Collahuasi Copper Mine, Chile

Collahuasi copper mine is situated in northern Chile, about 180km southeast of the port of Iquique, at an altitude of 4,000m. The The mine is 44%-owned by Xstrata plc (following its acquisition of Falconbridge Ltd in 2006) in joint venture with Anglo American (44%) and a Japanese consortium (12%) comprising Japan Collahuasi Resources BV, Mitsui & Co. Ltd., Nippon Mining & Metals Co. Ltd. and Mitsui Mining & Smelting Co. Ltd. The operating company is Cia. Minera Doña Ines de Collahuasi.

Lying in an area of historical copper mining, the deposit was outlined in 1991 after exploration by Shell, Chevron and Falconbridge in the late 1980s. The mine was commissioned in April 1999 at a cost of US$1.76bn. During 2004, the project partners completed a $584m expansion programme at the mine, giving it a long-term capacity of 500,000t/yr of copper.

GEOLOGY AND RESERVES

Collahuasi is based on a typical low-grade copper porphyry, comprising three ore zones: the major Ujina and Rosario deposits consisting of secondary, enriched sulphides and oxides and the Huinquintipa oxide deposit.

The major ore minerals are chalcocite, chalcopyrite and bornite. Oxide mineralisation occurs mainly as chrysocolla with minor brochantite, native copper, and copper-iron-manganese oxides and hydroxides.

At the end of 2005, Collahuasi had proven and probable reserves totalling 1,800Mt grading 0.90% copper. In 2005, a preliminary resource estimate for the Rosario Oeste zone was announced, at an inferred resource of 248Mt grading 1.54% copper.

OPEN-PIT MINING

The Ujina and Huinquintipa zones were mined first, with a transition to the Rosario orebody completed during 2004. Stripping at Rosario began in 2002. The stripping ratio at Ujina averages 4.4:1 (waste: ore) with a 15m bench height. Huinquintipa is somewhat smaller. The design mining rate of 360,000t/d of rock was achieved in Year 1, involving the blasting of 750,000t of material every two days.

Equipment used at Collahuasi includes five Bucyrus-Erie 49R III electric drills and a Drilltech T60KL diesel drill, 40 Komatsu 830E haul trucks and five Bucyrus-Erie 495BI electric rope shovels. Two Krupp Fördertechnik 6,000t/hr semi-mobile crushing plants, one used in each pit initially, provide substantial in-pit haulage cost savings.

PROCESSING

The processing area consists of both oxide and sulphide plants. Oxide and mixed ores are treated by heap-leaching, solvent-extraction and electro-winning (SX-EW). Sulphide ore is crushed, ground and treated by flotation.

Run-of-mine sulphide ore enters the primary gyratory crusher prior to transport to two parallel grinding circuits, each consisting of a SAG mill and a ball mill. Secondary closed circuit grinding includes cyclone classifiers, from which the overflow feeds the flotation circuit. Flotation concentrate is thickened to 50% solids for slurry transport in a 200km-long pipeline to Punta Patache, 65km south of Iquique, where it is thickened and filtered before shipment worldwide. An expansion to the concentrator was completed during 2004, and a further expansion, to give a capacity of 675,000t/yr of copper, is being studied.

Run-of-mine oxide ore is reduced to -10mm by three-stage crushing. The fine ore is agglomerated with sulphuric acid and water before being conveyed to the leach pads. Copper is recovered from the pregnant leach solution in the solvent-extraction plant, where the copper is stripped using organic solutions; the stripped liquor is then returned to the leach pads for re-use.

The strip solution is cleaned using dilute acid and flotation, and is filtered prior to the electro-winning phase, where the copper is plated onto electrolysis cathodes. These are stripped by the Kidd process on a seven-day cycle, the cathode copper being transported by road to Iquique for export.

Construction of a molybdenum-recovery plant began in early 2005, with first production scheduled for early 2006.

PRODUCTION

In 2005, Cia Minera Doña Inés de Collahuasi produced 488,600t of copper in concentrate, plus 68,600t of cathode copper. The transition from processing mainly oxide ores to sulphides has led to cathode copper production having fallen since 2003, while the output of copper-in-concentrate has been markedly higher. In December 2005, the company commissioned a US$36m molybdenum recovery plant that has a capacity of 7,500t/y of contained moly. Moly production in 2006 was expected to be around 3,800t, with production increasing over time as higher-grade areas of the Rosario orebody are accessed.

ENVIRONMENT

As the environment at Collahuasi is harsh and fragile, ecological issues have a top priority. Collahuasi is a zero-discharge operation, with much of its water being recycled. An extensive environmental monitoring system is in place along with research projects in high altitude operations.

Collahuasi achieved its ISO 14001 environmental management certification in 2000.

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