Green light for US$600mn Lundin project to extend life of Chilean copper mine

Canadian miner Lundin will begin a US$600mn optimization and operational continuity plan in January to extend the life of the Candelaria copper mine in northern Chile until 2040 after receiving approval from the Atacama region's branch of environmental review agency SEA.

The company also expects to receive the green light from the national environmental review agency in October, according to a press release.

The project will enable Lundin to increase production from the open pit and underground operations in Tierra Amarilla district and incorporate the Española pit after exploration verified the existence of additional mineral reserves and resources of nearly 350Mt, according to the firm's environmental impact assessment (EIA).

“We are very pleased to announce approval of the Candelaria optimization and operational continuity 2040 EIA. This announcement is the culmination of a comprehensive process and ... enables the construction of various facilities and initiatives that, together, represent continued investment and local employment,” Lundin CEO Peter Rockandel said in the release.

The project will extend the operations at Candelaria for an additional 10 years from 2031 as previously authorized, by expanding waste rock disposal areas, installing a new crushing system for underground mining and establishing new mineral reception areas for third parties and small-scale independent miners.

The works also involve expanding Lundin's 500l/s desalination plant at Punta Padrones port, about 100km from the operations, which supplies all of Candelaria's water needs.

Candelaria has suffered from declining ore grades, which Lundin will seek to offset with improvements to the extraction process that will allow it to maintain throughput of 90,000t/d as an annual average and reach an average ore extraction rate of 384,000t/d.

Candelaria achieved production of 174,000t of copper equivalent in 2022, and this year it is expected to slip to 145,000t-155,000t copper equivalent.

The firm reduced its capex for this year to US$375mn from the previous US$400mn due to the postponement of projects to next year, it stated in its 2Q23 report.