Partner of Codelco evaluates triple production at El Abra
Expansion of the operation, in which the state company is associated with the U.S. Freeport, which has 51%, will force the Chilean to disburse 49% of the investment, or, diluted.
The El Abra mine operation jointly owned by Codelco and the American Freeport McMoran- successor to Phelps-Dodge, could long pants in the coming years.
Known is the intention of the U.S., which is the operator of the mine, to execute a plan to expand the production of this site. However, this initiative so far remained neglected compared to other investments of the company, besides the mining sector is investing heavily in the oil and gas.
However, the company has begun to reveal some details of the project which aims to develop in El Abra.
According to its latest corporate presentation, released a few days ago, the company sees a potential to reach a production level of 1 million pounds of copper per year in El Abra, which is equivalent to 453 thousand tons. This would represent growth to triple from 155 600 tons in 2013.
If realized this project, El Abra would reach a level of production similar to El Teniente, Los Pelambres, the Los Bronces or Collahuasi, they get today, four of the most productive mines in the Chilean mining.
Sharing Costs
To realize this initiative it would require a huge investment. While private mining has not disclosed the amount involved, the extension of El Abra is still in the design stage, so there is no official estimate-in the mining sector is believed that a project of this magnitude would cost not less than U.S. $ 5,000 million or even more.
Who should fund this project? Being a company, the cost of the expansion will be funded by both shareholders in proportion to the share of each in El Abra, ie 51% of the cost must be borne by Freeport McMoran and 49% by Codelco.
Freeport, a company led by former Chilean Mining Council President Francisco Costabal has kept this project under wraps, hoping for more concrete definitions to incorporate into their base of final projects. Thus, in his last appearance the company only refers to the potential of El Abra, while other projects like Morenci (in the U.S.) are ready to go and Cerro Verde (Peru) and Tenke Fugurume (Congo) are already being construction
For Codelco, knowing the final cost is extremely important for two reasons. The first one is that their participation in El Abra allows them to add about 75 thousand tons to its annual report. Last year, the contribution of El Abra accounted for 4.3% of the total production of the state company, with 76,244 tons out of a total of 1.79 million tons.
The second concern is the fact that the corporation will finance 49% of the expansion, which will push further its capital requirement, just as Codelco is devoting almost all of its investment budget to the completion of their projects structural. The state is expected to formalize the project to analyze in detail.
Source: Pulso
