BHP Billiton approved an expansion play for the Escondida Mine in Chile that will increase production by 150 kt/a at a cost of nearly $US200 million.

The Australian reported that BHP Billiton will overhaul its Los Colorados concentrator which will allow the company to capture 100 kt/d of ore processing capacity for less than $US200 million. BHP had previously planned to remove that concentrator in order access ore beneath it.

The new plan comes in at less than one-tenth the capacity cost of the 150 kt/s Organic Growth -Project 1 concentrator, approved at a cost of $US3.8 billion in 2012, originally planned to go after the high-grade ore located under Los Colorados.

“This is amazingly high capital efficiency,” BHP head of American mining operations Daniel Malchuk said of the Los Colorados extension. “As you can imagine the return is very high — it’s north of 100 percent.”

No extra mining will be required; instead more ore will be processed through the concentrators, rather than sent to Escondida’s sulphide leach circuit, where rates of copper recovery from ore are about half that of the concentrators. The Los Colorados extension was approved by the Escondida partners, BHP (which owns 57.5 percent), Rio Tinto (30 percent) and Japan’s JECO (12.5 percent) on June 30, just meeting a previously announced 2016 financial-year target.

The previous plan had been to pull down Los Colorados, enabling access to higher grade ore once the OGP 1 concentrator was finished last year.
But through some innovative mine planning, which included making the pit wall steeper, higher-grade ore will now be accessed without demolishing Los Colorados until at least 2030.

That effectively gives Escondida average extra annual copper production of 150 kt and helps keep costs near $US1 per pound as the big mine’s overall grades decline.

Los Colorados is one of four “latent capacity opportunities” outlined by Mr Mackenzie in May that are expected to provide 1 Mt of “copper equivalent volumes” — 10 percent of BHP’s group production — for $US1.5 billion of capital spending.

The others, which have internal rates of return of 60 percent or more, are expansion of West Australian iron ore operations to 290 Mt/a, an expansion of the Caval Ridge coking coal mine in Queensland and improved leaching at the Spence copper project in Chile.

The Los Colorados extension, which involves a plant overhaul, moving some infrastructure and tailings dam modifications, will add another 200 kt of copper production in the early years after it comes on line at the end of 2016-17.

This coincides with the start-up of a $US3.4 billion desalination plant at Escondida, which will allow more water with which to process the ore.
Escondida is targeting average production of 1.2 Mt/a over the next decade, increasing from about 940 kt in 2015-16.