Xstrata has received corporate approvals for $542m of investment to increase the life of its Ernest Henry Mining (EHM) operations in north-west Queensland, Australia, to at least 2024.

The extension of mine life involves conversion of an open pit mine to an underground mine as well as development of a related magnetite extraction facility.

Feasibility studies into the construction of a magnetite processing facility and the installation of full scale underground mining operations at EHM have resulted in a revised ore reserve estimate of 72 million tons at a grade of 1% copper, 22% magnetite and 0.5g-per-ton gold.

The total tonnage compared to earlier published underground reserves represents a 600% rise.

Ore will be principally mined from a key hoisting shaft that will be sunk to a 1,000m depth, annually generating six million tons at full capacity.

EHM will be able to produce 50,000t of copper and 70,000oz of gold per annum in concentrates from 2012 once processing from open-pit mining operations stops.

EHM’s existing concentrator will be revamped to match the underground mine production rate, which will enable constant milling at reduced throughput levels to provide better metallurgical recoveries and energy efficiencies.

For magnetite concentrates production, a separate extraction circuit will be erected.

EHM’s magnetite processing operation will annually generate 1.2 million tons of magnetite for export to Asia.

Development of the underground mine and magnetite plant is expected to begin in the first half of next year.

Xstrata Copper chief executive Charlie Sartain said the project is an important step towards sustaining its north Queensland copper operations, which makes a significant contribution to the Queensland economy.

“This is the second of five brownfield projects that Xstrata Copper is planning to move into the construction phase over the next nine months across our global operations, following the approval of the Lomas Bayas extension project in October,” he said.