MINING IN CHILE — Quebrada Blanca ready to produce

An open-pit copper mine starting up in Chile’s Atacama Desert is about to become the world’s largest solvent extraction-electrowinning operation.

Once full production is achieved, Quebrada Blanca is targeted to produce 75,000 tonnes of high-grade copper cathode annually and generate revenues for three Vancouver-based, TSE-listed companies — Cominco, Teck and Cominco Resources International.

Cominco holds the largest interest, at 38.25%, followed by Teck with 29.25%. Cominco Resources has 9%, while the remainder is held by two Chilean companies.

Production for the first 14 years is expected to come from the 89-million-tonne, secondary, sulphide deposit grading 1.3% copper. This will expose an underlying resource estimated to contain more than 200 million tonnes of 0.5% copper, which could extend the operation into the next century. Cominco is responsible for the design, construction and operation of the project, which requires addressing the challenges of remoteness (close to the Bolivian border) and high altitude (4,300 metres).

Cominco President Robert Hallbauer told shareholders at this year’s annual meeting that capital costs will be about US$335 million and that production will start near schedule and ahead of feasibility.

“This has been a valuable experience for our staff in that we now have confidence in our ability to estimate costs and build projects in remote areas in foreign jurisdictions using local contractors and labor,” Hallbauer said.

William Robertson, Cominco’s chief operating officer, said crushing facilities and ore-handling equipment are fully operational, with ore already having been placed on the heap-leach pads. Production costs are expected to be low — about US40 cents per lb. — well below the current weighted average of about US63 cents in the Western world.

Quebrada Blanca is seen as a model for Canadian-Chilean co-operation in mining and is expected to provide social and economic benefits to northern Chile. It will employ about 500 local Chileans and a subsidized housing program has been arranged which will enable workers to buy their own homes.