Canadian junior Los Andes Copper
(TSX-V: LA) is moving forward with plans to build a 110,000 tonne per day
operation, which it believes will be Chile’s next major copper mine.
The company’s Vizcachitas project —
a copper-molybdenum porphyry deposit 150 km northeast of Santiago — is one of
the largest undeveloped deposits not held by a major mining company.
The proposed open-pit mine and
concentrator is located at a relatively low elevation of 2,000 metres above sea
level, and is just 65 km from a railway in San Felipe, with connections to the
Port of Ventanas and two smelters, located 140 km and 90 km from the deposit.
It also sits in the same mineral
belt as Antofagasta’s Los Pelambres, Codelco’s
Andina and El Teniente, as well as Anglo American’s Los Bronces mines.
“The advantageous size and location of the resources allow the development of the project with a potential lower capital investment in infrastructure than most of the presently considered potential new green-field developments,” executive chairman, Fernando Porcile, told MINING.COM.
The Vizcachitas project copper-molybdenum porphyry deposit sits in the same mineral belt as Antofagasta’s Los Pelambres, Codelco’s Andina and El Teniente, as well as Anglo American’s Los Bronces mines.
After the recent publication of a preliminary
economic assessment (PEA) for the project, released in June, management is
preparing a prefeasibility study (PFS) that expects to submit by the end of
2020. If all goes well, the company expects the approval process to take about
two years.
Based on the PEA, Vizcachitas would
be in operations for 45 years and would require an initial investment of $1.87 billion.
Chile’s President Piñera recently submitted to Congress a series of modifications to a bill introduced earlier this year.
The proposed law would set stiffer fines and jail time for serious violations of the country’s environmental rules.
It would also make it a crime to mislead environmental inspectors or to obstruct the enforcement of environmental regulations in the world’s top copper producing country.
Referring to those developments, Porcile said that while
the proposed modifications could eventually bring additional
difficulties to the approval of projects, they reflect the need for companies to
increase their commitment to environmental compliance.
“The mining sector in Chile has been heavily regulated for a long time,”
Porcile noted. “These changes are being particularly resented by industries
that have not been properly supervised in the past and need to adopt more
drastic cultural changes.”
The South American nation is highly dependent on mining and the
government is conscious that more projects are needed, said Porcile, who
has been in the mining business for more than 50 years.
Copper output in Chile, the leading producing nation, is expected to exceed 6 million tonnes for the first time this year and continue to rise by about 30% over the next 10 years, according to the country’s state copper agency, Cochilco.
Output of the red metal, the agency
says, could reach a record of 7.25 million tonnes as early as 2025, thanks
mainly to new projects and planned expansions to come online this decade, as
Chilean miners confront falling ore grades at older mines.
Production from existing, aging
mines, Cochilco notes, will decline by 19% to 4.46 million tonnes annually, but
the drop will be offset by new ventures and mine expansions.
The metal’s price has dropped by about 10% since April, following a trend that many commodities have seen amid global economic instability, hunger for the mineral has weakened.
Analysts, however, remain generally bullish about the red metal’s future as China’s push to develop the largest electric vehicle (EV) industry in the world. This effort means Chile’s copper industry, worth $31.5 billion a year, may soon become stage a major comeback.