The natural resource industry in Chile is deliberating on whether to grow its capacity in the production of refined copper or concentrate on the already established export in copper concentrate. Despite the nation being the first worldwide in the production of copper concentrate, only 25% of the total copper produced is processed in the country.
The director of Cesco, the copper studies center, Iván Valenzuela, stated during a webinar that the poor management of some firms in the smelting sector may have discouraged more investment in the sector. The center’s interests lie in the separation of both factors. He argues that while the smelting business may be challenging, he believes that it is an important factor for sustainable mining and can be profitable.
The country has seven smelters: Ventanas, Potrerillos, Chuquicamata, Altonorte, Caletones, Chagres and Hernán Videla Lira. The first three smelters also have refineries. Of the seven smelters, five are managed by Enami, a national mining firm, and Codelco, a state copper miner. Chagres is the property of London-based Anglo American while Altonorte is the property of Swiss Glencore. The largest unit among the seven smelters is Chuquicamata, which has a 540,000 ton refining capacity and a yearly smelting capacity of 1.4 megatons.
A law that was approved in 2013 established that new smelters must capture no less than 98% of arsenic and sulfur emissions while the existing smelting operations must capture more than 95% of the said emissions. Cesco is currently developing a proposal to build a refinery and smelting facility in the country, adding that a sector leader should manage the facilities.
Valenzuela explained that considering an NPV of 13% and costs of roughly $0.17 dollars per pound, the facility would need a $1.5-billion-dollar investment to attain a 1.5 Megaton copper production annually. The facility would also reduce the emission of greenhouses gases during cathode transport to China by 71% while capturing 99% of sulfur emissions.
Additionally, Valenzuela noted that under the circular economy concept, the smelter was driving industry technology because of the treatment of ore as well as the recovery of other elements. This, he said, would improve the image of mining across the country in addition to easing the approval of a social license. However, considering the potential closure of the smelters currently in operation and the new environmental regulations, the smelter would have to be in operation by the year 2027.
The country is expected to generate roughly 5.82 megatons of copper this year.
Still on the subject of copper, Josemaria Resources Inc. (TSX: JOSE) (OTCQB: JOSMF) is concentrating on developing its fully owned copper and gold mining project in Argentina. This could pay off, as both copper and gold have been enjoying good runs on the market.
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