BHP Billiton expects "significant increase" in copper production at Escondida mine in Chile

BHP Billiton (NYSE: BHP), the world’s largest mining company, expects to increase production at its Escondida copper mine in Chile to over 1.3Mt/y in the 2015 financial year, said CEO Marius Kloppers yesterday in a webcast to discuss fiscal H1 results.

"This is a more than 600,000t copper uplift over 2010," Kloppers said, adding that in terms of mine equivalence "it is sort of like adding another Chuquicamata or Collahuasi."

Escondida, the world's largest copper mine one of the lowest cost producers, it is currently undergoing a US$544mn optimization known as the Escondida Ore Access (EOA) project. The development plan will relocate the primary crusher and conveying system to access higher-grade ore and increase output from 2013.

Kloppers said that the completion of the EOA project will facilitate a recovery in the grade profile to well over 1% copper through the second half of the 2012 financial year.

"That grade recovery together with the commissioning of some de-bottlenecking activities at the Laguna Seca project is expected to drive copper production to over 1.3Mt/y," he said.

Output at Escondida dropped 34.6% in fiscal H1 to 206,200t from 315,500t year-on-year due to lower grades and industrial action in Q1.

In March last year, BHP Billiton Base Metals President, Peter Beaven, said that the company’s ongoing exploration program at Escondida suggests that the basin retains a number of options for further development. In addition to the EOA, Beaven said BHP was studying “a number of additional opportunities to improve access to higher grade ore and increase processing capacity over the years to come.”

As a result of the studies announced by Beaven, two future expansion projects at Escondida are already in the feasibility stage.

The first one is the Escondida Organic Growth Project, which is expected to set the framework for expansion over the coming decades. Kloppers that the company expects board approval in the first half of 2012, with commissioning scheduled for 2015.

The other project, known as Escondida Oxide Leach Area, is also in the feasibility stage.

Besides Escondida, BHP Latin American operate iron ore mines in Brazil, other copper mines in Chile and Peru, and has a 33.3% stake in the Cerrejon mine in Colombia, the largest coal operation in Latin America.