BHP Billiton greenlights Spence (October 25, 2004)

BHP Billiton (BHP-N) managers have given the official go-ahead for construction of the US$990-million Spence copper project in northern Chile.

A blind copper-porphyry deposit discovered in 1996 by Canadian copper miner Rio Algom, Spence came into Billiton’s hands in 2000 via a US$1.2-billion takeover of Rio Algom. A year later, Billiton merged with BHP.

Miners will tap into total oxide reserves of 79 million tonnes grading 1.18% copper and total sulphide reserves of 231 million tonnes at 1.13% copper. The oxide and sulphides will be mined from a single open pit but will be processed separately to maximize recovery.

The mine will produce about 200,000 tonnes of copper cathode per year over a mine life of 19 years, with the first cathode production scheduled for the last quarter of 2006.

Mine access is excellent — the deposit was discovered out in the Atacama desert under highway 25, some 150 km from Antofagasta — but BHP Billiton will need to build a 50,000-tonne-per-day crushing circuit, two separate leach pads, two parallel solvent extraction (SX) plants and an electrowinning (EW) circuit to produce copper cathode.

“Spence is the best undeveloped copper orebody known in the world today,” says Diego Hernandez, BHP Billiton’s president of base metals. “Its large reserves, low operating cost structure and high return potential will enable it to operate as one of the world’s top-tier mines.