Think of Chile, think of copper. Maurice Jones looks at what is happening in the South American country's mining industry.
The Chilean mining industry is dominated by one commodity, copper, and one mining organisation, the state-run operator Codelco, but that is far from the whole story.
International mining companies such as BHP Billiton and Rio Tinto also play a major part, but not necessarily as competitors of Codelco. BHP Billiton’s base metal division is based in Santiago, managing some operations in Austrlaia and Peru as well as Chile. BHP Chile operates the Escondida mine with a 57.5 per cent share.
Another major player is Antofagasta Minerals that mines and markets copper in Peru as well as Chile. It operates the El Tesero, Los Pelambres, Michilia and Esperanza mines making it the country’s fourth largest copper producer.
In addition to copper, Chile is a producer of world importance for molybdenum and rhenium, the latter being used in small amounts for nickel-based superalloys used in jet engines.
Chile rose to international public prominence with the rescue of the trapped miners at San Jose mine but, although this was an excellent lesson in international co-operation, it was not a good advertisement for some older section of the industry. At the other end of the scale, with some of the largest mines in the world, both open-pit and increasingly underground, Chile boasts some of the most efficient operations.
As well as increasing efficiency and maintaining international competitiveness, major challenges often faced by Chilean mining are lack of water, and lack of energy, to run operations. These challenges sometimes result in major projects in their own right.
At BHP Billiton’s 57.5 per cent owned and operated Escondida mine, for example, which is in the Atacama Desert, a water sourcing project through desalination has recently been approved. This is a joint venture with Rio Tinto (30 per cent). Other mines in Chile are planned to or already utilise non-treated seawater such as Antofagasta’s Minera Michella on the coast.
In addition to the Escondida mine, Rio Tinto is in joint venture with Chinalco Tunnan Copper esources of China to explore and assess three properties. Rio has also entered into joint ventures with Codelco.
Another common trend is to reach deeper reserves through adits or other underground developments, often below well established openpit workings. Codelco’s Chuquicamata project seeks to transform the world’s largest open-pit mine, already with a century of history, into a huge underground operation for copper and molybdenum ore. The reserves below the open pit are still more than 60 per cent of what has been mined during the last 90 years. Ore extraction will be by macro blocks and block caving on four levels.
Codelco, was formed in 1976 from foreign-owned copper companies that were nationalised in 1971. The government Minister for Mining is its President. It is currently the largest copper producer in the world, at around 11 per cent of the world total. This is mainly as cathode copper produced by electrolysis It is also one of the world’s largest producers of molybdenum, and small amounts of gold and silver are produced from the refinery anode slimes. Reserves and resources are sufficient for around 70 years of operations.
Video 1: The Chuquicamata mine