BHP's Escondida reports higher production and mulls an expansion

BHP is increasing copper production at its Escondida mine in Chile and is preparing a growth program that will allow it to reach output of 1.4Mt/y in the country from 2031.

By adding projects in Argentina to its portfolio through the JV with Canadian company Lundin Mining, the Australian giant is on track to strengthen its role in global copper mining.

Escondida recorded an 11% year-on-year increase in production in the July-September quarter, corresponding to BHP’s 1Q25, to 304,200t, in line with plans, the Melbourne-based company said in an operations report.

The increase was due to a higher grade in the concentrator feed and better recovery, although it was partially offset by lower cathode production, the document adds.

The world’s largest copper mine, in northern Chile’s Antofagasta region, has faced the impact of the decrease in the quality of feed that reaches the concentrators.

For this reason, BHP is analyzing an expansion and optimization program that includes a potential expansion of the Laguna Seca concentrator at Escondida and a new concentrator to replace the old Los Colorados facilities, currently in a temporary maintenance phase.

It also considers the introduction of new leaching technologies to unlock primary sulfide resources, such as the FullSaL project currently being commissioned at Escondida following the successful implementation of the technology at its nearby Spence mine.

Capital expenditure for FullSaL was in the region of US$300mn and it is targeted to produce around 410,000t of copper cathodes at Escondida over 10 years through improved recovery and shorter leach cycle times.

First production from FullSal is planned for this financial year, BHP said in its August report.

Escondida produced 1.1Mt of copper last year and in fiscal year 2025 guidance is in a range of 1.18Mt to 1.3Mt.

However, the desire to reach 1.4Mt in the next seven years is already underway with projects in the pipeline and with a possible new expansion at the Spence concentrator.

The company is also aiming to restart operations at Cerro Colorado in Chile where there are 1.7Bt of inferred resources, said BHP’s CFO Vandita Pant during the presentation of results for calendar 2Q24.

These projects are key, considering that in 3Q24 Spence's production fell 13% year-on-year to 60,100t, while cathodes were down 19% to 24,400t as planned.

In the 12 months ending June 2023, Spence saw record copper production of 289,000t, largely due to the SGO project, but its decline was anticipated and for fiscal year 2025 guidance is 240,000-270,000t.

A possible expansion of the concentrator at Spence and extension of the leach life is planned.

BHP is making steady progress in improving its operations in Chile and is preparing to consolidate the development of the Filo del Sol and Josemaría copper projects in Argentina, once the joint venture with Lundin is completed in the third quarter of 2025.

BHP forecasts global copper demand will grow by around 70% to more than 50Mt/y by 2050 due to the transformation towards electrification.