PERTH (miningweekly.com) – Diversified miners BHP Billiton and Rio Tinto have agreed to a joint $3.8-billion investment that would increase copper production at their Escondida operation, in Chile, over the next ten years.

The two miners on Tuesday announced the investment in the Organic Growth One project, which would replace the Los Colorados concentrator with a new 152 000 t/d plant, and would allow access to higher-grade ore located beneath the existing facilities.

Construction of the new plant would start this month, with commissioning expected in the first half of 2015.

BHP, which holds a 57.5% stake in the copper mine, would foot some $2.2-billion of the bill, and Rio, which owns 30%, would add a further $1.2-million to the kitty. The balance of the project is held by Chilean companies.

The two mining majors have also approved the Oxide Leach Area Project (OLAP), which would involve the construction of a new leaching pad and a mineral handling system that will include several overland conveyors.

The new pad would maintain oxide leaching capacity at current levels, following the exhaustion of the existing heap leach in 2014. The OLAP would require a capital expenditure of some $721-million, of which BHP would provide $414-million and Rio $216-million.

Commissioning of the OLAP is expected in the middle of 2014.

“We expect the completion of the current Escondida ore access and Laguna Seca debottlenecking projects, and a strong recovery in ore grades, to support a substantial recovery in Escondida copper production to over 1.3-million tons a year in the 2015 financial year,” said BHP’s base metals president, Peter Beavan.

BHP also announced a 17% increase in the mineral resource, and a 25% increase in the ore reserves at Escondida, following successful brownfield exploration and accelerated in-fill development drilling programmes.

The reserve increase also reflected the approval of the Organic Growth One project, as most lower-grade sulphide ore was now expected to be treated through the flotation circuit with an associated increase in process recoveries.

“Looking ahead, the success of our brownfield exploration programmes suggest there are sufficient resources at Escondida to sustain production at current levels for more than a century,” said Beavan.

He noted that the Organic Growth One project was the first of a series of potential projects that could “substantially” expand processing capacity at Escondida, and assist in ensuring that the project remained the world’s leading copper operation for decades to come.

To subscribe to Mining Weekly's print magazine email subscriptions@creamermedia.co.za or buy now.