Chile is already the world's largest producer of copper and home to around a third of global reserves of the red metal. That has led some to suggest that the country's exploration potential may have peaked. But that's not what the latest discoveries suggest.
In recent years, companies have reported several new discoveries that could support new copper mines or breathe new life into existing operations.
While exploration in most countries is dominated by junior firms, the scale and history of Chile's mining industry, as well as a rather illiquid market for mine concessions, means that majors are often the most important investors in drilling and other exploration work here.
Recent discoveries bear that out.
Last October, Anglo American (AAL-L, AAUKY-O), and Xstrata's (XTA-L, XSRAY-O) Xstrata Copper unveiled their West Wall discovery by a joint venture between the two mining giants. The latest estimate shows that the deposits contain 750 million tonnes of inferred resources grading 0.54% copper and 0.01% molybdenum, implying a content of 4 million tonnes of the red metal. It also contains an average of 0.5 gram gold per tonne.
The copper porphyry type hydrothermal alteration at West Wall covers a 7-km by 30-km area, though so far exploration has
focused on the southern part of the prospect where sulphide resources are associated with porphyric intrusive bodies.
Located in central Chile's Valparaiso region, the deposit lies 70 km from the giant Rio Blanco deposit exploited by Anglo American and state-owned Codelco (via the Los Bronces and Andina copper mines respectively).
The West Wall discovery follows soon after Anglo American's major Los Sulfatos discovery, just 6 km from Los Bronces. It contains 1.2 million tonnes of copper, with an average grade of 1.46% copper and 0.02% molybdenum. A second deposit named San Enrique Monolito, adjacent to the Los Bronces mine, contained 900 million tonnes of resources grading 0.81% copper and 0.02% molybdenum.
Anglo American, which is due to complete a major expansion of the Los Bronces operation later this year, is now working on excavating an exploration tunnel at Los Sulfatos to continue assessing the find.
Meanwhile the firm's success has continued at the giant Collahuasi open-pit mine, another joint venture with Xstrata, as well as Japanese trading house Mitsui & Co (MITSY-Q).
Last July, the Collahuasi mine announced a revised estimate putting the size of the measured, indicated and inferred resource at a staggering 7.094 billion tonnes grading 0.82% and 269 parts per million of molybdenum, for a total resource of 58 million tonnes of contained copper.
The figure, reached following new drilling, modeling changes and metal price assumption adjustments, implies an increase of 40% of more than 2 billion tonnes since the previous estimate published in December 2009.
Reserves were increased by 315 million tonnes to 2.414 billion tonnes, grading 0.82% copper.
The increased resources have given the company greater confidence about plans to increase production at the mine to more than 1 million tonnes copper a year over the next decade, from around 500,000 tonnes a year currently. Work on prefeasibility studies is expected to begin early this year.
- Based in Santiago, the author is a freelance journalist specializing in mining. He can be reached at email@example.com.
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