Mining projects worth more than U.S. $30,900 million suffer further delays
Within displaced updating developments, it is Collahuasi expansion, as well as Andina Expansion.
Further delays in the estimate start-up of nine projects of great local mining found the international consultancy CRU. Of these, six total more than U.S. $ 30 900 million investment, and the rest (Gabriela Mistral sulphides, Zaldivar and Cerro Colorado) do not have a tentative amount of investment.
According to CRU, the economic variant (returns, cost and price) and capital (availability of funds) influences all delays, especially in Sulphides El Abra (Freeport McMoran), Sulphides Zaldivar(Barrick Gold) and development Centinela mining district (DMC). This latest project is already known to need about $ 2,700 million, and this year was confirmed by the same controller, Antofagasta plc, which would be launched in 2019 instead of 2017. Meanwhile, El Abra Sulphides would be trapped as Codelco has a 49% ownership, and the state company would have the priority investment in structural projects, where El Abra is not listed.
Unlike previous developments, where economic factors have been clearly dominant, according to CRU there are other variables that also affect the delay, among which include the opposition of communities, environmental permitting problems, prioritization of projects within portfolio companies and delays in studies by technical complexities.
Case by case
Long time Collahuasi (company 44% linked to Anglo American, 44% to Glencore and 12% to Mitsui) is delaying the decision to move forward with the expansion of its site, which would mean an investment of $ 6,500 million. What is clear is that the project had to wait, because the focus of the company has been in the process of standardization of their operations, after complications suffered in 2012 and began to rebound in 2013. The planned schedule until last year for the start of operations of this mega project was 2019, however the CRU recently updated to operate in 2022. Issues of corporate strategy would also trigger the delay of Cerro Casale (Barrick Gold and Kinross Gold), of about $ 6 billion by 2021.
Moreover, the expansion of the Andina Project (U.S. $ 6800 million) from state company Codelco, has been in the crosshairs of communities and municipalities where the development will be located. Codelco is currently in the process of answering the first ICSARA within the environmental assessment process. According to Data and CRU analysis, the project will become operational in 2021 instead of 2020, this due to the “great capital investment required and the environmental challenges traversing the company,” explains Erik Heimlich, CRU Copper Team Senior Consultant.
In the case of El Morro, from U.S. $ 3,900 million (Goldcorp and New Gold), “part of the delay-of 2019-2021 – is widely known by issues with communities but also influences the economic issue”, said Heimlich.
According to CRU, the transition to sulphides in Gabriela Mistral (Codelco) and in Cerro Colorado (BHP Billiton) “has been losing priority in investment portfolios compared to other projects”.
Source: Diario Financiero
