copper grades on the retreat

Copper grades on the retreat
THE Chilean copper mining industry, which accounts for a third of the world's output, is at a turning point as ore grades are retreating and bigger capital expenditures are needed to maintain production levels, according to the head of BHP Billiton's base metals division, Peter Beaven.

As mines in Chile age, ore grades decrease and the minerals mined become harder and are located farther away from the surface, increasing mining costs and reducing copper production.

In addition, Chile is grappling with high power costs and a future energy crunch as many of the largest planned electricity projects are suffering setbacks in the local courts.

"Mining in Chile is at a turning point as the industry requires large expenditures just to maintain throughput," said Mr Beaven.

Speaking at an industry event in Santiago, Mr Beaven said mines like the BHP-operated Escondida, the world's biggest copper mine, started out with ore grades at 3 per cent but now were mining ore with about 1 per cent copper. At state copper giant Corporacion Nacional de Cobre de Chile, or Codelco, ore grades in 2012 will average less than 1 per cent.

"We're nearing the end of the first stage and must now begin a second and different stage, and there's a lot of competition from countries such as Peru and Mongolia," Mr Beaven said.

http://www.theaustralian.com.au/business/mining-energy/copper-grades-on-the-retreat/story-e6frg9df-1226519130969

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