Codelco approves reformulated Chuquicamata project

The board of Chile's state copper miner Codelco has approved a reformulation of the massive underground conversion project at the company's open-pit Chuquicamata mine, which aims to extend the life of the century-old operation by 50 years.

The original conversion project, approved in 2014, included four underground levels but Codelco has scaled that down to three. The new design, along with a major renegotiation of large contracts for the project, has reduced costs, Codelco said in a statement on Wednesday.

Even so, the current cost estimate of US$5.55bn is significantly higher than the US$3.5bn projected four years ago on approval. Codelco said in 2017 it aimed to reduce capex to US$3bn with the overhaul. The project has an IRR greater than 10%, Codelco said.

The board approval remains subject to recommendations from state copper commission Cochilco and the social development ministry.

The Chuquicamata undergound project has remained largely on schedule and is on track for completion in 2019.