About 20% of Chile’s largest copper mines closed or reconverted by 2025
Close to 20% of Chile’s largest copper mines will be closed or reconverted by 2025, as the country faces a challenging scenario, marked by falling ore grades at its aging mines, sliding copper price and rising costs.
According to local paper El Mercurio (in Spanish), while the country produced 5.8 million tons of copper last year, 20% of that figure (1.2 million tons) came from operations that are facing closure or conversion in the next 10 years.
But there is a way out for the world’s largest copper producer, which also holds the largest reserves of the red metal. The key seems to be investing in reconversion projects focused on mining sites redevelopment to create new commercial possibilities.
The problem, notes the article, is that most miners believe now is not the best time to start such projects. What is worse: carrying on current activities may make them even more difficult to execute in just a couple of years.
Some official figures reinforce the pessimism. According to the country’s Mining Council, 43% of the global copper producers will be generating higher ore grades than Chile by 2020.
$105 billion to the rescue
But according to the Chilean Copper Commission (Cochilco), investments are picking up and will provide the sector the push it needs. The mining industry, says the body’s latest report, will invest $105 billion in mining projects across the country between 2014 and 2023.
Of the total investment, $81 billion are set to go towards the copper industry, while $23 billion will be used for gold, silver, iron ore another industrial mineral projects.
The massive investment will also include $28 billion in allocated funds for Codelco, the state-owned copper mining company, for new mines and the expansion of one of its major projects.
No trust issues
“Certain projects are currently facing delays,” Cochilco executive VP Sergio Hernández told Business News Americas last month.
The reasons for some projects to be running behind schedule, he said, are a mix of delays in securing permits and difficulties meeting new environmental and social standards.
He also noted that a number of projects included in last year's portfolio have since gone online. These include Codelco's Ministro Hales, Lumina Copper's (CVE:LCC) Caserones and KGHM International's (TSX:QUX) Sierra Gorda mines.
“There are no trust issues here; mining investors are confident. No project has fallen through,” Hernández added.
Mining investments in Chile will feature 14 companies that are looking to implement medium or large-scale mining projects in the country for the first time, according to Cochilco’s report.
The planned investment will also include nine new mining projects with an estimated investment of $8.9 billion, seven of which are copper operations.
Cochilco said once all projects are completed, the country’s copper production would exceed 6 million tons by 2015 and 8 million tons by 2025. Gold production is expected to rise as well, increasing by 191% to 149,480kg a year.
Images courtesy of Codelco, via Flickr.