World No. 1 copper miner expands as others cut back
Chile's Codelco, the world's top copper miner, is accelerating expansion projects even as other major base metals miners are halting new projects and cutting back existing ones.
Posted: Friday , 06 Feb 2009
ANDINA MINE, Chile, (Reuters) -
Chile's Codelco hopes to accelerate a nearly $1 billion expansion at its Andina copper mine in the Andes mountain range, investing aggressively at a time when most global miners are scrambling to balance their books.
Codelco, the world's largest copper producer but which has seen output slide in recent years, expects to eventually turn Andina into its star copper mine, producing between 600,000 and 800,000 tonnes per year after 2015.
A first phase expansion, to about 240,000 tonnes per year, is due to be completed by mid-2010, but mine executives said on Thursday that the ramp-up could be quicker.
"We are in a critical stage of building the future of the company," said Codelco Chief Executive Jose Pablo Arellano, at a ceremony 4,000 meters (13,130 feet) above sea-level to inaugurate the world's largest shovel at Andina.
The new shovel is three stories high, can load a 300-tonne truck in two minutes and uses about as much energy as a small town.
Codelco says two such shovels and 14 new giant trucks will help it boost processing capacity at the mine to 94,000 tonnes of mineral per day, from 72,000 tonnes now.
"One of the important projects Codelco is going forward with is Andina," Arellano said, flanked by company executives, union leaders and Chile's Finance Minister, Andres Velasco.
Codelco is investing billions at a time when most global miners are suspending projects and even selling assets after base metals prices crashed over the past five months.
Codelco plans about $2 billion in investment this year, after spending $1.9 billion in 2008 and $1.7 billion in 2007.
"We cannot halt the progress of our projects," said Fernando Vivanco, Codelco's vice president for projects.
In January, as other global copper miners worried about paying down debt, Codelco issued a $600 million 10-year bond, despite tough credit market conditions amid the global financial crisis.
"These are historic figures," said Arellano. "These are the figures that are allowing us to build a future," he said.
Codelco is also investing in major expansions at its Codelco Norte Division, home to its world-renowned Chuquicamata mine, and at its Teniente Division, home to the world's largest underground copper mine.
The Andina mine expansion started in January 2007, but before that it was on the books as a mine nearing the end of its life.
The deposit was discovered in 1920 and has been mined since 1970.
"We need to build a mine here like Chuquicamata," said Raimundo Espinoza, head of the 14,000-strong Codelco union and a company board member.
Codelco said on Thursday its Andina division produced 219,554 tonnes of copper in 2008, less than an earlier forecast for 220,000 tonnes but up 0.56 percent from the 218,322 tonnes of fine copper it produced in 2007.
It also produced 2,133 tonnes of molybdenum, a metal used to harden steel. (Editing by Jim Marshall)
© Thomson Reuters 2008. All rights reserved.