Codelco submits $1B plan to extend Salvador mine life beyond 2021

Chile’s state miner Codelco, the world’s No.1 copper producer, has submitted an environmental impact assessment (EIA) for a project that would extend the productive life of its aging Salvador mine by 40 years and increase output by 30 percent.

The Rajo Inca project would convert the existing mine, which has been in operation since 1959 and is due to run out of ore in 2021, to an open pit mine from an underground one.

The Rajo Inca project would convert El Salvador from an underground mine to an open pit.

Codelco said the mine's overhaul would involve an investment of about $1 billion, and boost production to 90,000 tonnes of refined copper from the 62,000 tonnes produced in 2017. The project is part of a $39-billion, 10-year upgrades plan, which was originally pegged at $25 billion.

"Through various drilling campaigns, we have identified copper reserves of 900 million tonnes of ore, with average ore grades of 0.59 percent, which would prolong the useful life of the division and its operational continuity for at least four decades," Codelco's chief executive, Nelson Pizarro, said in the statement.

Rajo Inca is one of six major projects the Chilean miner is carrying out to overhaul its aging mines. If the EIA is approved, the new section should be operational by 2021.

Codelco, which hands over all of its profits to the state, holds vast copper deposits, accounting for 10% of the world's known proven and probable reserves and about 11% of the global annual copper output, with 1.8 million tonnes of production.