Antofagasta PLC (ANTO.LN) announced that its board of directors has approved the development of the US$1.3 billion Antucoya copper project in the north of Chile.
The group also announced that it had signed a memorandum of understanding with Marubeni Corporation (TYO:8002) which will become a 30% partner in the project for a consideration totalling US$350 millions and a commitment to fund its pro rata share of the development costs of the project.
Antucoya is a copper oxide deposit located in Chile’s Antofagasta region approximately 45 kilometres east of the group’s Michilla mine. The project is expected to produce an average of 80,000 tonnes of copper cathodes per annum through a standard heap-leach process, and is expected to have a mine life of approximately 20 years, said the company.
“While the project will be one of the lowest copper-grade green-field projects to be developed in Chile, there are a number of compensating factors,” said Marcelo Awad, Chief Executive Officer of Antofagasta Minerals S.A:
The deposit is relatively shallow, reducing the duration and cost of the pre-stripping, and the operational stripping ratio is also low, with a waste to ore ratio of approximately 1:1. The deposit is located within a well developed mining area, with good pre-existing infrastructure. The operation will use untreated seawater in its process. A sulphur burning plant is expected to be constructed to supply sulphuric acid to the operation, reducing the overall cost of the acid supply. Construction of the project is expected to take approximately two and a half years, followed by a ramp up period of production which is expected to start during 2014. The environmental impact assessment for the project was approved in June 2011.
“Despite recent volatility in commodity markets, we remain confident about the long-term fundamentals of copper,” said the executive.