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Chilean miner announces good and bad news

20th March 2015

By: Keith Campbell

Creamer Media Senior Deputy Editor

  

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London Stock Exchange-listed Chile-based copper miner Antofagasta, a FTSE 100 company, last week announced that it had resolved a dispute with local communities at its Minera Los Pelambres subsidiary regarding local water supplies, an issue brought on by a continuing drought. Protestors had been blocking access to the mine.

The agreement that ended the dispute was announced on March 11. “As part of the agreement, Los Pelambres has agreed to contribute funding for the study of a desalination plant project, which would be developed under a public–private alliance or public concession scheme,” stated the group in a press release. Construction “Pelambres also agreed to contribute funds to complete studies for the construction of a water dam for local use, which, if constructed, would also be developed under a private–public alliance. “Finally, Pelambres also agreed that it would use seawater for any further expansions of its mining operations.”

The deal was concluded after several days of negotiations between the company, the local community, regional authorities and the national government. Los Pelambres expects that the protests will cost it 8 000 t of copper production for this year. It will seek to mitigate the impact of this loss during the remainder of 2015. Damage Off-site company infrastructure is being evaluated for any damage.

A few days earlier, the company had received not so good news. The civil court in the coastal port town of Los Vilos had informed it that its plan to fufil a Supreme Court ruling regarding a tailings dam at the mine and the Pupío stream was inadequate. (Los Pelambres and Los Vilos both lie in Choapa province, in the Coquimbo Administrative Region, to the north of Chile’s capital, Santiago.)

Back in October last year, Chile’s Supreme Court had ruled that the El Mauro tailings dam, at Los Pelambres, threatened the natural flow and quality of the Pupío to the town of Caimanes. In November, the company submitted a plan to ensure the maintenance of the stream’s natural flow and quality. This plan has now been ruled as inadequate by the Los Vilos court, which has determined that part, or all, of the tailings dam wall must be demolished.

“Los Pelambres has undertaken significant works to ensure that the flow of the Pupío stream is not altered and that the operation of the tailings dam does not affect the quantity of these waters and believes the implementation plan submitted to the court went beyond these requirements,” asserted Antofagasta in a press release. “Los Pelambres will appeal the court’s decision and will continue to comply with all applicable laws, regulations and controls. “The decision of the Appeal court can itself be appealed by either party. “Los Pelambres is entitled to continue operating the dam until the appeal process is concluded.”

Los Pelambres is the sixth- biggest copper producer in Chile and the seventh-most important in the world. It lies at an average of 3 600 m above sea level, some 120 km from Los Vilos. Its output includes molybdenum, gold and silver as byproducts. Some 84 000 people in 40 communities live in the surrounding area.

Antofagasta has reported that Los Pelambres produced 391 000 t of copper (in concentrate) last year. Consortium This is total production, not Antofagasta’s 60% share (40% of Los Pelambres is owned by a consortium composed of Nippon LP Investment, Marubeni and Mitsubishi LP Holdings). Before the recent protests, the mining group was expecting Los Pelambres to produce 385 000 t this year.

Antofagasta’s other operations in Chile are Centinela (created by merging the previous separate Esperanza and El Tesoro operations), which produced 267 000 t of copper last year and is forecast to produce 255 000 t this year, and Michilla (47 000 t of copper produced in 2014 and 30 000 t forecast for this year). The group is also developing the new Antucoya project. It also owns projects outside Chile, as well as railways in Chile and Bolivia and a water company in Chile.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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