BHP, Rio’s Escondida Copper Mine Holds Additional US$800 Million Copper Resource

The Sydney Morning Herald reported that BHP Billiton (NYSE:BHP) and Rio Tinto (NYSE:RIO) have at least 200 million tonnes of copper ore at grades higher than 1 percent underneath a concentrator at its Escondida copper mine in Chile. The miners could earn up to US$800 million between them over the next three years if they are able to add to existing production.

As quoted in the publication:

The mining giants had planned to dismantle the plant when a third big plant, the $US3.8 billion concentrator OGP1, was brought online at the mine in the March quarter next year.

Higher grade copper ore – at least 200 million tonnes at greater than 1 per cent – is trapped beneath the Los Colorados concentrator, which is the main rationale for tearing it down.

But Mr Young expects the miners will instead choose to keep all three plants running for at least the rest of this decade, which will increase Escondida’s copper production by 200,000 tonnes per year from financial 2018.

Still, Deutsche mining analyst Paul Young told the Herald:

There will come a point in time where it is more value accretive to build another concentrator and pull down the Los Colorados concentrator to gain access to the +1 per cent copper ore.

Click here to read the full Sydney Morning Herald article.