Engineering & Mining Journal

APR 2013

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REGIONAL NEWS - LATIN AMERICA Codelco Budgets $5B+ for 2013 Capital Investments Vale Stops Work at Rio Colorado, Draws Fire from Argentine Government As part of Codelco's planned 2013 capital spending budget, work will continue on principal access and ventilation tunnels and ventilation shafts at the Chuquicamata underground project. Codelco announced on March 1, that its capital expenditures during 2013 will exceed $5 billion, up from $4.168 billion in 2012. Approximately $2.29 billion of the 2013 total will go toward three major development projects: $1.155 billion for the new Ministro Hales mine, $716 million for the new mine level at El Teniente, and $417 million for the Chuquicamata underground project. These three projects are slated to make major contributions toward Codelco's long-term goal of maintaining is position as the world's leading copper producer. The Ministro Hales project includes an open-pit mine, concentrator, roaster, smelter and refinery. Production ramp-up is scheduled to begin in October 2013, moving toward design capacity of 183,000 mt/y during 2014. The project is located near the city of Calama in Region II of northern Chile. Ministro Hales has a total resource of 1.3 billion mt at an average grade of 0.96% copper. Current planning calls for 282 million mt to be mined by open-pit methods. Mine production is planned at 50,000 mt/d. At El Teniente, work on the new mine level during 2013 will focus on mine development and excavation of the two primary access tunnels, one for use by employee transport buses and the other 20 E&MJ; • APRIL 2013 for the ore conveyor belt, a service track, and an alternative emergency exit. The project will extend mine life at El Teniente by 50 years following startup in 2017. The new level at El Teniente is based on 2.02 million mt of reserves at grades of 0.86% copper and 0.022% molybdenum, equivalent to 17 million mt of fine copper. The new level is scheduled to produce 137,000 mt/d of ore and 430,000 mt/y of fine copper, maintaining existing capacity at the mine. An option remains open for later expansion to 180,000 mt/d. At the Chuquicamata underground project, the feasibility and early works stage is nearing completion. Work will continue during 2013 on the principal access and ventilation tunnels and ventilation shafts, along with other work. Ore reserves under the existing Chuquicamata open-pit are estimated at 1.7 billion mt grading 0.7% copper and 502 ppm molybdenum. The mining rate is planned at 140,000 mt/d, equivalent to production of 366,000 mt/y of fine copper and 18,000 mt/y of molybdenum. Other development projects that will receive attention from Codelco during 2013 include the Radomiro Tomic sulphides phase II project and the Andina 244 expansion. Vale reported in mid-March 2013 that it had informed the government of Argentina that it was suspending implementation of its Rio Colorado potash solution mining project in Mendoza province, Argentina, because "in the current macroeconomic environment, the economics of the project are not in line with Vale's commitment to discipline in capital allocation and value creation. In case of resuming the implementation, preference will be given to the project's current employees." Vale said it would continue to honor commitments related to the Rio Colorado concessions and would look for alternatives to enhance the economics of the project, which might lead to a renewal of project construction. The government responded by ordering the company not to fire any workers and not to initiate any work to dismantle the project. Subsequently, Vale said the estimated cost of the project had approximately doubled to $11 billion and told the project's top directors to leave Argentina for "security concerns." Vale's 2013 capital expenditures budget had included $611 million for the Rio Colorado project. The project includes renovation of 440 km of railway tracks, construction of a 350 km railway spur, and construction of port facilities at Bahia Blanca, Argentina. The first phase of the project was slated to produce 2.4 million mt/y of potash beginning in 2014, with a second phase planned to lift production to 4.3 million mt/y. Atacama Pacific Advancing Cerro Maricunga Atacama Pacific has received a positive, NI 43-101-compliant preliminary economic assessment (PEA) for its 100%-owned Cerro Maricunga oxide gold project in Chile from NCL Ingeniería y Construcción SA, of Santiago. The PEA describes an openpit/heap-leach project producing 2.7 million oz of gold over a 10-year mine life at estimated operating cash costs of $652/oz. Production over the first five years is projected at 298,000 oz/y. www.e-mj.com

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