BHP, Rio Tinto to expand Escondida

Denver — Partners Broken Hill Proprietary (BHP-N) and Rio Tinto (RTP-N) have approved a US$1.04-billion expansion that would increase annual copper output at the giant Escondida copper mine in northern Chile to 1.2 million tonnes.

Engineering is 97% complete, and construction should take less than two years.

This fourth phase of expansion should increase ore-processing capacity by 85%, resulting in a 50% increase in production. Total annual production should top 1.2 million tonnes copper in the first five years of operation.

The open-pit operation, situated in the Atacama Desert, has already secured water for the expansion. The arrangement involves buying water rights from the nearby Zaldivar copper mine, operated by Placer Dome (PDG-N).

Zaldivar has sold rights to 630 litres of water per second in return for US$135 million, payable over the next 15 years.

BHP operates the mine with a 57.5% interest, while Rio Tinto holds a 30% interest. A consortium of Japanese companies controls 10%, with the remaining 2.5% held by International Finance Corp.