Because of energy issues, Salvador expansion is now only expected for 2017
05-Nov-2012 Diario Financiero – News
Codelco is carefully looking over solutions for its projects in Atacama
Because of energy issues, Salvador expansion is now only expected for 2017
San Antonio Oxides with an estimated investment of about US$1,000 million is also in standstill status
It was a fact that the expansion project at Codelco’s El Salvador mine would not get to 2015. So had it been foretold by CEO of the state-owned company, Thomas Keller, who additionally stated some time ago that this delay is mainly the result of a power supply issue that is affecting mining projects at Atacama Region which is worsening after the Castilla 2,100 MW thermoelectric plant was ruled out.
For this reason sources close to Codelco have confirmed that although the Board of Directors will be discussing the Salvador Expansion approval early 2013, there are no feasible signs now for the project to realize before 2017, furthermore, it has not been declined the possibility to extend even to 2018. This is far from the original goal Codelco had set to start this expansion in 2015 in order to increase the production level from 69,046 tons in 2011 up to 200,000 tons.
Salvador Division – located at Diego de Almagro in the Atacama Region – has been operating wince 1959 and is one of the oldest plants of the state-owned company. It has been dealing with official closing announcements because of mineral and grades aging. However, neither of these facts has been enough to hinder an expansion plan. If there is one single aspect in which Codelco may rely on it is the technical feasibility of carrying out the plan. At least so is said by sources close to the operation who indicate “thanks to surveys it has been considered to mine crushed mineral existing in the mine crater through an open pit operation”.
Salvador open pit has not yet achieved the prefeasibility stage (it is expected to go through this level early 2013) it is only at early stages of this survey yet. “At this point, reserves should be already measured”, a source commented.
By now, some sources in Codelco state they are looking for “innovative solutions” to manage the mine expansion as, in case the development expansion is not carried out and if current prices and production levels are steadily maintained, Salvador would be used up by 2020.
San Antonio Oxides: tied-up
The tied-up San Antonio Oxides project (US$962 million estimated investment) is located in the nearby of Salvador, in Potrerillos area. The project – that has been assigned a higher priority than Salvador and is aimed at producing 30,000 tons of copper fines – has been put on standstill condition because of the non-feasibility of competitively-priced power supply. “This project has been put on hold because it has been forecasted copper price will be lowering during the next years. On the other side, it must be considered that San Antonio project is not designed to withstand a high energy cost, a source reported while adding “it is normal that when facing a more restrictive copper price, high energy costs, and a highly-valued investment portfolio, a project is put on a standby condition to look for better solutions”.
