Escondida

From Wikipedia, the free encyclopedia

This article is about the mine. For the album by Jolie Holland, see Escondida (album).

False color satellite image of the Escondida Mine, courtesy of NASA

Minera Escondida, which means 'hidden' in Spanish, operates two open pit copper mines in the Atacama Desert, 170 km southeast of Antofagasta in northern Chile. It is currently the largest copper mine in the world. 2007 production of 1.483 million tons of the metal was worth US$ 10.12 billion^[1], mainly as metal in concentrate but some as cathode, and was 9.5% of world output and 26% of Chilean production, according to the US Geological Survey's preliminary estimates of 2007 world mine output^[2]

1 Overview
2 History
3 The Mine
4 Escondida, the Chilean Economy and the World Copper Market
5 References
6 See also
7 External links

[edit] Overview

It is so called because the main orebody does not outcrop on surface but is 'hidden' by hundreds of metres of practically barren overburden. The lower open pit in the satellite image on the right is the main Escondida mine but the upper two are Barrick Gold's Zaldívar mine. The second Escondida open pit, Escondida Norte, had not been established when the image was taken but is now immediately to the right (east) of the larger Zaldívar pit. (See Minera Escondida on Google Earth for details)

Escondida produces mainly copper concentrates, which are piped as a slurry down to the port of Coloso where they are dewatered before shipping, and a smaller proportion of cathode copper from the leaching of both oxide and low grade sulphide ore. It also produces gold and silver^[3].

The mine is owned 57.5% by BHP Billiton, 30% by Rio Tinto, 10% by JECO, a Japanese consortium headed by Mitsubishi and 2.5% by the International Finance Corp (IFC), a World Bank subsidiary. It is managed by a seven man Owner's Council designated by the four owners. At present Escondida is the largest foreign investment in Chile with a cumulative investment of US$5.64 billions at the end of 2006^[4].

[edit] History

In 1978 J David Lowell proposed an exploration program^[5] along the porphyry copper belt between Chuquicamata in the north and El Salvador in the south. Minera Utah de Chile and Getty Mining (Chile) formed a joint venture to carry it out. On March 14th 1981, 'Pozo 6' the last scheduled borehole in the program^[6], hit 52 metres of 1.51% copper at a depth of 240 metres and discovered the main Escondida orebody^[7]. More holes were drilled to delineate the orebody and a shaft was sunk to provide bulk samples for metallurgical testing. Construction of the mine started in 1988 which including the stripping of over 180 million tonnes of waste in order to get to the orebody^[8].

The Los Colorados concentrator started up at 35,000 tonnes per day in November 1990 and the first concentrate shipment was made at the end of the year. Expansion has been steady since then. In 1994 an ammonia leach plant to produce copper cathode from a portion of the concentrates was started up in Coloso but was not economic and closed down four years later. In 1998 the oxide ore leaching plant was started up which now has a capacity of 150,000 tonnes of copper cathode annually. Also in 1998 the Los Colorados concentrator was expanded to 120,000 tonnes per day. A second concentrator, the 110,000 tonnes per day Laguna Seca mill, started up in 2002, the Escondida Norte pit started production in 2005 and in 2006 a sulphide bioleach plant with an annual capacity 180,000 tonnes of cathode started up, as did a desalination plant in Coloso^[9]. All told a massive investment operation.

Ownership changed when BHP acquired Utah Mining and then Texaco acquired Getty Oil and sold off its mineral interests. BHP bought these and then sold a 30% interest to Rio Tinto and 10% to JECO. It subsequently sold 2.5% to the IFC.

[edit] The Mine

The Escondida deposit is one of a cluster of porphyry coppers in an elongated area about 18 km north-south and 3 km east-west^[10] and is associated with the 600 km long West Fissure (Falla Oeste) system which is in turn associated with most of the major Chilean porphyry deposits. A barren leached cap, in places up to 300 metres thick, overlies a thick zone of high grade secondary mineralisation of the main orebody, largely chalcocite and covellite. which in turn overlies the unaltered primary mineralisation of chalcopyrite, bornite and pyrite.^[11].

At mid 2007 Escondida had total proven and probable reserves of 34.7 million tonnes of copper of which 22.5 million tonnes is estimated to be recoverable. Total resources (including reserves) were 57.6 million tonnes of copper of which 33.0 million tonnes should be recovered. Exploration continues. ^[12]

Sulphide ore, which contributes 77% of the recoverable copper reserve, is crushed and milled in one of the two concentrators and the copper concentrate is separated out using froth flotation. Approximately 86% of the copper is recovered. It is piped down to the port of Coloso where it is dewatered before shipping. Oxide ore, 4% of recoverable copper, is crushed, agglomerated and then acid leached in large heaps and the copper recovered from the leach solutions as copper cathode in a solvent extraction/electrowinning (SX/EW) plant. Recovery is 68%. The low grade sulphide ore contributes 19% of recoverable copper. It is also crushed and dumped on large heaps but here the leaching occurs through oxidation and bacterial action. The copper is also recovered by SX/EW^[13].

In 2006 338.6 million tonnes were mined (928,000 tonnes per day) of which 251.5 million tonnes were waste and oxide ore. Sulphide ore totalled 87.1 million tonnes or 239,000 tonnes per day. The two camps, San Lorenzo and 2000, cater to 7,000 people daily.^[14]. .

[edit] Escondida, the Chilean Economy and the World Copper Market

Further information: Economy of Chile

Escondida has become an important part of the Chilean economy. According to the CIA World Factbook, the mine's 2007 sales of US$10.21 billion were 4.3% of estimated 2007 GDP of US$234.4 billion and about 15% of exports. At the end of 2006 the company employed directly some 2,951 workers and 3,158 contractors^[15]

The average copper price in 2007 rose to US$3.23/lb compared with the mines total direct costs of only 60.8 cents/lb, which fell partly as a result of sharply lower treatment and refining costs charged by smelters. The operation was thus highly profitable and paid US$2.2 billion in tax to the Chilean treasury^[16].

As a result of its considerable size relative to the world copper market, developments at Escondida can have dramatic effects on the world copper price as was shown by its gyrations during the strike in August 2006^[17] ^[18]. The strike was called because the workers felt that they were not sharing in the very high profits being made by the company on the back of the record copper price^[19] ^[20]. The workers initially demanded a 13% pay rise plus a bonus of $30,000^[21] but eventually settled for a 5% increase, a $17,000 bonus and a number of other minor benefits^[22]. The company managed to keep production at 40% of normal levels but the union eventually blockaded the road to the mine on 16th August. On 18th August Escondida declared force majeure and stopped production ^[23].

Arturo Martinez, the Chairman of the Central Unitaria de Trabajadores, (CUT, an association of Chilean trade unionists) met with the Escondida workers on 17th August 2006 and said that "what is happening at Escondida puts back onto the agenda a new nationalisation of copper, lo que ocurre en Escondida pone a la orden del día una nueva nacionalización del cobre ^[24] ^[25].