Codelco delays $6.8 billion mine expansion, reviews impacts on glaciers
State-owned Chilean copper miner, the world’s largest producer of the industrial metal, has yielded to pressures and submitted changes to its controversial $6.8 billion expansion of its massive Andina mine.
The project, near the country’s capital Santiago, includes the removal of six rock glaciers, which granted it fierce opposition from environmentalists and local government officials. They claim Andina’s expansion will pollute and destroy dozens of glaciers in the area, wreaking havoc on drinking water reservoirs that serve the Chile’s central regions.
Codelco, which generates roughly 10% of the world's copper, has warned its future depends on the development of the project, as dwindling ore grades in its old mines are expected to bring annual output down.
"We've worked for over a year to consider each of the comments we received, holding dozens of meetings, workshops, listening to the community, authorities and experts," said Rene Aguilar, Codelco's vice-president of corporate affairs and sustainability, in a statement (in Spanish).
"Today we have a better project, with more information and new measures that address the main concerns and that reduce the project's impact on its surroundings," he added.
The project will also look to recycle on average 65% of the water used at the new operation.
Earlier this month the company issued a US$817 million 10-year bond in an effort to diversify its financing sources and to help fund its ambitious investment plan for the next five years, which requires average annual investment of $4.5 billion.
The company needs about $23 billion to go ahead with the multi billion expansion of Andina, new underground operations at Chuquicamata and El Teniente, and the development of sulphide resources at Radomiro Tomic, among other key projects.
"Our commitment is to fulfill production targets of more than 2 million mt/year from 2025 in order to maintain our leadership position," Codelco Chairman Oscar Landerretche told the Chilean Senate Mining and Energy Commission on Wednesday, EFE reported (in Spanish).
Mining wealth drying up
Mining helped Chile become Latin America’s richest nation per capita, but the country is now contending with a fourth year of drought resulting in wildfires that have affected the port city of Valparaiso and regional farming areas.
President Michelle Bachelet, who vowed during her campaign to strengthen protection of glaciers in the Andes Mountains, submitted a bill in May that improves laws governing glaciers and other water reservoirs, El Clarin reported (in Spanish).
Codelco is not the only company with plans in the environmentally sensitive area. Anglo American (LON:AAL) has also announced expansions to its Los Bronces mining district that neighbours Andina. Barrick Gold (TSX, NYSE:ABX) suspended work at its $8.5 billion Pascua Lama gold project on the border of Argentina and Chile in the Andes, amid a dispute over potential water-supply contamination and court injunctions.
Images courtesy of Codelco, via Flickr.