BHP Billiton (ASX, LON, NYSE: BHP) has launched a series of studies to look at its operations in Chile over the next 18 months, as the company looks for ways to offset the impact of lower feed grades at concentrators expected to begin in 2027.
The miner will begin implementing its own leaching technology, called Full SaL (SaL stands for Simple Leaching Method), which has already yielded results at Spence.
Due to improved recovery rates and shorter leaching cycles, Escondida's Full SaL cathode copper production is expected to reach approximately 410,000 tons within 10 years.
According to a report published by BHP on its website, the company estimates that capital expenditures to implement all-aluminum will reach nearly $300 million, with the first production to take place in FY25.
The world's largest mining company is also evaluating building a new concentrator in Escondida to replace the one at its Los Colorado plant.
BHP added that it would explore alternatives that could extend the production life of the Cerro Colorado mine. The Cerro Colorado mine will cease production when its environmental permit expires this year.
The Australian mining giant expects the costs associated with the announced study as part of its operating costs to increase from $60 million in FY23 to around $140 million annually in FY24 and FY25.
Operating costs associated with the closure of Cerro Colorado are expected to be approximately $70 million and $45 million, respectively, for the six months ending December 2023 and June 2024.
Thanks to the use of leaching technology and desalinated water, the mine could reopen as early as 2030, subject to approval from the environment department.
New ways to solve old problems
Copper production in Chile, the world's largest producer, has been falling in recent years as miners face water restrictions due to a prolonged drought, while miners have faced a series of operational setbacks and project delays due to declining grades at Chile's older mines.
Codelco, the world's largest copper company, has not escaped the trend. Earlier this year, the company said it expected production to fall 7 percent in 2023, after already falling sharply last year.
A report released this week by Chilean government agency Cochilco showed cash costs at Chilean mines rose 29 percent in the first three months of this year compared with the same period in 2022.
From BHP Billiton's August 2023 results report.
BHP Billiton is studying or implementing five leaching technologies aimed at unlocking resources and potential capacity. These include its own BioLeach technology, which uses acid and bacterial leaching, which has been used in Escondida, Full SaL and BHP Leach. The other two are third-party technologies - Jetti Resources' catalytic leaching technology, in which BHP has a stake through BHP Ventures; Nuton, a joint venture owned by Rio tinto, uses a high-temperature bioleaching process.
BHP told local newspaper La Tercera that it currently has more than 30 projects underway at Escondida, including operational continuity and growth options.
Among other things, the company is considering underground mining in Escondida, replacing diesel with solar and other decarbonization initiatives.
While majority owned and operated by BHP Billiton, Rio Tinto and JECO Corp of Japan also have stakes in Escondida, the world's largest copper mine.
