Chile's court rules in favour of KGHM’s Sierra Gorda storage facility

Chile's court rules in favour of KGHM’s Sierra Gorda storage facility

The mine is located in the Antofagasta region within the Atacama Desert, Chile’s largest copper producing region. Image courtesy of KGHM

Chile's Supreme Court has ruled in favour of private port operator Antofagasta Terminal International (ATI) over the construction of storage facility for the recently opened Sierra Gorda mine, in the country's northern Antofagasta region.

The mine, operated by KGHM International, is a joint venture between Polish copper company KGHM (55%), Sumitomo Metal Mining (31.5%) and the Sumitomo Corporation (13.5%).

KGHM had originally planned to export copper concentrate from Sierra Gorda via the Port of Antofagasta but in February a local court overturned the project's government-approved environmental impact study, forcing the firm to consider alternative and costlier transport routes.

IMAGE GALLERY: Throwing the switch on KGHM's Sierra Gorda mine in the Atacama Desert

The ruling, published by (in Spanish) said the claims against construction of the project were filed after the passing of the deadline for challenges to an environmental permit resolution.

The copper and molybdenum storage facility is the third project in the past four moths to be given the go-ahead after an initial unfavourable ruling blocked construction. In April, the Copiapo court of appeals ruled in favour of Goldcorp's (TSX:G), (NYSE:GG) US$3.9bn El Morro copper-gold project. A month later Chile’s high court ruled in favour of local non-metallic group SQM to expand one of its operations.

Sierra Gorda’s storage project includes a conveyor belt to carry concentrate from a railway line to the storage facility, and fixed conveyor belts to transport the product to the shipping terminal.

Chile's court rules in favour of KGHM’s Sierra Gorda storage facility

First copper concentrate will be shipped from Sierra Gorda in September of this year. Image courtesy of KGHM

The mine is the world's seventh largest copper project and will be one of the largest molybdenum producers globally. Once the ramp-up phase is completed in early 2015 Sierra Gorda is expected to produce approximately 120,000 mt of copper, 50 million pounds of molybdenum and 60,000 ounces of gold annually.