BHP, the world’s largest miner, is set to invest up to $14 billion in expanding its copper production in Chile. The company aims to increase output significantly at its Escondida mine, with plans to boost production by 430,000 to 540,000 tonnes per annum.
During a recent Chile tour, BHP’s president, Brandon Craig, revealed the company’s strategy to stabilize long-term production at around 1.4 million tonnes per annum, requiring substantial investments. The capital intensity needed to achieve this growth is estimated at $23,000 per tonne of copper equivalent.
At Escondida, where BHP operates the world’s largest copper mine, the company plans to inject between $7.3 billion and $9.8 billion into new projects commencing in 2028. These initiatives are crucial to counteract declining ore grades and the impending closure of the Los Colorados plant.
One of the key projects in BHP’s expansion plan is the construction of a new concentrator, expected to yield between 220,000 and 260,000 tonnes per annum from 2031/32. The company also aims to enhance production at Laguna Seca, with an investment of $2 billion to $2.6 billion.
Moreover, new leaching facilities are anticipated to contribute an additional 35,000 to 55,000 tonnes per annum from 2030/32 onwards, requiring a projected capital expenditure of $900 million to $1.3 billion. BHP’s commitment to Chile spans over three decades, with plans to sustain operations at Los Colorados until fiscal year 2029.
The mining giant also earmarked $2.8-$3.9 billion for its Pampa Norte division, encompassing major copper mines like Spence and Cerro Colorado. BHP aims to ramp up production significantly, including restarting the Cerro Colorado mine using supergene leaching.
BMO metals and mining analyst Alexander Pearce noted that BHP’s copper expansion plans exceed market expectations. With a bullish outlook on global copper demand, BHP anticipates a surge in consumption driven by renewable energy and electric vehicle adoption, necessitating an estimated $250 billion in investments by 2035.
Chile, the top global copper producer, heavily relies on BHP’s operations for its copper supply. BHP’s contributions to the nation’s economy are substantial, with an estimated $9.4 billion expected by the end of fiscal year 2024.
Looking ahead, industry analysts suggest that BHP’s acquisition of Anglo American could be a strategic move to bolster copper production. Despite a previous unsuccessful attempt, BHP may revisit this option after the mandatory waiting period expires.
In a bid to secure additional copper assets, BHP recently acquired a stake in Filo Corp., signaling its commitment to expanding its presence in South America’s lucrative copper market.
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