Chile’s Codelco, the world’s No. 1 copper producer, has closed its Chuquicamata smelter and refinery to prevent a further spread of covid-19 among its staff, following the death of a third worker this week.
The move makes of Chuquicamata the first major copper asset to close due to the sharp spike of coronavirus cases in Chile in the last two weeks.
The news came on the heels of the country’s environmental regulator filing pollution charges against the miner over a 2016 tailings spill.
The century-old copper mine is Codelco’s second largest, after El Teniente. Last year, it churned out just over a quarter of the company’s total production.
The Chuquicamata smelter is the state-owned miner’s, and one of the world’s, largest of its kind.
Codelco said the measure was “transitory” in nature and would be “gradually” implemented. The company estimates around 400 people will stop working at the smelter and refinery.
Nicolás Rivera, General Manager of the division, said that halting processing operations at Chuquicamata would allow the company to focus on the more critical productive areas.
Copper output levels have held up so far in Chile, but the more than 1,000 covid-19 cases in the country’s mining industry indicate that risks of further restrictions are very likely, said Colin Hamilton, analyst at BMO Capital Markets, in a note to investors.
“The suspension comes as a blow to the company after having avoided suspending production altogether at any of its major operations so far this year,” Hamilton said Friday.
Despite the pandemic, Codelco has plowed ahead with an ambitious 10-year, $40 billion mines overhaul to keep up production rates.
Ongoing major mine upgrades include a $5.5 billion new level at the El Teniente underground mine, the company’s largest and the world’s no. 6 by reserve size, slated to begin operations in 2023.
It also involves converting the El Salvador mine to an open-pit mine from underground operations. The $1 billion project, known as Rajo Inca, is expected to extend the productive life the mine by 40 years and increase output by 30% from current levels.
Salvador is Codelco’s smallest division by production. Last year, it churned out 50,600 million tonnes of copper, down 16.8% from 2018.
In the copper giant’s pipeline of structural projects there is also the $1.3 billion expansion of the Andina mine. The operation accounted for roughly 11% of Codelco’s output in 2018.
Codelco operates seven mines and four smelters, all in Chile. Its assets account 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.