Chile's Codelco is racing to complete the new underground operation at its giant Chuquicamata mine to sustain copper production this year in the face of falling ore grades, bad weather and maintenance shutdowns, the company's CEO said Friday.
State-owned Codelco is targeting production of 1.7 million mt in 2019 to maintain its position as the world's largest producer of copper. But it could struggle in the face of worsening geological conditions at its aging mines. Last year, production fell 56,000 mt to 1.678 million mt, which CEO Nelson Pizarro attributed to a 5.5% drop in ore grades at its mines.
This year could be even tougher.
In January, production fell 12.9% to 127,300 mt as the company carried out shutdowns at its Ministro Hales and Radomiro Tomic mines. Then in February, torrential rain and flooding halted its operations in northern Chile for several days.
"We must make an enormous effort in the remaining nine months of the year to compensate part of production lost to our difficulties in February and some maintenance work in January," Pizarro said at a press conference.
Key to meeting the target will be higher-grade ore extracted from the underground project in which Codelco is investing $5.5 billion. The investment will extend the life of the mine by 40 years as the century-old pit becomes too deep to operate profitably.
"This means ... completing ore-handling works in the Chuquicamata underground project by October or November and continue increasing the proportion of underground production," Pizarro said.
Block-caving is scheduled to begin in May with ore initially extracted by truck before the definitive lunch in October with the completion of underground crushers and a conveyor belt to carry rock to the concentrator plant 14 km away.
Codelco in April aims to restart its Chuquicamata and Potrerrillos smelters following lengthy shutdowns for environmental upgrades. Pizarro said that a sudden takeover of work to install two acid plants at the Chuquicamata smelter amidst a dispute with Canadian engineering firm SNC Lavalin had been fluid.
The drop in copper production, together with a lower copper price and higher input prices, saw Codelco's annual profits by a third last year to $2 billion, not counting paper losses worth almost $400 million as it wrote down the value of assets including its Ventanas smelter and the open pit at its Salvador division.
