BHP approves $2.5 bn copper mine expansion project in Chile
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BHP approves $2.5 bn copper mine expansion project in Chile

6:52 AM, 18th August 2017
BHP approves $2.5 bn copper mine expansion project in Chile
BHP Spence copper mine in Chile.

CHILE, US: BHP Billiton Ltd, a mining company said that it has approved a capital expenditure of $2.46 billion for the expansion of its Spence copper mine in Chile.

Under the Spence Growth Option (SGO) project the company will extend the mine life by more than 50 years.

BHP CEO Andrew Mackenzie said the SGO project supports BHP’s strategy to deliver near-term, valuable copper production.

In the first 10 years of operation, incremental production from SGO will be approximately 185-kilo tonnes per annum (ktpa) of payable copper in concentrate and 4 ktpa of payable molybdenum, with the first production expected in the 2021 financial year. The current copper cathode stream will continue until the 2025 financial year.

The SGO project will draw on experience developed in the construction of the Organic Growth Project 1 concentrator and desalination plant at Escondida, and create up to 5,000 jobs during the construction phase. The project includes the design, engineering and construction of a conventional large-scale sulphide concentrator for both copper and molybdenum with a 95 ktpd nominal ore throughput capacity.

In addition, SGO will require a new 1,000 litre per second desalination plant located at Mejillones Bay and a 154 km water pipeline from the plant to the Spence mine site. These will be built and operated by a third party under a build, own, operate and transfer contract, which has been separately awarded, with nominal, undiscounted value of lease payment obligations over the 20-year contract term totalling $1.43 billion.

“Execution of the SGO will create long-term value for shareholders in one of our preferred commodities. The project significantly extends the life of our Spence operation and unlocks the potential of the large, quality resource,” said Andrew Mackenzie.

“SGO has been extensively studied and we have made significant improvements to project cost and design so that it is able to compete in our portfolio of attractive development options,” added Mackenzie.

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