BHP Billiton

MAJOR INVESTMENT AND RESERVE INCREASE AT ESCONDIDA

BHP Billiton today approved a total investment of US$2.6 billion in two projects that will underpin higher production at Escondida over the next decade.

Organic Growth Project 1 (OGP1) will replace the Los Colorados concentrator with a new 152,000 tonne per day (tpd) plant and allow access to higher grade ore located underneath the existing facilities. Construction will begin in February 2012 with commissioning anticipated the first half of the 2015 calendar year. The project will cost US$3.8 billion (US$2.2 billion BHP Billiton share) and is expected to create up to 7,000 jobs during the construction phase.

BHP Billiton also approved the Oxide Leach Area Project (OLAP) which creates a new dynamic leaching pad and mineral handling system that will include several overland conveyers. The new pad will maintain oxide leaching capacity at current levels following the exhaustion of the existing heap leach in the 2014 calendar year. OLAP is expected to cost US$721 million (US$414 million BHP Billiton share) with commissioning anticipated in the middle of the 2014 calendar year. Approximately 2,500 jobs will be created during the construction phase.

In addition, BHP Billiton announced a 17 per cent increase in the Mineral Resources and a 25 per cent increase in the Ore Reserves at Escondida following successful brownfield exploration and accelerated in-fill development drilling programs. The Reserve increase also reflects the approval of OGP1, as most lower grade sulphide ore is now expected to be treated through the flotation circuit with an associated increase in process recoveries.

A new resource at Chimborazo, based on more than 115,000 metres of drilling averaging 530 metres in depth, was also declared. The resource is being evaluated as potential feed for Escondida’s Sulphide Leach processing facilities.

BHP Billiton Base Metals President, Peter Beaven, said: “We expect the completion of the current Escondida Ore Access and Laguna Seca debottlenecking projects, and a strong recovery in ore grades, to support a substantial recovery in Escondida copper production to over 1.3 million tonnes per annum in the 2015 financial year.

   “Looking ahead, the success of our brownfield exploration program suggests there are sufficient resources at Escondida to sustain production at current levels for more than a century. OGP1 is the first of a series of potential projects that could substantially expand processing capacity at Escondida and help ensure it remains the world’s leading copper operation for decades to come.”  

Escondida is located 3,100 meters above sea level, 170km South-East of the City of Antofagasta in Chile.  It is owned by BHP Billiton (57.5%), Rio Tinto (30.0%), JECO Corporation (10.0%) and JECO 2 Ltd (2.5%).  BHP Billiton operates the Escondida mine.