One out of four large-size mining projects will be postponed adding up US$39,000 million
03-Dec-2012 Diario Financiero – News
Since last survey made by Cochilco in June
One out of four large-size mining projects will be postponed adding up US$39,000 million
Chilean Copper Commission states there is not a production objective set for 2020 and investment goal has been deferred in two years
Mining projects are moving. Start-up dates reported by companies are varying each week and for this reason, Cochilco had to make a special survey to issue their monitoring update in November. As background information, it must be said that Cochilco makes this survey once a year in June.
For the June-November period Cochilco reports 11 out of 45 projects (24% of total) included in the investment portfolio of large-size gold and copper mining have been postponed or deferred. These projects add up an investment of US$39,000 million.
Per this list, postponed projects are: Collahuasi Phase III (Xstrata and Anglo), Quebrada Blanca, Relincho (Teck), Inca de Oro (PanAust), Andina Phase II, Oxides San Antonio (Codelco), Santo Domingo (Capstone Mining), Pascua Lama, Cerro Casale (Barrick Gold), El Morro (Goldcorp) and Lobo Marte (Kinross).
From this list, only one project is not going through feasibility stage. It is Collahuasi Phase III (Pre-feasibility), consequently, as per the opinion of Andrés Mac-Lean, Executive VP of Cochilco, “the certainty degree of these postponed initiatives is very high and they will probably be all carried out”.
Reduced installed capacity
He also said “from the US$104,000 million investment initially forecasted for 2020 nothing has been changed. No project has been taken off, the only thing is that they will not be accomplished in eight years for 2020 but for 2021 or 2022, which means installed capacity envisioned for 2020 will reduce from 8.4 million tons to 8.1 million tons”. Mc-Lean also added “there is no productive goal set for any particular date by Cochilco”, and he cleared up “we talk about production installed capacity because we will never achieve a production like that for 2020”.
The highest investment
Amongst postponed projects, those with highest investment are Collahuasi Phase III with US$6,500 million, Andina Phase III, US$6,441 million, Cerro Casale, US$6,000 million, and Hypogene Quebrada Blanca, for the amount of US$5,590 million.
Some issues that were not completely defined were not considered in the Cochilco survey, as it is the case of the possible investment increment in Pascua Lama that could go from US$7,500 million originally set up to US$8,500 million. Status change and investment increment of two projects recently submitted at the Environmental Evaluation Service: Jerónimo, de Yamana Gold that increased investment from US$ 300 million to US$423 million and Diego de Almagro, Copec, that moved to the feasibility stage and increased investment amount from US$227 million to US$475 million.
Some factors that may explain the delay go from the need to secure electric power supply to costs lower than prevailing costs until the environmental impact study is completed. Besides, in some cases, feasibility study results would not be favorable because of the high costs considered for investment and/or operation.
