Mining and metal production in Chile [Review]

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Chile Steel Production

Chilean Mining Sector

The global consumption of copper only further continues to augment, and Chile plays a crucial elemental role in the midst of it. The country is now considered, furthermore, a world leader in its production, ranking at the top of the exportation chain altogether. Additionally, the majority of all mining endeavors rely the bulk of their efforts on its proper extraction.

To add, a recent material elements radiography in the area detected that refined copper alone accounted for nearly 30% of all products that have been exported from Chile, and the findings were based upon a 2012 study. In addition, copper concentrates accounted for another 20%, respectively. These two statistics alone are in higher percentage ranges than other products that Chile mines, produces and exports, such as gold, silver, bronze, sulfate, and even certain food products.

Moreover, Chile’s mining industry consists of firms large, medium and small in scale, overall. And some of the greatest mining firms there, when combined, may exploit copper at up to 96%, therefore implying the vast majority of the available element is thereby taken out for production and use, either for local domestic purposes or foreign business. Millions of Chilean Pesos are invested into the process every year.

Metallic Mining Production

 In metal mining, Chile has operations that exploit resources of copper, molybdenum, gold, silver, iron, zinc and lead. The five operations with the highest production are those of Minera Escondida, Minera Collahuasi, División El Teniente de Codelco, Minera Los Pelambres and Division Chuquicamata de Codelco. The divisions of Codelco Chile, and the operations of Los Pelambres, Collahuasi, Los Bronces and Valle Central, are Molybdenum producers.

Due to its economic importance, copper mining is the main economic activity in the country. Molybdenum is obtained in its entirety as a byproduct of copper mining, recovered in sulfur-type mineral concentration operations. Gold in Chile is obtained both from gold mining operations and as a byproduct of copper mining. Silver, meanwhile, acts as a by-product oéf gold and copper. 

Chile is a South American leader in its industry. It mines even more than several of its competing South and Central American countries, respectively. And as such, it also employs more highly within sectors of the mining – labor workforce.

In Chile, iron is produced in bulk and in pellets. In 2015, more of the following has been produced in Chile than ever before :

  • 15.4 Million tons of iron ore.
  • 9.1 Million tons of iron fragments.

And furthermore, of what was produced, the main producers included CAP Mining (70% of the total), Santa Fe Mining and SCM Taltal Iron. And here are the statistics on gold mining as well :

Gold  

35.8  tons of national production.

56% of the production was obtained from gold mining.

43% by – product of copper mining.

In terms of molybdenum, in 2017 alone, the country has produced more than 60,000 tons, with selenium and renio standing as by – products, respectively. But copper, naturally, stands above the rest with nearly 6 million total tons produced, in recent years, copper mining accounting for nearly 90% (88% exactly) of all Chilean mining exports ; 71% of the aforementioned percentage of all production has rightfully corresponded to all copper that has been specifically contained in concentrates. Copper from cathode sources accounts for the remaining 29%. These statistics are up to date and were derived from an official Sociedad Nacional de Minería in Chile source. 

To further add, many refer to the source agency as Sonami, and in English, it is furthermore referred to as the Sonami National Mining Society of Chile, respectively. And it holds a voice in all the latest Chilean mining endeavors and news talking points. It was founded in 1883. And all figures recently quoted were taken from its well – researched 2017 study.

Non – Metallic Mining Production

This form of mining is likewise rampant within certain divisions of the country as well. Chilean non – metallic mining comprises a wide variety of products that constitute the raw material for various industrial sectors, so it is also common to refer to these products as industrial minerals. Six particular types of minerals tend to take the forefront, in this respect, and they include Iodo, Lithium, Boron, Sodium – Potassium Nitrates, other Potassium compounds and Sodium Chloride.

Once more, for these particular elements, 2017 production within the country was taken into measure by Sonami. It was measured in thousands of tons. Iodo was found to have been produced in appx. 18,000 tons that year, with Lithium making up 81,000 and Boron slightly over 600,000. Additionally, Sodium and Potassium Nitrates were concluded to have been produced at nearly 900,000 tons, and Chloride, Sulfate and other compounds of Potassium are stated to have been produced at nearly 2,000 tons. Sodium Chloride was the most produced compound, standing at 7,440 total tons.

There are also other resources in the country used in construction, such as aggregates and clays, in the manufacturing sector (barite, white carbonates, kaolin, feldspar and talc), in agro-industry (apatite, bentonite, diatomite, dolomite and guano), and in the preservation of the environment (bentonite, diatomite, perlite and zeolites).

Alkali metal mining is also in rapid production constantly. The CORFO agency for non – metallic mining interests, based in Chile, has also noted the following :

  • There are approximately sixty-three between salt flats and saline lagoons known in northern Chile.
  • They are located in the regions of Arica and Parinacota, Tarapacá, Antofagasta and Atacama, in an area of ​​about 250,000 km2, from 1,000 meters above sea level in the west and up to almost 5,000 meters above sea level in the east.
  • They contain,with in their brines, the highest concentrations of lithium and potassium known, in addition to considerable concentrations of sulfate and boron. From these natural resources, lithium carbonate, potassium chloride, potassium sulfate, boric acid and magnesium chloride are produced.
  • Although, to a lesser extent, there are other minerals present, such as microline, pyrophyte, muscovite and kaolinite, which can be refined in aluminum and are widely used in industries related to construction, transportation (aircraft, ships, trains, cars), networks high-voltage and / or voltage electrical, packaging and household products.
  • One may additionally procure nitrate, cristobalite and thernardite (they are refined in silicon dioxide, which is required in the microelectronics industry, and food); albite, orpiment, magnesia and dolomite (they are refined in magnesium, which is useful for pyrotechnics, the metal-mechanic industry and agro-industry); ulexita (refined in Boro and used in the wine, textile and pesticide industry) and rutile (it is refined in titanium and used in the military field, in surgery, in technological components of construction and in space aeronautics).

Main Actors

The most crucial businesses with a massive mining presence in the region include the likes of Albemarle, Anglo American, Antofagasta Minerals, BHP Billiton, Codelco, Doña Inés de Collahuasi, Enami, Freeport McMoran, Glencore, K + S, KGHM, Lumina Copper, Lundin Mining, Mantos Copper, SQM, and Tech.

First and foremost, Albemarle, notably, is one of the leading lithium producers in the world, specializing in the delivery of chemical solutions to a wide range of customers and needs. The business is a strategic ally of Chile in the development of an industry of high – added value, which thus positions the country as one of the world leaders in the production of lithium as mentioned.

Albemarle’s team is committed to the development of the New Lithium Mining, which insists in the greater dialogue, overall sustainability and initial creation of shared elemental value. This is put into practice in all the business’s actions, in the way in which it relates to the indigenous communities and the unprecedented agreement signed by the 18 communities that make up the Council of Peoples of Atacameños, respecting the environment through an operation that is both sustainable and collaborative, and in the conviction of the necessary generation of shared value through common visions and a greater mining production future that is built with all its stakeholders.

Anglo American

Another major actor is notably the aforementioned Anglo American, a mining and production organization that currently holds multiple locations across the globe, with a reputable presence in Chile and surrounding countries. The company employs countless geologists every year, each tasked with the unique assignment of exploring newer, untapped mineral sources, even in a country like Chile, where most of the major reserve hot spots have already been located. The business’s experts consider multitudinous aspects of the process’s complexity as a whole. They may include those of the initial ore’s body, its nearby power or energy sources, the route to market and export from the source, and a host of other factors. The global company has been alive for more than 100 years ; Santiago is the main Chilean – location headquarters. 

Antofagasta Minerals

Antofagasta PLC is a Chilean company that operates in various sectors of its economy. It is one of the most important conglomerates in Chile, with investments in mining, through Antofagasta Minerals or the Pakistani Tethyan Copper Company. More is available by means of railways, mainly through the Antofagasta Railway to Bolivia, and the Andino Railway or Empresa Ferroviaria Andina S.A., or through the Aguas Antofagasta waters. This business is listed on the London Stock Exchange, and has been part of the FTSE 100 since 2004. It’s a majority shareholder is the Luksic family, which controls 65% of the capital.

Antofagasta Minerals is the mining division of the Antofagasta Group PLC. It is dedicated to the production and sale of mineral products, mainly copper concentrate, cathode and molybdenum concentrates. It also carries out explorations in Chile, and in other countries, to ensure the future growth of the mining industry there. The central hub spot of the group remains the Antofagasta Railway to Bolivia, a company that joined the London Stock Exchange in 1888, with the objective of operating the railroad concession between the port of Antofagasta, in northern Chile and La Paz, the capital of Bolivia.

In 1980, the majority of the capital of the company was acquired by the Luksic Group, with the consequent integration of both companies under the name of Antofagasta Holdings. During the 1980s was when the company officially diversified into other branches of activity, such as mining, investing in the Michilla mine in 1983, in the Pelambres mine in 1986, as well as in the telecommunications sector with Telefónica del Sur. In 1996, Antofagasta Holdings reorganized by transferring financial and industrial activities to Quiñenco, another business conglomerate owned by the Luksic family. This reorganization allowed Antofagasta to concentrate on the development of the Los Pelambres and El Tesoro mines, thus producing copper at lower cost ; In 1999, the company changed its name and was simply called Antofagasta.

Today, Antofagasta is one of the largest producers of copper worldwide, concentrating its mining activities mainly in Chile and more specifically in the Los Pelambres mines (60.0%), El Tesoro (70.0%), Michilla (74.0%) and Esperanza (70.0%). It likewise participates in copper extraction endeavors in Pakistan, through a joint venture between Tethyan Copper Company and the Canadian gold company Barrick Gold. It has also engaged in the extraction of other minerals in Chile and Peru.The group operates an extensive rail network in northern Chile, under the name of Antofagasta Railway to Bolivia, a company in which it controls 100% of the capital and in the water business in Antofagasta and 30 other localities in the area through Aguas Antofagasta, of which it also controls 100% of the capital.These were the aforementioned.

BHP Billiton

BHP Billiton is one of the largest mining companies in the world. Its origin comes from the merger (2001) of the Australian company Broken Hill Proprietary (BHP) and the British company Billiton. It has a dual shareholding structure. While BHP Billiton Limited is listed on the Australian Securities Exchange, BHP Billiton Plc is listed on the London Stock Exchange and is part of the FTSE 100. The Australian BHP Billiton Limited, and the British BHP Billiton PLC, are listed independently and with separate bodies of shareholders. Yet they operate as a single company with a single board of directors and within a sole administrative structure altogether. The parent company is located in Melbourne, with offices in London, Perth, Johannesburg, Santiago, Singapore, Shanghai, Houston and The Hague.

The business operates a wide range of mining operations in 25 countries, including iron, diamonds, manganese, coal (coke and thermal), copper, nickel, petroleum and bauxite. The global workforce is comprised of appx. 40,000 people.

This organization, furthermore, holds nine primary operational specialties :

  1. Iron
  • Manganese
  • Petroleum
  • Aluminum
  • Base metals
  • Carbon
  • Stainless steel materials
  • Diamonds and special products
  • Nickel

The group publishes its accounts in Dollars. Its income in 2009 was $44,113 million, and the net profit was $12,160 million. In March 2005, BHP Billiton announced an offer of 7.3 billion for the mining company known as WMC Resources, owner of the Olympic Dam uranium mine in South Australia, nickel operations in Western Australia and Queensland, and a fertilizer plant also in Queensland. The acquisition reached an acceptance of 90% on June 17, 2005, and 100% of the control on August 2, 2005, with a compulsory purchase of 10% of the remaining shares. On November 25, 2008, BHP Billiton withdrew the offer it had made to the mining company Rio Tinto due to the global financial crisis.

Codelco

National Copper Corporation of Chile, known as Codelco, is a state – owned agency engaged in the mining of copper, an arena of expertise by which it is the largest company on the planet. Codelco operates eight work centers, located between the Region of Antofagasta and the Region of Libertador General Bernardo O’Higgins; the Headquarters is located in Santiago. Codelco is the largest copper producer in the world, and the company that contributes the most to the Chilean economy. During 2016, its production totaled 1,827 thousand TMF (including its shares in El Abra and Anglo American Sur), a historic record that represents 10% of all world production and 33% of all national production.

Codelco concentrates 7% of all global copper reserves contained in world class deposits and, with a 10% share, additionally stands as the second largest producer of molybdenum. The company has seven mining divisions: Radomiro Tomic, Chuquicamata, Gabriela Mistral, Minister Hales, Salvador, Andina and El Teniente. To these operations, the Ventanas Division has recently been added, equipped with Smelting and Refinery facilities of its own grade.

Additionally, the Corporation has a 49% stake in the Contractual Company known as Minera El Abra and, since 2012, owns 20% of Anglo American Sur. In addition, Codelco participates in various companies oriented to exploration and research and technological development, both in Chile and abroad. The organization furthermore holds the highest levels of copper reserves and resources known in the world. It is estimated that, with the current rates of production, the deposits today help to further exploit projects of more than 65 years of lifespan, collectively.

Key to the development of Chile, from the nationalization of copper, in 1971, until 2016, the deposits and operations of Codelco have contributed $102 billion to the fiscal coffers. Of these surpluses, 48,067 million dollars were delivered in the period 2004-2010. It is also the main exporter : Codelco’s sales abroad have meant, practically, that there one of every four dollars has been exported by Chile during these 40 years. In 2015, Codelco recorded negative consolidated surpluses of US $2,191 million. This loss is mainly explained by the accounting adjustments for asset impairments (Impairment of Anglo American SA, deterioration of the El Salvador Division and Ventanas Division and the punishment of other assets), which reached an amount of $2,431 million.

The Equity in 2015 amounted to $9,733 million, lower than the $11,526 million recorded in 2014. The history of Codelco goes back to the process of nationalization of the Great Copper Mining that, during a great part of the 20th century, was realized by American capitalists. In 1967, the State became the majority shareholder of the country’s main copper mines, until in 1971, during the government of Salvador Allende, the companies were fully expropriated and nationalized. Administered each as a separate company in charge of the Copper Corporation, these would eventually be unified into a single company, Codelco Chile, in charge of the exploitation of the deposits and the commercialization of their products, with the enactment of Decree Law No. 1,350 of April 1, 1976.

Codelco is headed by a board of directors, with nine members appointed in accordance with the rules established in Law No. 20,392, enacted on November 4, 2009. The board of directors consists of four directors appointed from a company selected by the Board of Senior Management Public, a director chosen from a machine presented by the Copper Workers Federation (FTC), and an elected director presented jointly by the Federation of Copper Supervisors (FESUC) and the National Association of Copper Supervisors (ANSCO). The Chairman of the Board has been appointed by the President of the Republic, from among the directors.

The Executive President is appointed by the Board of Directors of the company and is in charge of the administration of the Corporation. Moreover, In 1966, Law No. 16,425 was enacted, which authorized the creation of joint ventures between the State of Chile and foreign copper producing companies. In these joint ventures, the Chilean State must have owned a minimum of 75% of the ownership of the deposits in the hands of foreign companies. In 1967, the El Teniente, Chuquicamata and Salvador mines became mixed companies, so the then National Copper Corporation acquired 51% of their ownership. The remaining 49% remained in the hands of the former owners: Braden Copper Company, a subsidiary of the Kennecott Corporation, in the case of El Teniente ; and Anaconda Copper Company, in the case of Chuquicamata and Salvador. With respect to Andina and Exotica, in 1967, they became the property of the National Copper Corporation by 25%, with the remainder held by Cerro Corporation and Anaconda, respectively.

Others

Additional Actors Playing a Smaller Role

  1. KGHM

It is one of the most well – respected mining companies in Poland, with headquarters located in the city of Lubin. It is a leading international producer of copper and silver, with more than 50 years of experience in the industry. In addition, it has operations in the United States, Canada and Chile.

In Chile, KGHM owns SCM Franke, which has a copper deposit in production 70 km southeast of Taltal and an exploration company called Mining and Explorations KGHMI (MEK), located in Antofagasta. KGHM also owns 55% of Sierra Gorda SCM, whose work is often found within the Antofagasta region. The owners of the remaining 45% are the Japanese companies of Sumitomo : Metal Mining (31.5%) and Sumitomo Corporation (13.5%).

  • LUMINA COPPER

SCM Minera Lumina Copper Chile is a company that belongs to the Japanese companies Pan Pacific Copper Co., Ltd. (77.37%) and Mitsui & Co., Ltd. (22.63%). Pan Pacific Copper Co., Ltd. is comprised of JX Holding, Inc. (51.50%) and Mitsui Mining & Smelting Co., Ltd (25.87%). SCM Minera Lumina Copper Chile owns Caserones, whose deposit was acquired in 2006 by Pan Pacific Copper Co., Ltd., under the name of Regalito. In March of 2007 it takes the name of Caserones del Cerro, where it is located.

  • LUNDIN MINING

In Chile, Lundin Mining is present through the Candelaria district (Operations of Minera Candelaria and Minera Ojos del Salado). The company is a member of the Mining Council through Minera Candelaria.

Operations in Chile

Candelaria (80% owned by Lundin Mining Corporation): Open and underground copper mine (Candelaria Norte), located in the Atacama region.

Year of commencement of operations : 1993.

Products: Copper and gold concentrates.

Workers 2016 : 1,438 own workers.

Production 2016 : 135,439 tons of fine copper and 81,885 ounces of gold.

Ojos del Salado (80%) : Underground copper complex, located in the Atacama region. Exploits the underground mines Santos and Alcaparrosa.

Year of commencement of operations : 1929.

Products : Copper and gold concentrates.

Workers as of 2016 : 108 of its own workers.

Production in 2016 : 25,369 tons of fine copper & 14,275 ounces of gold.

  • SQM

SQM is a global company focused on a variety of strategic industries for human development, such as health, food, clean energy, and the technology that moves the world. It carries five business lines, and in all of them, it maintains a world leadership position: The five include specialty vegetable nutrition (NVE in Spanish), Iodine and its derivatives, Lithium and its derivatives, Potassium, and Industrial Chemicals. It has developed a network of commercial offices in more than 20 countries, which allows it to sell its products to customers in 115 countries around the world. To achieve this global leadership, in its 50 years of history, SQM has made a decisive commitment to innovation and technological development, with strong investments in advanced human capital and a clear strategy of short, medium and long – term enactment. As heirs of the salt industry, they seek to reinvent it within five highly successful business lines, from the upper hand of a strong financial playing field.

  • TECK

Teck is a diversified resource company committed to responsible mining and mineral development, with its business units focused on copper, steel, zinc and energy coal, and is also an important producer of special metals such as germanium and indium. Its head office is located in Vancouver, Canada. The business owns 13 mines located in Canada, the United States, Chile and Peru, as well as a metallurgical complex in Canada. It is actively exploring for copper, zinc and gold in America, Asia-Pacific, Europe and Africa, holding experience in a wide range of activities related to mining and mineral processing including exploration, development, smelting, refining, safety, environmental protection, product management, recycling and research.Teck is present in Chile through the operation of the Quebrada Blanca copper mines, in the Tarapacá Region, and Carmen de Andacollo, in the Coquimbo Region.

Together, they have the capacity to produce between 110 and 125 thousand tons of copper per year and employ about 1,500 workers. In both operations, Teck is a proud partner of the National Mining Company (ENAMI), which holds 10% ownership in each. The company is also developing two projects to expand its production: Quebrada Blanca Phase 2, which considers the expansion of the existing operation, and the Relincho field, still undeveloped within the province of Huasco, Atacama Region. Teck also has an exploration program in Chile.

In addition, please refer to this EXCEL database attached list list of all small mining companies. Further details are provided there. One may see small and large miners, and more, listed in successive order.

Projects & Developments

One project is ACTUALIZACIÓN ESPERANZA – Planta Moly / Minera Centinela. The Esperanza mine has started with a process of optimizing its operations through two environmental impact statements (DIA) presented during 2013. The first optimization, called “Tercera Esperanza Project Update”, with DIA approved in May 2012, seeks to increase the availability of critical inputs (water, inhibitors and process reagents, etc.), incorporate new oxidized mineral resources located in areas set to be subsequently occupied by waste facilities, and the construction of a new molybdenum processing plant. In this first optimization, the “Molybdenum Plant” project represents the most important work. The location of the plant is in a sector adjacent to the collective flotation, in the Esperanza sector next to the existing concentrator plant. The process corresponds to a circuit of standard selective flotation at a treatment rate of 5.5 Ktpd, with the following stages: primary flotation, flotation cleaning, filtering, drying and storage of molybdenum concentrate produced. The “tail” sector of the process corresponds to the copper-gold concentrate that continues with its processes within the current concentrator plant.

Another major project currently in effect is called ENCUENTRO / Antofagasta Minerals S.A. The Encuentro Oxidos deposit is expected to produce around 50,000 tons of copper cathodes per year, using the existing capacity at El Tesoro. This initiative would allow the current SX-EW plant to continue producing at full capacity (100,000 tons per year). It has co – existed for more than eight years, helping to compensate for the decrease in production due to the fall in the laws of the current deposit where ore is extracted. This project contemplates new facilities for crushing and heap leaching, with a pipe that will direct the leaching solution or PLS (Pregnant Leach Solution) to the El Tesoro plant about 15 km away, for processing.

The highest grade ore will be crushed. It is then expected to be sent to the new heap leach facility, while the lower grade ore will be processed in a ROM leach pile. The group is currently analyzing ways to reduce this investment cost, even considering the supply of equipment from China, and the use of a project team, led by Antofagasta Minerals in place of an ordinary EPCM contractor.

Another project goes by the name of DESARROLLO DISTRITO CENTINELA – Encuentro Sulfuros y Esperanza Sur. The project works to increase the production of sulfur with the installation of a new concentrator plant and associated infrastructure. The Minera Centinela (or Sentinel Mine, in English) rightfully joined the Environmental Assessment System (SEA) of the Antofagasta Region the Environmental Impact Study (EIA) in May of 2015.

It is expected that, in its first stage, which would start up in 2019, the project would allow the addition of 140 thousand tons of fine copper. Within its second stage, in 2024, another 60 thousand tons will be added. In this way, in the next decade, Minera Centinela will reach a production count annually exceeding 400,000 tons. The initiative contemplates the execution of the project in two stages. The first corresponds to the development of the Esperanza Sur deposit, which has an estimated plan for the start of operation for the year 2019 and which will mean an investment of $ 2,700 million will be required. The second stage consists of the development of the Encuentro Súlfuros deposit, whose term of operation is projected for 2024, where $1,650 million will be invested.

Additionally, a fourth project calls itself LOS PELAMBRES / Minera Los Pelambres S.A. Antofagasta Minerals S.A. (Luksic Group, 60%), and a Japanese consortium made up of Nippon LP Resources B.V., (25%) in addition to MM LP Holding B.V. ( 15%), together comprise this initiative. The Los Pelambres copper deposit is located in the municipality of Salamanca, province of Choapa, in the IV Region of Coquimbo, a 300 km distance north of Santiago. It is located in the vicinity of the border with Argentina and 163 km east of Los Vilos, at 3,100 meters above sea level.

Another project worth noting is that of the AMPLIACIÓN MARGINAL LOS PELAMBRES – Fase I y II, which is currently split into two phases. Within this one, Antofagasta Minerals chooses to modify the old Marginal Expansion project by separating it into two phases, the first consisting of bringing the plant to a processing of 190 ktpd from the current 175 ktpd (net increase of 15 ktpd), through the installation of a new line of milling, as well as a new waterline, plus the construction of a desalination plant & its respective drive system. The second phase considers reaching 210 ktpd of processing, authorized in the first environmental impact study of the original project, plus the repowering of the primary crusher conveyor belts, capacity increase of the tailings dam and increase of size of the waste dump. The EIA has not quite been accepted for processing and is pending re-entry of the project.

Further details follow below :

Labor: 2,300 in construction stage and 241 in operation stage.

Treatment capacity: +15 ktpd in Phase I and +10 ktpd in Phase II, of sulphide ore.

 This is, overall, a greater expansion project that hopes to be fully realized by the end of 2022, respectively. Moreover, there remain many more projects not mentioned here. In addition, please refer to this EXCEL database attached list list. Further details are provided there. One may see projects and more listed in successive order. 

Geographical Implantation’s

These are mostly found on the northern half of Chile. Popular consensus incorrectly holds that they’re only located in this north region among the Atacama desert. The facts holds true for lithium, but for other metals, mining actually commences a few kilometers north of Santiago. Cerro Negro, El Soldado, and upwards are vastly noted regions for mining ; notice those spots on this map when directly ascending from the “Sandiego” hub marked in red letters. See it at the very bottom left corner of the yellow region on the map, to the left of the pink and right of the blue, right in the center. 

Metal Production in Chile

Metal products, in Chile, are very tied to the mining extraction industry. Most of the time, one will find the same actors / same locations in play, due to the weight and difficulty of carrying mining extracts. See sheet 2 of this EXCEL document for A FULL list of the major transformation plants in effect.

Last December, three smelters presented delays in complying with the new emission limits, so they had to paralyze their operations to adapt their facilities and processes. In Chile, there are seven smelters, of which three have refineries (Chuquicamata, Potrerillos and Ventanas), of which five are state – owned and two are privately – owned. The annual treatment capacity for each foundry unit may vary, where Chuquicamata maintains the largest capacity with 1,400 ktpa of concentrate, holding one of the most important functions in the world. The Chilean State enacted the DS 28 in 2013, where in its first legal Article, it declared that the emission standard for copper smelters and arsenic emitting sources is intended to protect the health of people and the environment throughout the national territory. As a result of its application, air emissions of particulate matter (PM), sulfur dioxide (SO2), arsenic (As) and mercury (Hg) will be reduced.

In summary, for already active operations, it is mentionable that the emitting source must capture and fix more than 95% of the sulfur and arsenic of the weight that enters the process. For future operations, the standard hardens by requiring a capture and fixation of 98% for sulfur and arsenic as a minimum. By 2017, three smelters already met the new standards imposed by a supreme decree enacted in 2013, these including Altonorte, which required an investment of $100 million reaching a catch of 97% , SO2, with more than 95% in As ; Chagres, which invested $70.5 million, achieving a capture of 98% of SO2 and 95.54% of As; and Ventanas, where investments were made for an amount of $159 million, reaching a catch greater than 95% for SO2 and 95.28% for As. In 2018, the four remaining smelters were in breach of the decree that would come into force in mid – December. Chuquicamata required improvements in the collection of dust and gases generated in its processes, which included the replacement of equipment with an investment of $948 million. In the case of Potrerillos, also Codelco, it has had to carry out work to improve the capture of gases and smoke treatment, budgeting $523.5 million.

Caletones, from El Teniente, considers the replacement of equipment for the treatment of slag, and an optimization in the process of drying and capture of gases, with an investment of $573.27 million. Enami, meanwhile, in its Hernán Videla Lira foundry in Paipote, allocated an investment of $57.96 million to increase the capture of gases in its processes and comply with DS 28/2013. By December 13, three smelters still had delays in complying with the new emission limits, so from that date, they had to paralyze their operations to adapt their facilities and processes in order to comply with what determined the new norm The foundries with drawbacks included Hernán Videla Lira from Enami, Chuquicamata, and Potrerillos from Codelco.

From the National Mining Company (Enami), it was reported that the operation would be paralyzed from December 13 to 23 to complete the work of modernizing Paipote. During this period, scheduled maintenance was scheduled to adjust its operations to the start-up of the tail gas plant, which would limit the emission of SO2 to the environment below 600 ppm, once the smelter restarted its activities. It is important to point out that this paralysis was not expected to produce losses in the state’s annual copper production, since the volumes could be recovered during the return to the operation.

As stated by the former Executive Vice President of Enami, André Sougarret, Enami’s strategy is divided into two stages, the first one being completed in 2018, that was to comply with DS 28 / 2013, and a second stage that would respond to a deeper intervention, the which would allow for world-class environmental and productivity standards. This second phase considered the construction of a new smelter for 2023, which is already finalizing its feasibility stage, allowing to double the current productive capacity from 350,000 tons of concentrate per year to 700,000 tons. A more complicated present confronts Codelco with its Potrerillos and Chuquicamata smelters, due to delays in the adaptation and installation of new equipment projects. The biggest complication was to carry out the work while the smelters continued to operate, which increased the risks, so each task had to be carried out with greater care, thus slowing down the work.

In the case of the Salvador Division, at the beginning of 2018, a fault was recorded as updating works were being carried out in Potrerillos, for which the state company was obliged to partially operate the smelter until the problems were solved; the process consumed about 22 full days for repairs.The Potrerillos Foundry had also scheduled the annual maintenance, to run from December 13, 2018 until the end of January 2019, but with the delays in the modernization, the company now plans to undertake a more exhaustive program that will take, according to the latest statements of the company, 45 days. The case of Chuquicamata is even more complex, since it is the Chilean smelter of greater capacity, and for reasons of delays in the adaptation of equipment and construction of the sulfuric acid plants, it should have paralyzed its activity as of December 13, for more than 80 days, according to clarifications of the company, projecting that it would operate once more in April – May.

In this division, there were two fusion lines: Oven Flash and Converter Teniente (CT), and by decision of Codelco, CT closed and will no longer be operational, due to not complying with all standards expected. To compensate for the low melting capacity by closing a line, the State will boost the Flash Furnace, but even so, the concentrate treatment capacity in Chuquicamata would drop by 400,000 tons per year, with respect to the previous capacity. One concern is how Codelco will face supply contracts in the short and medium terms, with the smelting stopped. The refinery should be supplied with anodes from Altonorte and its other operations to work at capacity.

Yet the largest impediment that exists is in the complexity of the concentrates that are treated in the Chuquicamata refinery since they have a high content of arsenic, which is not allowed in many foreign refineries. Therefore, a market investigation must be carried out. The refineries usually work most productively within long-term supply contracts, and the amount of concentrate that Chuquicamata will have available is considerable, so one is advised to look for smelters with capacity to treat these concentrates in the short term.

Finally, it can be mentioned that Chile is the largest producer of all concentrates in the world with 24% in 2016 and is projected to represent 26% by 2030. Despite this, Chile maintains a low participation in global copper smelting production, with only 8% in 2016, and it is further estimated that such active participation will decrease to 5% by 2030. In the case of refined copper, it also holds a low participation in total production, with 11% in 2016 and an anticipated 4% in 2030. The decrease is explicable as, for companies in this country, it is not an appealing or beneficial business endeavor to build refineries and foundries for such high investments and low returns altogether. 

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