China could be interested in developing Chilean state copper smelter
China could be interested in developing the new US$1.4bn copper smelter of Chile’s state-owned minerals processing company Enami, according to an industry insider.
"China has smelting technologies and will most likely want to do the engineering and financing [of the project] in exchange for a certain amount of copper cathodes," Manuel Viera, CEO of mining engineering company Metaproject Group, told BNamericas.
Enami completed the closure of its Hernán Videla Lira smelter, in northern Atacama region, on Friday. The company’s principal role is to treat the ores and concentrates of small and medium-scale miners.
Initially, the halting of the plant, also known as Paipote, was scheduled for April but was brought forward due to the lack of supply of copper concentrates from two companies that accounted for 80% of the total, Enami said in a statement last week.
"The stock was not enough to continue smelting. What small producers provide us is not enough to keep the plant operating," said CEO Iván Mlynarz.
The suppliers claimed Enami was behind on payments, which would be a consequence of the financial crisis that the state firm is going through.
The company’s financial situation led to the creation of a special investigative commission in congress to seek solutions.
The commission concluded that US$250mn a year would be needed to fix the company’s finances.
Paipote had been producing copper anodes for 72 years but had failed to comply with modern pollution standards.
The new smelter-refinery is due to more than double Paipote’s capacity to 700,000t/y of concentrates to make up for the closure of the 400,000t Ventanas smelter of state-owned copper miner Codelco, and will also reduce emissions.
Paipote workers are worried about their jobs but Mlynarz called for calm, saying Enami will talk with the unions to find solutions.
However, he warned that around 500 workers would be laid off by mutual agreement although that would not happen before May, local media reported.
Enami has more than 3,200 workers, including its own and those of contractors.
The Copiapó court of appeals, meanwhile, agreed to hear an appeal against the smelter’s closure presented by the Paipote workers' unions, to which Enami is reportedly preparing a response. The company denies the closure was illegal.
“This could have been avoided with a good strategy, agreed upon in advance between government players, regional authorities, executives and workers,” Gerardo Maldonado, strategic foresight manager at Ripp Consulting, told BNamericas.
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