The operator of the world's largest combined copper and zinc mine, Compaņia Minera Antamina, in which BHP Billiton, Xstrata and others have a stake, plans to invest almost $1.3 billion to expand mining and processing capacity at its massive copper and zinc mine in northern Peru.
The Antamina copper-zinc mine in Peru's Ancash region, in which Anglo Australian miner BHP Billiton and the Switzerland based Xstrata hold 33.75 per cent each, with Canada's Teck Resources and Japan's Mitsubishi Corporation holding 22.5 per cent and 10 per cent respectively, have all approved their share of capital spending required to expand mining and processing capacity at Antamina yesterday.
Antamina started operations in 2001 with all four companies jointly investing an initial $2.3 billion - the largest investment in the history of Peruvian mining. The mine has been producing copper and zinc concentrates, as well as lesser quantities of molybdenum and lead / bismuth concentrates.
In November 2008, Antamina announced a 77-per cent increase in mineral reserves to 745 million tonnes following an intensive in-pit exploration programme. This increase was incorporated into the expansion feasibility study, enabling Antamina to approve the expansion of processing capacity and extend the mine life by six years to 2029.
The expansion will require the acquisition of new mining equipment, an expansion to the truck workshop and concentrator plant, the construction of a new 55 kilometre electric power transmission line, and enhancements to the current water management and tailings storage systems.
The expansion will create 2,726 jobs in the construction phase and 500 additional permanent positions. Construction will commence in the first quarter of 2010 and the project is scheduled to be commissioned in the fourth quarter of 2012.
When the project is completed in 2012, the partners expect the metal ore processed to increase by 38 per cent to 130,000 tonnes a day, and annual production of copper and zinc to increase by around 30 per cent.
Copper prices have been projected to rise in the next three-to-five years, as most of the global copper mines have become aged and new mines have output of declining grades.