Caption: The Spence copper mine, Chile.
BY CAMERON DRUMMOND
BHP will spend $US2.46 billion to extend the life of its Spence open-cut copper mine in northern Chile by more than 50 years, creating up to 5000 jobs.
Under the Spencer Growth Option (SGO) project, incremental production of copper concentrate would be about 185,000 tonnes per annum (tpa) and 4000tpa of molybdenum, with first production expected during the 2021 financial year.
The project includes the design, engineering and construction of a conventional large-scale sulphide concentrator for both copper and molybdenum with a 95,000 tonne per day nominal ore throughput capacity.
In addition, SGO will require a new 1000 litre per second desalination plant at Mejillones Bay, and a 154km water pipeline from the plant to the Spence mine site.
BHP said the SGO had an expected internal return rate of 16 per cent and an expected payback period of 4.5 years from first production.
With copper prices reaching their highest levels since 2014, BHP chief executive Andrew Mackenzie said the project supported BHP’s strategy to deliver near-term, valuable copper production.
“Execution of the Spence Growth Option will create long-term value for shareholders in one of our preferred commodities,” Mr Mackenzie said.
“The project significantly extends the life of our Spence operation and unlocks the potential of the large, quality resource.
“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.”