Engineering & Mining Journal

AUG 2018

Engineering and Mining Journal - Whether the market is copper, gold, nickel, iron ore, lead/zinc, PGM, diamonds or other commodities, E&MJ takes the lead in projecting trends, following development and reporting on the most efficient operating pr

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Page 64 of 107 E&MJ • AUGUST 2018 63 MINING IN PERU sized underground operations. With the on- going expansion at the Marcapunta mine, for instance, Buenaventura's El Brocal operation narrowly beat Nexa Resources' Cerro Lindo as the country's largest underground copper producer (both are in the 45,000 mt/y range). Meanwhile, Condestable, operated by South- ern Peaks Mining, yielded 22,000 mt of cop- per in 2017. Víctor Gobitz, CEO of Buenaventura, was enthusiastic about El Brocal's future potential, as Buenaventura has eliminated the commer- cial restriction that El Brocal's arsenical cop- per used to have: "There is an opportunity to go from room and pillar to a different mining method that also extracts the ore from those pillars. If we are successful doing that, the Marcapunta mine could grow up to 20,000 mt/d," he affirmed. Marcapunta is already ex- panding from 8,000 mt/d to 13,000 mt/d by the end of this year. Southern Peaks Mining has also intro- duced new mining methods as a way to im- prove both productivity and efficiency, with a focus on mechanization at Condestable, and is increasing its daily throughput from 7,000 mt/d to between 9,500 mt/d and 10,000 mt/d. Adolfo Vera, Southern Peaks Mining's CEO, said: "We started treating the previ- ously known mantos as ore bodies and, for that, we needed to know the geometry in each particular ore block prior to mining. We then designed the drilling and blasting scope with the knowledge produced from the geology in- fill findings. That has given us incredible re- sults as we have introduced long hole mining into 80% of our operation, and dilution has decreased by 75%." The C1 cost at Condestable is US$1.55/ lb and, with the expansion, it can be reduced to US$1.25/lb, according to Vera. Beyond productivity, one of Southern Peaks' main ob- jectives last year was to double the reserve base and prepare for the company's future IPO. "The exploration is rendering great re- sults as well, and we expect to be mining at Condestable for more than 20 years," Vera concluded. Looking at the general picture, Peru's cop- per production continued to close the gap with Chile, that saw its red metal output decrease slightly to 5.5 million mt/y in 2017. The Pe- ruvian government has set a goal of increasing copper production by 30% by 2021 to further cement Peru's position as the second largest producer of copper globally. The expansion of Toromocho, operated by Chinalco, and the construction of the Quellaveco and Mina Justa greenfield projects are the main highlights in Peru's expanding copper production. Juan Luis Kruger, CEO of Minsur, owner of 60% of Mina Justa, ex- plained the latest steps on what will be the company's first copper mine: "Last year we decided to do some early works and lock in the price and delivery times of the critical equipment. The idea is that, by the time we secure the full financing for the project, we are ready to go and we can shorten the time to market. Meanwhile, we have completed 70% of the detailed engineering to reduce the execution risk." Kruger described what he sees as the main advantages of Mina Justa: "It is a world-class ore body in prime mining real estate, just next to the Pan American highway and close to the sea and power infrastructure. It is also going to be a sustainable project, that will only use seawater for its process." Mina Justa should be in production around 2020, with an average output in the range of 100,000 mt/y over the mine's life. Zinc With respect to zinc, Antamina regained top spot in production with a 69% increase in output, representing 442,500 mt/y of zinc. The spectacular change is probably explained by the erratic nature of the geology in skarn deposits, as well as a conscious decision by the company to boost zinc output and take advantage of the current high prices. Antam- ina's exceptional performance helped Peru's overall zinc production increase by more than 10%, to a total of 1.47 million mt/y. Antamina is 33.75% owned by Glencore, that also recently took over a controlling stake in Volcan, Peru's second largest zinc producer with around 288,600 mt produced last year. Finally, Nexa Resources of Brazil (formerly Milpo-Votorantim Metais) produced 229,600 mt/y, the majority of which came from Cerro Lindo, Peru's largest underground operation. Ricardo Porto, CEO of Nexa Resources, highlighted the importance of Cerro Lindo as the only operational mine in Peru currently us- ing seawater for its process: "Cerro Lindo can be seen as a reference for how Nexa intends to Javier Del Rio, VP South American Business Unit, Hudbay Minerals.

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