Revista Nueva Minería

Economies of scale can concentrate on building a water desalination plant and electricity supply. The first approaches were in 2009. Last week retook the analysis

An important decision is evaluating the Codelco State mining to cut costs on one of their projects called structural: Radomiro Tomic expansion, in Region II, which includes going to the exploitation of sulfides after the end of the useful life of the oxides, by 2018. The initiative includes U.S. $ 5,400 million and of that amount $ 1,500 million will go to the construction of a desalination sea water plant for their operations, which with a capacity of 1,600 liters per second, will be the largest in the mining sector . One option is to approach the building with Freeport McMoran, its partner in El Abra, the main site of the U.S.Company in Chile and which in 2012 produced more than 136 000 tons of copper.

Freeport, in Chile led by former President of the Mining Council, Francisco Costabal is also evaluating the use of this technology for El ABra expansion plans, which is about 30 kilometers from Radomiro Tomic, who also exploit their sulfur resources in order to increase at a long-term,its production of about 300 thousand tons of copper per year.

Preliminary analyzes from the US Company estimate that investment to expand the site would reach about U.S. $ 5 billion. The value includes the construction of a desalination plant in Tocopilla. But for that, the company also have to build a mineraducto to load the ore to be exported.

Given this scenario, Codelco wants to resume talks which began with Freeport in 2009 to analyze synergies with Radomiro Tomic Phase II, who is now in feasibility, and El Abra Mill project, pre-feasibility stage.

First Approaches

In 2009, Codelco envisaged the creation of a technical committee in the state Company headed by Sergio Gaete, then Radomiro Tomic sulphides Development Manager, who worked with executives of El Abra for possible synergies in their future growth. At the beginning of the talks, Freeport proposed joint construction of a concentrator plant, essential unit for the production of copper, as both mines require a new unit capacity ranging between 200 000 tons and 240 000 tons of ore per day. At that time also spoke of sharing a port in Tocopilla, and one tailings dam, according to executives familiar with these approaches. On that occasion, were expected synergies over U.S. $ 1,000 million.

The committee met throughout the year and even conducted a feasibility study. There was also a meeting between then Santiago Codelco CEO, José Pablo Arellano, and President of Americas division of Freeport, Harry Conger. But the idea was rejected and the work was frozen for two years. The state in recent weeks resumed talks to see possibilities of working together.

Intentions to seek synergies were confirmed by Codelco. “There are possibilities of working together in this task. Radomiro Tomic and El Abra are neighbors. There are issues that are being seen for the long term, anything with an impact in the next three or four years, “confirmed Thomas Keller consulted by La Tercera. The work as a whole could also be in the energy sector, he said.

Meanwhile in Freeport McMoran, confirmed that “concentrator pre-feasibility studies consider the use of desalinated sea water, for which a plant would be built around Tocopilla. Currently there is no definition on the size of the concentrator plant facilities. “

New Meetings

Last week, at the board of Directors of El Abra, where Codelco has a presence because it controls 49% of the project, they discussed the issue of resuming the analysis to look for synergies, according to executives to both approaches.

The mining, sources explained, would be looking at a new location for the desalination plant, vital point to progress in other areas of work.

One of the crucial aspects of building of infrastructure is the pipes which would have to be build to boost desalinated water to the mine. “That point is complex, because El Abra is taller than Radomiro Tomic,” says an industry executive. Preliminary estimates indicate that El Abra would require about 500 liters per second of water to supply its future operational needs.

As explained by the State Company the admission to environmental processing expansion project Radomiro Tomic, the plant is 14 kilometers south of Tocopilla. Water will be conducted at the premises of RT, at 3,000 meters above sea level, through a pipe 48 “in diameter and a length of 160 kilometers.

One issue that could hinder the approaches are the execution times of expansion projects. Codelco wants to start operating the second phase of Radomiro Tomic from 2017. El Abra, however, is still in pre-feasibility stage and the second stage of the studies will end until mid-2014.

In the energy sector, potential synergies are not yet formally talk. Codelco is promoting the construction of a natural gas Central in Mejillones: Luz Marina, of 760 MW capacity, for $ 758 million. One option is to ensure a future supply contract who is awarded the construction work, sources in the industry, and indicate that Freeport would have a pre-agreement contract with an electricity in the area.

Another alternative is to increase the presence of Codelco in the Mejillones LNG, where it has 37% and GDF Suez holds 63%. This, in order to be assured the fuel supply. This issue would not be less, indicated the sources. Codelco and consuming LNG minings- Collahuasi, Escondida and El Abra-initiated a survey with Mejillones Terminal by splitting usage capabilities of the terminal and fee associated with that use.

In April, the process was terminated by the state Company which reached an agreement with GNL Mejillones, which considering the use of services regasification LNG for a period that may be extended to 2045.

One of the highlights in this agreement, indicating the sources, would be the transfer to El Abra made your rights to use the terminal, leaving Codelco in better bargaining position.

Source: La Tercera