Name of the Project
Quellaveco copper project.

Location
The project is located in the Moquegua region of southern Peru.

Project Owner/s
The project is 60% -owned by Anglo American, with Mitsubishi Corporation a 40% strategic partner.

Anglo American’s marketing division will market the copper concentrate.

Project Description
Quellaveco is one of the world’s largest and most attractive undeveloped copper orebodies. Ore reserves of 1.3-billion tonnes containing 7.5-million tonnes of copper give Quellaveco a reserve life of 30 years, with potential for further extension given its estimated additional mineral resources of 1.6-billion tonnes containing six-million tonnes of copper.

Anglo American aims to expand the mine beyond its current 30-year reserve life and increase throughput above the initial capacity of 127 500 t/d to produce an average of 300 000 t/y over its first ten years of operation, at a cash cost of $1.05/lb of copper.

The project involves the building of a new 60-million-cubic-metre dam in the High Mountain region and a 95 km overland gravity-fed pipeline to deliver water to the Quellaveco mine area, where an opencast mine is being developed along with a primary crusher, overland conveyors and truck maintenance workshops, for which platforms are being completed.

During the first ten years of full production, Quellaveco is expected to produce an estimated 300 000 t/y of copper at a cash cost of $1.05/lb of copper.

Potential Job Creation
At the peak of construction, about 12 000 people are expected to be employed and 2 500 people will be employed permanently once the mine is in production.

Quellaveco has accommodation facilities for 9 000 people.

Net Present Value/Internal Rate of Return
The project has an after-tax internal rate of return of more than 15%, with a four-year payback from first production in 2022.

Capital Expenditure
The project has an expected capital cost of between $5-billion and $5.3-billion, and will be funded on an attributable basis – 60% by Anglo American and 40% by Mitsubishi.

Mitsubishi will prefund the first $500-million of Anglo American’s share of the capital expenditure.

Planned Start/End Date
First production of copper is expected in 2022, ramping up to full production in 2023.

Latest Developments
The project is 34% complete and on schedule for first production in 2022.

The project, which has been under way for 14 months following full notice to proceed on August 1 last year, is located in one of the world’s largest undeveloped copper deposits.

“The project is effectively procured out and contracted out. All the major contacts have been placed and all the major equipment has been procured,” Anglo American project director Christoff Kuhn has said.

A key accomplishment at Quellaveco is that the river diversion tunnel has been commissioned.

The barrier is visible and an improved quality and volume of water is already available to local communities.

Water for the operational phase is from two sources in the High Mountain region, with 80% arising from the Titire river, which was unfit for human, livestock or agricultural use, owing to naturally high levels of salt, boron and arsenic, and 20% coming from the dam and reservoir under construction.

A major structural cost advantage is that the orebody has been largely uncovered by river erosion and the overburden stripped by Mother Nature, leading to a very low strip ratio.

The tunnel system being built will transport ore from the mine to a concentrator plant in the valley next to the mine.

The flotation process will be used to produce copper concentrate, as well as a molybdenum by-product.

Allowances for coarse-particle separation have been made on the flotation circuits to make it relatively easy to incorporate the more efficient and lower water-consumption, higher technology into the system.

“That’s currently in the study phase and once that’s proven and the financial viability is guaranteed, we’ll probably proceed with that,” Kuhn has said. 

From the processing plant at Papujune, a second tunnel system will be used to transport tailings to an adjoining valley, where the starter dam is ahead of schedule for the rainy season. More than 90% of the earthworks at the processing plant have been completed.

Structural steel, imported from China, and some parts for the mining fleet, are on site.

Concentrate will be trucked 165 km to the port facility, where modifications will result in a dedicated shiploading facility for the project, located at energy company Engie’s facility, where there will be storage and a pipe conveyor.

Water-saving initiatives are apparent on site at Quellaveco, with evaporation balls already covering ponds to reduce evaporation exposure.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Too early to state.

Contact Details for Project Information
Anglo American investor relations Paul Galloway, tel +44 20 7968 8718 or email paul.galloway@angloamerican.com.