPD, same as current. Est. Investment Amount: US$721 million. Status: In progress, start -‐up expected in mid -‐2014. ESCONDIDA ORGANIC GROWTH PROJECT I (Minera Escondida Ltda.) In 2011 BHP reformulated the original Escondida Phase V project as an organic growth project calling for addition of a new mill to the Laguna Seca Plant, increasing plant throughput by 15 kTPD, and build a new 152-‐kTPD concentrating plant replacing the Los Colorados facility, slated for decommissioning to clear the area for new mining. Plans include a second organic growth project (OGP II) which calls for adding a third plant, a seawater desalination facility, and power line infrastructure. OGP II is at the scoping study stage. Workforce: 5,900 to 8,570 during construction; 739 during operation. Throughput: Net 47 kTPD sulfide ores increase: a) Boost Laguna Seca Plant by 15 kTPD to 135 kTPD sulfide ores. b) Decommission 120-‐kTPD Los Colorados plant . c) Add 152 -‐kTPD concentrating plant. Est. Investment Amount: US$3.83 billion . Status: In progress since February 2012, 30 percent completed in June 2013. Concentrating plant start-‐up expected in Q1 2015. 32 Chilean Copper Commission -‐ Research Department July 2013 2.3 Capstone Mining (www.capstonemining.com) SANTO DOMINGO (Minera Santo Domingo) Santo Domingo is the largest of four IOCG deposits being reviewed by Capstone Mining in the Diego de Almagro district following its June 2011 acquisition of Far West . Mining A preliminary feasibility study completed in August 2011 reassess ed project investment and operating parameters. Available information suggests possible development of sulfide resources to produce over 100 kTPY refined copper, 470 kg/yr. of gold, and 4 million TPY iron ores (magnetite and hematite). Workforce: Not available. Throughput: 70 kTPD sulfide ores through t he first five years, 63.5 kTPD sulfide ores thereafter. Est. Investment Amount: US$1.8 billion. Status: Feasibility study and preparation of Environmental Impact Assessment Review underway. In late 2012 the company deferred completion of feasibility study to 2014 and start-‐up to no earlier than 2017, assuming reasonable electricity . costs 2.4 Doña Inés de Collahuasi (www.collahuasi.com) COLLAHUASI EXPANSION (PHASE III) Collahuasi is expanding its ore processing capacity from 140 to 270 kTPD with a view to boosting refined copper production to +1 million TPY. Expansion plans, irst f designed to boost processing from 140 to 270 and then to 260 kTPD, had a new stage added in 2011. a) Phase I, completed in October 2011, optimized facilities for throughput of 150 kTPD. b) Phase II, completed in Q2 2013, is part of optimization plans designed to achieve a 160 kTPD processing rate. Last March SAG mill 3, which handles nearly two-‐thirds of site output, underwent the necessary overhaul during scheduled a 45 -‐day shutdown . c) Phase III, currently undergoing a preliminary feasibility , study would add 1 or 2 milling lines designed to boost processing to 260-‐350 kTPD in order to achieve Collahuasi’s +1 million TPY refined copper target. Workforce: Not available. Throughput: An additional 260 to 350 kTPD sulfide ores. Est. Investment Amount: Phase III: US $6.5 billion. Status: Phases I and II completed. Per Collahuasi’s 2012 Annual Report, “Phase III expansion will remain in the prefeasibility stage until operating stability is restored”. Based on this, Cochilco expects tart s -‐up no earlier than 2019, two years later than estimated in 2012. As such, investment amounts remain subject to review. 33 Chilean Copper Commission -‐ Research Department July 2013 2.5 Freeport-‐McMoRan (www.fcx.com) EL ABRA MILL (Cía. Contractual Minera El Abra) First envisaged a decade ago, then shelved in favor of the recently commissioned Sulfolix hydrometallurgical project, the project ensures operational continuity by processing primary sulfide reserves emerging under leachable resources. A preliminary feasibility study for a new concentrating plant was started in July 2010. The new plant intends to process 150 to 200 kTPD in order to produce some 300 kTPY copper concentrate, double the current copper cathode output. An exploration campaign conducted in 2012 shows that El Abra Mill has the potential to produce over 450 kTPY copper concentrate. Workforce: Not available. Throughput: 150 to 200 kTPD sulfide ores. Est. Investment Amount: US$5 billion. Status: Feasibility study underway, with a focus on evaluating a potential -‐ large scale milling operation. An exploration campaign points to significant sulfide resource potential. Start-‐up expected no earlier than 2018. 2.6 Pan Pacific Copper (www.ppcu.co.jp) CASERONES (Minera Lumina Copper Chile) Caserones stands at 4,200 m altitude, 115 km southeast of Copiapó, in Atacama. The project entails mining sulfides for their copper, gold and molybdenum content and leaching lower-‐grade resources. Plans call for expanding concentrating capacity to 160 kTPY copper and 3 kTPY molybdenum and leaching capacity to 30 kTPY SX-‐EW cathodes. Sulfide stage implementation contemplates 80-‐90 kTPD concentrating throughput through the first four years, then a boost to 125 kTPD to offset declining grades. Expected average concentrating grades are 0.35 oxides and 0.45 sulfides through the first five years. Expected average leaching grades are 0.22 soluble copper and 0.34 total copper concentrating grades through the entire 28-‐year life of mine. Pre-‐stripping of 15 million tons of overburden was performed from December 2011 to December 2012. Workforce: 5,000 during construction; 1,500 during operation. Throughput: 80-‐90 kTPD sulfide ores during first four years, then a boost to 125 kTPD to offset declining grades. Est. Investment Amount: US$3 billion. Status: SX-‐EW plant was commissioned in March 2013 and began shipping in May 2013. First copper concentrate production expected in late 13, 20 with full production in Q1 2014. 34 Chilean Copper Commission -‐ Research Department July 2013 2.7 KGHM International (www.quadrafnx.com) SIERRA GORDA (Minera Quadra Chile) A deposit located in the vicinity of Spence and Tesoro, 140 km east of Antofagasta. A joint venture by KGHM International (55%) and Sumitomo (45%). Exploration suggests the presence of major copper, gold and molybdenum reserves that could be processed at a rate of 110 kTPD to produce some 220 kTPY refined copper in concentrate and cathode form plus 62 koz/ yr. gold and 11 kTPY molybdenum over 20 a -‐year lifespan. Changes introduced by KGHM in April 2012 to the Environmental Impact Assessment Review approved in 2011 increased the final investment amount to US$3.07 billion. Pre-‐stripping got underway in December 2012, following final EIA approval. Some 61.1 million tons of overburden had been removed to March 2013. After year 3 the company plans to expand to 190 kTPD at a cost of US$828 million in order to maintain copper production targets. Workforce: 6,000 during construction; 2,000 during operation. Throughput: 110 to 190 kTPD sulfide ores. Est. Investment Amount: US$3.9 billion. Status: In progress, pre-‐stripping 33 percent completed. Seawater piping and tailings dam construction ongoing since Q1 2013. Plant construction 25 percent completed. Start-‐up expected in 2015. 2.8 Teck (www.teck.com) QUEBRADA BLANCA PHASE 2 (Minera Quebrada Blanca) A hypogenic primary sulfide deposit underlying secondary supergenic sulfide ores currently yielding some 80 kTPY SX-‐EW cathodes. Development is slated to coincide with depletion of economic leachable reserves and should prolong the life of mine by 39 . years Project calls for a 135-‐kTPD concentrating plant using desalinated water. Expected production stands at 200 kTPY copper concentrate and 5.2 kTPY molybdenum concentrate . In October 2012 the company withdrew its EIA with plans to restate and resubmit it by Q2 2013. This implied a one-‐year delay in the project , schedule a time frame the company intended to use to bargain with electricity suppliers and secure financing. In late April 2013, however, the company reported that the restated EIA would not be filed before 2014 due to issues with permits that need to be revised in light of the new EIA filing. T he company is also taking steps substantially to reduce capital expenditures. Workforce: 7,000 to 9, 200 during construction; 1, 787 to 2,053 during operation. Throughput: 135 kTPD sulfide ores. Est. Investment Amount: US$5.59 billion. Status: Feasibility study underway. EIA being restated due to the need to secure revised permits for existing facilities. EIA filing expected no earlier than 2014. If approved, construction could start in early 6, 201 with start-‐up in 2019. 35 Chilean Copper Commission -‐ Research Department July 2013 RELINCHO (Minera Relincho) A copper and molybdenum deposit 50 km north of Vallenar, bought by Teck in 2008 and kept reserve. Preliminary studies call for a processing capacity of 140 kTPD to produce up to 180 kTPY copper concentrate and 6 kTPY refined molybdenum over 22 years. Similar to Quebrada , Blanca it would use desalinated water. In late 2012 the company reported contractor issues securing port and power facility construction permits. As a result, completion of feasibility study has been deferred to late 2013. Workforce: Not available. Throughput: 140 kTPD sulfide ores. Est. Investment Amount: US$3.9 billion, excluding desalination. Status: Feasibility study underway, although issues securing port and power facility construction permits have delayed completion to late 1 20 3. Cochilco now expects start-‐up in 2019. 2.9 Glencore Xstrata (www.xstrata.com) LOMAS BAYAS SULFIDES III (Minera Lomas Bayas) Xstrata Copper is conducting a preliminary feasibility study of Lomas Bayas , III a sulfide undertaking designed to ensure the continuity of current operations. The project calls for developing underlying measured and indicated sulfide resources of about 435 million tons with 0.39 average copper grades. Includes construction of a 70-‐kTPD concentrating plant adding 70 kTPY of copper concentrate to current cathode production through at least 18 . years Contemplates use of seawater, to be confirmed by feasibility study. Workforce: Not available. Throughput: 70 kTPD sulfide ores. Est. Investment Amount: US$1.6 billion. Status: Deemed possible, undergoing preliminary feasibility study. S tart-‐up expected in 2017. 36 Chilean Copper Commission -‐ Research Department July 2013 III) Medium-‐Scale Copper Mining 3.1 Amerigo Resources (www.amerigoresources.com) VALLE CENTRAL EXPANSION (Minera Valle Central S.A.) Minera Valle Central stands 8 km east of Rancagua and 90 km south of Santiago, at 700 m altitude. This operation currently handles some 45 kTPD of Colihues Dam tailings and 135 kTPD of fresh El Teniente Division tailings. In January 2013 the company filed an EIA concerning a plan to increase capacity from 45 to 85 kTPD in order to process tailings from the older Cauquenes Dam. Workforce: 595 during construction; 178 during operation. Throughput: 70 kTPD sulfide ores. Est. Investment Amount: US$152 million. Status: Currently in the feasibility stage, awaiting EIA approval. Start-‐up expected in 2015, following a two-‐year construction stage. 3.2 Copec (www.empresascopec.cl) DIEGO DE ALMAGRO (Minera Sierra Norte S.A.) An IOCG (iron oxide-‐copper-‐gold) deposit some 12 km west of Diego de Almagro, 15 km SW of the Pampa Austral dam, and 50 km east of Chañaral. Reserves include 300 kMT copper and 27 koz of gold in two areas known as Esther and Carmen-‐Paulina. Originally a Cerro Dominador project, it is now owned by Minera Sierra Norte, a mining subsidiary of Copec the Group. The project calls for -‐ open pit development and processing of up to 100 million tons of oxide, sulfide and mixed resources. Oxides will be handled in a 2-‐kTPD LX-‐SX-‐EW plant in order to produce some 11 kMT SX-‐ EW cathodes. Sulfides will be processed in 24-‐kTPD concentrating plant to produce 22 kTPY copper concentrate. The project is expected extract to and pipe seawater to its facilities. Workforce: 595 during construction; 178 during operation. Throughput: 24 kTPD sulfide ores; 2 kTPD oxide ores. Est. Investment Amount: US$597 million. Status: Feasibility study underway, awaiting approval of EIA filed in November 2012. Start-‐up expected no earlier than 2015. 37 Chilean Copper Commission -‐ Research Department July 2013 3.3 Hot Chili (www.hotchili.net.au) PRODUCTORA (Soc. Minera El Águila Ltda.) Productora stands in Sierra Coyiguales, 18 km SW of Vallenar, Atacama. A scoping study showed sulfide resources of over 165 million tons with grades of 0.6 copper, 0.1 g/t gold and 123 ppm molybdenum. Plans call for -‐ open pit development and processing in a 30-‐kTPD concentrating plant to produce 50 kTPY refined copper and 42 Koz/yr. gold through a lifespan of 20 years. A preliminary feasibility study, slated for completion in late 1 20 3, is assessing development options. EIA filing expected in the second half of 2013. Workforce: Not available Throughput: 30 kTPD sulfide ores. Est. Investment Amount: US$700 million. Status: Completion of preliminary feasibility study expected in late 2013, investment decision expected in 2014. Start -‐up no earlier than 2018. 3.4 PanAust (www.panaust.com.au) INCA DE ORO (Cía. Minera Inca de Oro) A project first scoped by Codelco following exploration in the Diego de Almagro district. A preliminary feasibility study called for production of 50 kTPY copper concentrate and 40 koz/yr. of gold. Plans include storing pre-‐stripping overburden for subsequent oxide leaching in order to offset an expected subsequent decline in copper concentrate output . Since this is nor a mi project for Codelco’s scale of operation, a 66 percent share was sold to Australia’s PanAust under Law 19137, with Codelco retaining 34 percent ownership. The agreement included payment of an additional net smelter return (NSR) fee to Codelco. A feasibility study completed in June 2012 determined that at a price of US$3/lb., the project was not robust enough and recommended postponement. The company is now considering improvements that include addition of adjoining prospects Carmen and Artemisa. Competitive electrical rates will also be negotiated. Workforce: 1,000 during construction; 350 during operation. Throughput: 30 kTPD sulfide ores. Est. Investment Amount: US$600 million. Status: Revising feasibility study completed in June 2012. As a result, Cochilco restates its start-‐up estimate to no earlier than 2017. 38 Chilean Copper Commission -‐ Research Department July 2013 3.5 Pucobre (www.pucobre.cl) EL ESPINO (El Espino S.A.) A copper/gold project 36 km NE of Illapel, in the province of Choapa, Coquimbo. It is owned by Pucobre through wholly -‐owned El Espino S.A., bought in March 2011 from Canada-‐based Explorator Resources Inc. Recent estimates suggest reserves of 735 kMT copper and 828 Koz of gold. Plans call for a 3-‐ 6. kTPD LX-‐SX-‐ EW plant and a 20-‐kTPD concentrating plant handling sulfide ores. Expected output is 7.2 kTPY copper cathodes from oxide leaching, 32.8 kTPY refined copper from sulfides, and 25 Koz/yr. gold concentrate over n a 18-‐year lifespan. Workforce: 2,900 during construction; 700 during operation. Throughput: 20 kTPD sulfide ores, 6.3 kTPD oxide ores. Est. Investment Amount: US$624 million. Status: Undergoing preliminary feasibility study, EIA filed in April 2013. Company expects EIA approval in 2014 and start-‐up in 2017. TOVAKU Sociedad ( Punta del Cobre S.A.) Tovaku, formerly Puntilla Galenosa, is a copper oxide joint venture with Codelco, which provides the mining concession while Pucobre assumes feasibility and exploration costs. If feasible, the project will be 60 percent owned by Pucobre and 40 percent by Codelco . Tovaku, 50 km from Tocopilla, in Antofagasta, is in the preliminary feasibility stage. Estimated investment amount is US $600 million for production on the order 40 of kTPY copper cathodes. Workforce: 4,700 during construction; 650 during operation. Throughput: Not available. Est. Investment Amount: US$600 million. Status: Preliminary feasibility study underway. EIA filing expected in late 2013; start-‐up expected in 2018. 39 Chilean Copper Commission -‐ Research Department July 2013 Annex C -‐ Gold and Silver Mining 1. Atacama Pacific Gold (www.atacamapacific.com) CERRO MARICUNGA (Minera Atacama Pacific Gold Chile Ltda.) Cerro Maricunga, owned by Canada-‐based Atacama Pacific Gold, stands 140 km NE of Copiapó, Atacama, at the northern end of the Maricunga gold belt, some 20 km south of Kinross Gold’s La Coipa gold and silver mine. Measured and indicated resources are 248 million tons with gold grades of 0.42 g/t, equivalent to over 3.34 million oz. Inferred resources stand at 226 million tons with gold grades of 0.36 g/t or some 2.65 million oz. of gold content. Based on a Preliminary Economic Assessment finalized in March 2013, the project calls for an open-‐pit operation and heap-‐leaching of 80 kTPD oxide ores to produce some 298 Koz/yr. gold through the first five years, then an average of 220 Koz/ yr. during a lifespan of 10 years. In June 2013 the company and Eton Chile, an Exeter Resources subsidiary developing the Caspiche project, entered into a joint venture to explore groundwater sources in shared areas of Cuenca Dos and Laguna Verde, Atacama. In July 2013 the company bought a flow of 2.5 million cbm/year (80 l/s) from utility Aguas Chañar S.A. to supply its 65-‐kTPD processing plant option. Flow rates could rise to 100 l/s if the 80-‐kTPD plant option is selected. Workforce: Not available. Throughput: 65 to 80 kTPD of oxide ores for cyanide leaching. Est. Investment Amount: US$515 million. Status: Feasibility study underway. Currently considering elimination of proposed secondary and tertiary crushers in order to cut CAPEX for the 65-‐kTPD operation. EIA should be filed in August 2013. Start-‐up expected no earlier than 2017. 2. Barrick Gold (www.barrick.com) PASCUA (Cía. Minera Nevada S.A.) (www.pascualama.com) Pascua, a gold deposit at 4,600 m altitude 53 km north of the old El Indio Mine, forms a single unit with the Lama deposit on the Argentine side of the border. Global erves res are estimated at 17.1 million oz. gold and 560 million oz. silver, mostly in oxide form. 40 Chilean Copper Commission -‐ Research Department July 2013 Three-‐fourths of reserves lie in Chile (Pascua) and the remainder in Argentina (Lama). Ores will be crushed on-‐site in Chile, then trucked to facilities across the border. These include a cyanide leaching plant processing free-‐milling ores (83%) to produce metal doré12 and a concentrating plant processing refractory ores (17%) to a obtain gold -‐ and silver-‐rich copper concentrate. Expected annual output stands at 850 koz/yr. gold and 35 million oz. silver (about 26 TPY gold and 1.1 million TPY silver, respectively), about ¾ from the Chilean side. Information on marginal copper content is not available. Barrick has halted construction in Chile in order to meet environmental and other conditions imposed by regulatory authorities, although activities deemed necessary for environmental protection will carry on as authorized. Construction in Argentina, site of most key infrastructure, including the processing plant and tailings dam, is not affected. Workforce: 6,000 during construction; 1,660 during operation. Throughput: 33 kTPD through the first years three ; 44 kTPD thereafter. Est. Investment Amount: US$4.25 billion (portion to disbursed be in Chile, total cost is US$8.5 billion ). Status: Construction on hold following a July 2013 restraint order granted by the Court of Appeals of Copiapó to five Huasco River Valley native communities that charged Barrick with numerous environmental standard violations. These included razing glaciers Toro 1, Toro 2 and Esperanza near the minesite and contaminating local water resources by dumping untreated overburden. New details were expected in late May. The project had additionally been fined over CLP$160 million in March and . April Barrick has indicated its intention to restructure construction of a processing plant and other facilities on the Argentine side in order to producing start in mid -‐2016. CERRO CASALE (Minera Estrella de Oro Ltda.) (www.cerrocasale.cl) Located in Aldebaran, on the southern tip of the Maricunga gold belt 100 km due east of Copiapó, Cerro Casale is among Chile’s largest undeveloped gold deposits. The project contemplates gold, silver, and copper production. A -‐kTPD 75 cyanide leaching plant will process free-‐milling ores to obtain doré while a 150 to 170 kTPD concentrating plant will process sulfide a ores to obtain gold -‐ and silver-‐rich copper concentrate. Expected gold production through the first five years is estimated at 1 million oz. (31 TPY) and some 850 koz/yr. thereafter. Copper production is an estimated 115 to 127 kTPY concentrate through a 17-‐year lifespan. 12 A gold and silver alloy in bar form. It is a common commercial gold ore form. Doré is further refined to separate gold and silver. 41 Chilean Copper Commission -‐ Research Department July 2013 An Environmental Impact Assessment Review filed for Cerro Casale in July 2011 was approved in Q4 2012. In May 2013 the Court of Appeals of Copiapó dismissed an application for injunctive relief filed by members of the Colla native community against approval of the EIA for Cerro . Casale The ruling held that the process was not arbitrary and that native communities had been consulted as required under ILO Convention 169. The Colla native community appealed on 9 May but withdrew its appeal in June 2013. Workforce: 11,000 during construction; 2,000 during operation. Throughput: 75 kTPD oxide ores for cyanide leaching; 150 to 170 kTPD sulfide ores. Est. Investment Amount: US$6 billion. Status: Feasibility study completed, awaiting investment decision. Barrick is reviewing conditions in the Environmental Assessment Resolution (RCA). In the current high-‐cost environment, Barrick will not consider a construction decision until Pascua-‐Lama gets underway. In Cochilco’s view, this stance will delay project start-‐up by at least two years to no earlier than 2020. 3. Exeter Resource Corp. (exeterresource.com) CASPICHE (Minera Eton Chile) Caspiche stands in the Maricunga gold belt, 120 km of Copiapó, between the Cerro Casale gold/copper deposit and the Refugio Mine, at altitudes of 4,200 to 4,700 m. Project resources are an estimated 889 million tons with 0.58 g/t gold, 0.24 copper and 1.13 g/t silver grades translating into 19.3 million oz. gold, 41.5 million tons silver and 2.1 million tons copper (30.1 million oz. gold equivalent). A preliminary feasibility study released in January 2012 estimated a 19-‐year open-‐ pit operation with a 150-‐kTPD concentrating plant and a leaching plant for oxide ores and low-‐grade copper. The leaching plant will process some 72 kTPD during the first five years, then fall back to 33 kTPD through the end of oxide processing in ten year . Gold and silver will be recovered in an activated carbon recovery circuit. Average lifespan production is an estimated 696 koz/yr. gold and 844 koz/yr. silver (about 21 TPY gold and 26 TPY silver, respectively) plus 110 kTPY copper concentrate containing some gold and silver. Two milestones were announced in June 2013. First, land rights and easements were secured. The second was a joint venture with the Chilean affiliate of Canada-‐based Atacama Pacific Gold, now developing the 42 Chilean Copper Commission -‐ Research Department July 2013 Cerro Maricunga project, to explore groundwater sources in shared areas of Cuenca Dos and Laguna Verde, Atacama. Workforce: Not available. Throughput: 150 kTPD sulfide ores and up to 72 kTPD oxide ores. Est. Investment Amount: US$4.6 billion. Status: Preliminary feasibility study completed in January 2012; feasibility study underway, expected completed in late 2013. The company is reviewing project guidelines with a view to adding oxide ore processing to mining plans in order to minimize CAPEX. Start-‐up expected in 2017. 4. Goldcorp (www.goldcorp.com) EL MORRO (Minera El Morro) Project spans two deposits (El Morro and Fortuna, the latter holding the largest potential) located in Alto del Carmen, Atacama, 80 km east of Vallenar. Reserves are an estimated 6.7 million oz. of gold and 2.56 million tons of copper. The estimated 90 kTPD processing capacity should result in 150 kTPY copper concentrate with high (353 Moz/yr.; 10 TPY) gold content over 15 . years The project contemplates a 740-‐l/s desalination plant and pumping infrastructure capable of supplying most water requirements. Construction was halted after Environmental Assessment Resolution approval was overturned by the Court of Appeals of Antofagasta, a ruling ratified on appeal by the Supreme Court in late May 2012. In May 2013, the Environmental Impact Assessment Service (SEA) was ordered by the Court of Appeals of Copiapó to reverse a mid-‐March resolution ordering El Morro to consult with native communities as required by the Supreme Court decision. The order was grounded on an application for a restraint order filed by members of the Diaguita native community of the Upper Huasco Valley, claiming that the SEA resolution failed to meet international standards. These developments have pushed back both the native consultation and EIA approval processes by at least six months. Workforce: 3,800 during construction; 2,000 during operation. Throughput: 90 kTPD sulfide ores. Est. Investment Amount: US$3.9 billion. Status: Investment decision on hold pending review of compliance with ILO Convention 169 standards after native consultation was halted in May 2013. El Morro expects to resume construction in 2014. Start-‐up expected no earlier than 2018. 43 Chilean Copper Commission -‐ Research Department July 2013 5. Hochschild Mining Plc. (www.hochschildmining.com) VOLCÁN (Andina Minerals Chile) Volcán stands in the Maricunga gold belt, some 120 km east of Copiapó, Atacama, at altitudes ranging from 600 4, m to 200 5, m, 23 km NW of the Refugio Mine. Volcán is owned by -‐ Peruvian based Hochschild Mining Plc. following acquisition of a 90.84 percent stake from Andina Minerals in early 2013. The property contains mineral deposits El Dorado and Ojo de Agua. The company is focusing on the former, size of the largest high-‐grade gold reserves. Resources are estimated at 389.68 million tons with grades of 0.71 g/t and reserves at 282.6 million tons with gold grades of 0.73 g/t . A preliminary feasibility study released in February 2011 calls for an open-‐pit operation producing an average of 283 koz/yr. gold through a lifespan of 15 years. Throughput is an estimated 55 kTPD, including 11 kTPD milled for flotation and 44 kTPD heap-‐leached. The new owner is conducting a feasibility study on variables not considered in the preliminary feasibility study, including the potential of sulfide flotation for copper recovery, reducing cyanide consumption, improving gold recovery, continuous plant optimization, increased development and processing capacity, engineering costs, and potential synergies with nearby operations. Workforce: Up to 3,000 during construction; 550 during operation. Throughput: 11 kTPD sulfide ores; 44 kTPD of oxide ores. Est. Investment Amount: US$800 million. Status: Feasibility study underway and awaiting EIA approval. Once both tasks are concluded, construction could commence 2014 in and start-‐up in 2017. 6. Kingsgate Consolidated Ltd. (www.kingsgate.com.au) NUEVA ESPERANZA (Laguna Resources Chile Ltda.) Nueva Esperanza, formerly Arqueros, stands in the Maricunga gold , belt east of Copiapó. The project consists of well-‐defined orebodies Arqueros, Chimberos and Teterita, plus a range of other exploration targets. In -‐2000 2004 Arqueros was mined underground on a limited scale, yielding some 288 oz k of gold equivalent. Chimberos was previously developed as an open-‐pit mine, yielding about 40 million oz. of silver in 1998-‐1999. Resources stand at a combined 29.7 million tons with grades of 0.25 g/t gold and 79 g/t silver (1.9 million oz. gold equivalent). Nueva Esperanza will initially process leftover resources from the previous development, with a 6-‐kTPD plant handling crushing, milling, cyanide agitation leach and Merrill Crowe recovery of metal doré. Production is an estimated 250 kg/yr. gold and 100 TPY silver over a 15-‐year lifespan. 44 Chilean Copper Commission -‐ Research Department July 2013 In early 2013 the company reached a final impact remediation agreement with affected native communities under ILO Convention . 169 Following RCA approval in July, the company intends to start construction in September while continuing to apply for other necessary permits. Workforce: Up to 800 during construction; 150 during operation. Throughput: 6 kTPD oxide ores for cyanide leaching. Est. Investment Amount: US$300 million. Status: Feasibility study underway; RCA approved in July. Construction start expected in September 2013. Start-‐up of initial stage expected in late 14 20 , followed by -‐ phase in of remaining stages. 7. Kinross (www.kinross.com) LA COIPA PHASE 7 (Compañía Minera Mantos de Oro) A gold mine some 1,000 km north of Santiago and 140 km NW of Copiapó, in the Maricunga gold , belt in Atacama. The project, referred to in its EIA as “La Coipa Phase 7”, calls for mining gold and silver from the new Pompeya deposit, ensuring operational continuity after the impending depletion of current resources. Plans call for conventional open-‐pit development and ore treatment at an existing processing plant nearby. La Coipa has a 15-‐kTPD design capacity. The company EIA confirms that the new phase will require no plant capacity, equipment, or facility enhancements. Ore volume fed to the plant will be below that handled in years past , thus requiring fewer inputs . Similarly, as the existing infrastructure remains available, no new construction or expansion of facilities will be required, including minesite camps, shops, explosive storage, input supply or industrial or household waste management. Start-‐up for a four-‐year operation expected in H1 2015, with site closure commencing in 2019. Workforce: 100 during construction; 80 during operation. Throughput: 15 kTPD of ores for cyanide leaching. Est. Investment Amount: US$200 million. Status: Feasibility study underway, EIA filed in July 2013 and awaiting approval no later than Q1 2014, with construction set to start soon thereafter. Start -‐up expected Q1 in 2015. 45 Chilean Copper Commission -‐ Research Department July 2013 LOBO-‐MARTE (SCM Santa Rosa) Deposit located in the Maricunga gold , belt 160 km east of Copiapó, at 4,200 m altitude. A preliminary feasibility study calls for -‐ open pit mining at a rate of 47 kTPD, then leaching ores to obtain an estimated 350 koz/yr. gold (about 10 TPY) in doré form. Work was halted in August 2012 in order to downsize the project and investment amounts. At present the company remains exploring further technical and economic improvements . Workforce: 3,000 during construction; 900 during operation. Throughput: 47 kTPD oxide ores for cyanide leaching. Est. Investment Amount: US$800 million. Status: Feasibility study being restated , EIA filed in June 2011. Start-‐up not expected before 2017. 8. Yamana Gold (www.yamana.com) JERÓNIMO ( Agua de la Falda S.A.) Agua de la Falda is 57 percent owned by Yamana Gold and 43 percent by Codelco. Jerónimo, a.k.a. El Hueso, is an undeveloped area of the operation shut down in June 2002 after producing 226,341 oz. gold in 1997-‐2002. The project calls for metallurgical, tailings management and electrical supply changes to the project in effect through 2002. Development will be based on the underground room-‐and-‐pillar method. Resulting waste rock will be used to fill rooms when recovering pillars and to build the tailings starter dam. Ore treatment processes will include three-‐stage crushing, milling, flotation, sulfide oxidation, cyanide leaching, elution , electrowinning and smelting to obtain metal doré in bars. Resources are an estimated 26.35 million tons with grades of 3.45 g/t gold. Expected production stands at about 150 koz/yr. (4.5 TPY) over ten years. Some 190 koz/yr. are expected initially, declining gradually thereafter. After withdrawing the EIA first filed in August 2011, the company refiled in November 2012 with a revised investment amount of US $423 million . Workforce: 600 during construction; 416 during operation. Throughput: 4.2 kTPD oxide ores for cyanide leaching. Est. Investment Amount: US$423 million. Status: Feasibility study completed but awaiting improvements, EIA refiled in November 2012. Results of improvement study expected in 2013. EIA refiling pushed the project back by at least a year. -‐ Start up delayed to no earlier than May 2015. 46 Chilean Copper Commission -‐ Research Department July 2013 Annex D -‐ Iron and Industrial Minerals I. IRON MINING 1.1 CAP S.A. (www.cap.cl) LOS COLORADOS EXPANSION (Cía. Minera del Pacífico S.A.) Project n i volves building a new plant to complement an existing -‐3.35 million TPY facility and expand production of iron ore preconcentrate to 9.15 million TPY. The new facilities will add 2 million tons to Huasco Pellet Feed Plant capacity. Workforce: Not available. Throughput: Not available. Est. Investment Amount: MMUS$413 Status: In progress; start-‐up expected in late 2013. Part of larger the project schedule 2014 for . CERRO NEGRO NORTE ( Cía. Minera del Pacífico S.A.) Open-‐pit development of the Cerro Negro Norte iron mine with a view to producing on the order of 4 million dry TPY iron concentrate through a lifespan of 20 years. Project facilities include: Cerro Negro Norte, comprising the mine proper, waste rock dumpsites, ore stockpiles, primary crushing facilities, ore beneficiation plant, concentrating plant, thickened tailings dam, and a pipeline pumping water from wells in Toledo, in the . Copiapó River Valley Water/slurry pipeline, comprising a pipeline pumping water from the port to Cerro Negro Norte and a slurry pipeline transporting iron ore concentrate from the plant to existing port facilities. Punta Totoralillo, comprising expansion and/or modification of the filtration plant, emergency pond and stockpile areas based on the existing port infrastructure. While port facilities are cleared for use by the authorities, additional demand from the project will require an expansion. This area will include facilities pumping water reclaimed from iron ore concentrate filtration back to Cerro Negro Norte. Workforce: 1,610 during construction; 810 during operation. Throughput: Not available. Est. Investment Amount: US$880 million. Status: In progress; start-‐up expected in Q4 2013. 47 Chilean Copper Commission -‐ Research Department July 2013 1.2 Hebei Wenfeng Industrial Group (www.wfsteel.com) OSO NEGRO (Minera San Fierro Chile Ltda.) Oso Negro, owned by China’s Hebei Wenfeng Industrial Group, stands in Cerro Bandurrias, 60 km south of Copiapó. Iron ores mined from the site will be shipped to China for processing. The operation will first process overlying cakes and waste rock, then mine ores from a pit 1,200 m long by 300 wide m . Plans call for mining about 4,805 TPD for subsequent crushing and dry magnetic separation to produce 2,988 TPD of dry concentrate with 55 percent iron content. The processing plant will feature primary and secondary crushers, fine ore stockpile , high-‐pressure grinding roll (HPGR) crushing, dry magnetic separation, conveyor belts, dust suppression systems, and dry concentrate transportation to final stockpiles at the ports of Punta Caleta or Punta Totoralillo. Workforce: 220 during construction; 500 during operation. Throughput: 4,805 TPD iron ores. Est. Investment Amount: US$90.2 million. Status: Feasibility study underway, awaiting approval of EIA filed in September 2012. Start-‐up expected no earlier than 2014. 1.3 Santa Fe Mining (www.santafegrupo.com) BELLAVISTA (70% JSW , Steel 30% Minera Fe Santa ) Bellavista stands in Llanos de Chamonate, Copiapó, 2.7 km from the Cerro Imán minesite, 10 km from Copiapó and 65 km from the port of Caldera. Plans call for producing some 2.5 million TPY iron concentrate (65% iron content) over 25 years. The project includes optimizing iron recovery through wet magnetic concentration. Iron concentrate will be shipped in 28-‐ton trucks to the port of Punta for Totoralillo shipment abroad. Workforce: 500 during construction; 257 during operation. Throughput: Not available . Est. Investment Amount: US$143 million. Status: Feasibility study underway, Environmental Impact Statement (DIA) approved. Construction expected to take two years, start -‐up no earlier than 2015. 48 Chilean Copper Commission -‐ Research Department July 2013 II. INDUSTRIAL MINERALS 2.1 SQM S.A. (www.sqm.cl) PAMPA HERMOSA (SQM) The project stands south of Pozo Almonte, in the new Nueva Victoria Industrial Zone, site of SQM’s long-‐ term iodine and nitrate production facilities. The project, designed to increase prilled iodine production from 4.5 kTPY to 11 kTPY, also calls for a new 1.2-‐million TPY sodium/potassium nitrate . plant Some 37 million TPY of nitrates will be mined in five areas. After leaching, solutions will be transported to iodine plants and then to solar ponds for crystallization of salts and subsequent purification in the nitrate plant. Workforce: 882 to 1,438 during construction (12 months); 448 to 678 during operation . Throughput: Not available. Est. Investment Amount: US$1.03 billion. Status: In progress , RCA approved. Construction considers gradual implementation over five . years COYA SUR POTASSIUM NITRATE PLANT (NPT4) (SQM Industrial) The plant will stand in the Coya Sur Industrial Zone, 2 km south of María Elena, 77 km SW of Tocopilla and 198 km NE of Antofagasta. The plant will include ore stockpiles, waste salt disposal sites and evaporation ponds. Salts will be processed, including by lump ore dissolution, thickening, crystallization and centrifugation, to obtain a final product in prilled or bulk form. The plant will produce 550 kTPY sodium/potassium nitrate or 450 kTPY of both, plus 40 kTPY boric acid over 40 years. Production is shipped the to Port of Tocopilla for transportation. Workforce: 380 to 570 during construction; 30 during operation. Throughput: Not available. Est. Investment Amount: US$250 million. Status: Early work in progress, awaiting DIA approval . Start -‐up expected in 2014. PAMPA BLANCA EXPANSION (SQM Industrial) Pampa Blanca, south of SQM’s María Elena hub, will add six new mining zones increasing the nitrate extraction rate 37.3 to million TPY over 50 years. Plans call for construction of two industrial areas to increase iodide production to 10 kTPY iodine equivalent in order to feed a new 10 kTPY iodine plant to produce 3.425 million TPY nitrate-‐rich salts (1.293 million TPY sodium nitrate). The project will have a new power transmission system and be supplied by 500 l/s of seawater pumped from the Bay Mejillones of . Workforce: 765 during construction; 510 during operation. 49 Chilean Copper Commission -‐ Research Department July 2013 Throughput: Not available. Est. Investment Amount: US$665 million. Status: Early work in progress, awaiting DIA . approval Mining area and ancillary facility construction is expected to take no less than 39 months. Industrial facility construction will start with the iodide plant, to be built in tandem with mining areas, and should take three years. Subsequent construction of a planned iodine plant will take another two years . Start -‐up expected no earlier than 2015. 2.2 White Mountain Titanium Corp (www.wmtcorp.com) CERRO BLANCO Cerro Blanco, named for the mountain on which it lies, is a rutile deposit near the port city of Huasco, 39 km west of Vallenar, Atacama. Recent company estimates point to reserves of 81.5 million tons with 1.97 average grades and 0.8 cutoff grades. The overburden/ore ratio is an estimated 78. 1. The project calls for conventional open-‐pit development and processing of some 11 million TPY of ores to produce 4 million TPY of rutile over 20 years and 4 months. A ravity g concentration, flotation and magnetic concentration plant will produce some 73 kTPY rutile concentrate with 96 percent grades. Complementary feldspar production considered in the original feasibility study will be reevaluates at a later time by the company. In April 2012 the company secured seawater extraction permits for a desalination plant. The project has an estimated lifespan of 24 years, including six months for acquisitions and detail engineering, 18 months for construction, 21 years for operation , and one year for site closure. Workforce: 450 to 705 during construction ; 658 to 795 during operation. Throughput: 11.4 kTPD rutile. Est. Investment Amount: US$380 million. Status: Feasibility study underway, start -‐up expected in 2016. 50 Chilean Copper Commission -‐ Research Department July 2013 A Cochilco Research Department Publication Prepared By Vicente Pérez Vidal & Cristián Cifuentes González Director, Research Department María Cristina Betancour Muñoz July 2013 51