Here Jack, you need to learn to think outside your box...
JAPANESE FIRMS TO CONSTRUCT THEIR FIRST MINE IN CHILE
Sunday, 12 October 2008
Two Japanese conglomerates are planning to build their first-ever copper mine near Copiapó, Chile in Region III.
Nippon Mining and Mitsui already play an active role in Chile’s mining sector – partnering with the Luksic Group in Los Pelambres and with BHP Billiton in La Econdida. But the proposed Minera Caserones copper mine will be the first they construct and administer completely on their own.
Minera Caserones will supply three of the firms’ refineries in Asia with fine copper and molybdenum, a highly heat-resistant metal used in manufacturing. Experts say the mine should produce twice the amount of copper and molybdenum initially expected – nearly 150,000 tons of fine copper and 3,000 tons of molybdenum each year. They predict that Caserones will be a productive mine for 26 years, with a copper cash cost of less than a dollar per pound.
Like output, the mine’s price tag is also substantially higher than expected. Nippon Mining and Mitsui plan to spend US$1,700 million on the project; the initial budget was US$700 million. High energy costs and the mine’s remote location in the high Andes mountains are the primary reasons for the increase.
Caserones will require a huge amount of energy – 180 megawatts of electricity - to begin operating. This energy demand will probably force the Japanese companies to install their own generators near the mine. An even bigger challenge is water, which Caserones will also require in abundance. The companies have spent almost US$30 million to acquire rights to around 1,100 liters of water per second. Still, they have yet to solve difficulties associated with pumping the water to the mine, which is located at almost 4,000 meters above sea level.
Delivery problems aside, the water rights that the company currently owns are insufficient for Caserones to begin operating. The companies are therefore considering artificially stimulating rain and creating a public-private contract in which leftover water would be diverted to the Copiapó community. They are also considering buying water from the Salado River in Argentina, an option made less attractive by trans-Andean bureaucracy and international procedures.
Although Caserones faces many future challenges, CEO Nelson Pizarro said the project was not affected by the current international financial crisis. Caserones is a “long-term” investment made particularly attractive by the price of copper, which has stayed above US$2 per pound, said Pizarro.
Nippon Mining and Mitsui plan to present the project’s environmental impact study at the end of October. They hope to finish their feasibility study in May 2009, and pending the approval of the director, begin operation in 2012.
SOURCE: LA TERCERA
By Naomi Bryant ( editor@santiagotimes.clThis e-mail address is being protected from spam bots, you need JavaScript enabled to view it )
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