Chile’s state miner Codelco, the world’s no.1 copper producer, has approved a $1.383 billion underground expansion of its Salvador mine, which will extend the productive life of the aging operation by 40 years and increase output by 30%.
The Rajo Inca project comes at a price tag 33% lower than the original 2014 estimate, thanks to the optimization of existing infrastructure and processes, Codelco said.
The expansion will convert Salvador, in operation since 1959, from an underground mine to an open-pit one.
Construction will start later this year, Codelco said. Initial stripping of rocks covering the mineral deposits is expected to take 22 months, with commissioning slated for the second half of 2022.
The Santiago-based miner anticipates to be producing 90,000 tonnes of copper by the first half of 2023.
The Salvador mine has the lowest productivity among Codelco’s mines, churning out about 50,600 tonnes of copper last year, just under 3% of the company’s total output.
Rajo Inca is one of six major projects the Chilean miner is advancing to boost production at its depleting mines.
A new underground operation at the company’s Chuquicamata division entered production in 2019, while a new mine level at the underground El Teniente mine will follow in 2023.
Codelco’s VP of projects, Gerhard von Borries, said last month that the coronavirus pandemic will have an economic impact of $210 million on the company’s coffers. Of that total, $138 million is due to operational continuity and production and the rest is from expenses in logistics, transportation, new facilities and purchasing supplies.
The company, 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 1.6 million tonnes of production in 2019.