Chile’s Codelco, the world’s No. 1 copper producer, is closer
to securing a long-awaited deal with Ecuador-controlled miner Enami EP, which
will allow them to jointly develop a massive project located about 80 km
northeast of the country’s capital, Quito.
The 982-million-tonne Llurimagua copper project, in the northern
Imbabura Province, is in the advanced exploration stage and could become the
first mine the Chilean giant operates abroad.
Construction should begin shortly after the board of Llurimagua
Copper Company S.A., the 51%-49% joint venture between Codelco and Enami, approves
the agreement that formalizes the entity.
That announcement, local
paper El Mercurio reports, is expected to come this week.
Codelco and Enami first signed a cooperation agreement about
a decade ago, but the companies only began
talking about Llurimagua in 2015.
According to Ecuador’s vice minister of mining Fernando
Benalcázar, the project is one of the copper industry’s “crown jewels”, but
its development has faced challenges, including intermittent resistance from
nearby communities over environmental concerns.
“Having this deposit in our soil and partnering with the
world’s number one copper company, open the doors for development technology, employment
opportunities and economic growth. This project can change the lives of
Chileans and Ecuadorians,” Benalcázar
said earlier this month.
“Today, the Llurimagua deposit is completely different than
in 2015. The Junín target lead us to discover 1km continued mineralization,” Codelco’s
exploration team leader, Angelo Aguilar, added.
Construction at Llurimagua is expected to take up to four
years. Once at full tilt, the mine is expected to churn out 210,000 tonnes of
copper annually over a 27-year productive life.
To date, the miner has spent about $40 million in exploration
and plans to invest another $3 million by 2021. From that figure, $131 million
will be destined to Llurimagua.
From Explorers’ Hotspot to Copper Producer
Ecuador, the new darling of copper prospectors, expects
to attract $3.7 billion in mining investments over the next two years, up
significantly from the $270 million it received in 2018.
The country is moving forward with plans to move from an
explorers hotspot to mining exporter as its only large-scale copper mine, readies
to ship its first large cargo this month.
The $1.4 billion Mirador open-pit mine, owned by a joint
venture of Tongling Nonferrous Metals Group and China Railway Construction
(EcuaCorriente), opened in July, but has turned out to be a “headache for the
government,” Benalcázar said in a presentation in Chile’s capital Santiago last
week.
The authority said the copper-gold mine has been suspended
three times since construction due to workers’ safety issues. “For the
operators, safety is not a priority and we had to make big efforts to tell them
that Ecuador has rules to follow,” he said.
Canada’s Lundin Gold (TSX:LUG), which has been developing
its Fruta del Norte gold-silver project for almost two years, has produced its doré
and gold concentrate, and is on track to beginning commercial activities in the
second quarter of 2020.
Other than Llurimagua, another two major copper projects are
due to be in production by 2024: SolGold’s
(LON, TSX:SOLG) Cascabel and Lumina
Gold’s (TSX-V:LUM) (OTC:LUMAF) Cangrejos.