Anglo vows to quit Los Bronces $3B expansion if it affects nearby glaciers
Global miner Anglo American (LON: AAL) will abandon plans to expand its Los Bronces copper mine in Chile if any potential damage to the nearby glaciers and ground water is identified.
The company, which is preparing an environmental impact assessment for the $3 billion project, says all data collected so far proves it can go ahead with the expansion without causing any harm to the environment.
The asset, Anglo American’s largest copper operation, has been mined for over 150 years and is running out of high-grade ore. “Mining doesn’t need to pollute or destroy the environment. We have showed they can coexist harmoniously,” the company said on Twitter, while posting two photos of glacier La Paloma taken in different years, which show no change on it.
The underground deposit at Los Bronces is estimated to have a 1.7% copper grade, three times the mine's open pit grade. In that sense, it would be a rare example of an expansion project that will process lower tonnage and not require expansion of milling and processing capacity. The company also estimates it will reduce production costs from $1.50 a pound to about $1.3 a pounds while extending the mine life from its current 23 years to 40 years.
The expansion is part of Anglos’ wider plan to increase its copper exposure and output, which include the ongoing construction of its $5-billion Quellaveco mine, in Peru, expected churn our first production in 2022.
The area around Los Bronces copper mine hosts 30% of Chile's copper resources and 10% of the world's. The country is also home to about 80% of South America’s glaciers.
The area around Los Bronces hosts 30% of Chile's copper resources and 10% of world resources. When it comes to glaciers, the country is home to about 80% of South America’s.
Due to the project's sensitivity, Anglo estimates it will take it around three years to obtain all necessary permits, including the environmental license.
Anglo American owns 50.1% of Los Bronces, with a joint venture between Chile’s copper miner Codelco and Mitsui holding 29.5% and Mitsubishi having the reminding 20.4%.
In addition to Los Bronces, Anglo American runs El Soldado copper mine and it has 44% participation in Collahuasi mine, in northern Chile.
Copper deposits are among the hottest assets in mining right now, with the world’s top producers becoming increasingly bullish on the metal. There are expectations that bigger power grids around the world and an electric-vehicle boom will boost demand, while supplies are constrained.
However, industry analysts at CRU say the coming online of major projects — Anglo’s Quellaveco (2022), Teck’s Quebrada Blanca expansion (2021) and First Quantum’s Cobre Panama (already in production) will momentarily eliminate the gap between supply and demand.
The research group, in fact, has cut its forecast deficit and now expects the market will be in a small surplus this year and next, but short again by 250,000 tonnes by 2023.