Xstrata plc has approved the development of its major, long-life Las Bambas copper project in southern Peru’s Apurímac region. Project development will entail investment of $4.2 billion, with construction scheduled to start in the third quarter of 2011, subject to regulatory approvals.
Xstrata’s August 3, 2010, announcement of development approval for Las Bambas came less than a month after its July 7 announcement of plans to proceed with the $1.47-billion Antapaccay expansion to its Tintaya operation (E&MJ, July/August 2010, p. 12). Together, the projects will establish Southern Peru as a first-tier copper-producing division for Xstrata.
Las Bambas will be have initial design capacity of 400,000 mt/y of copper in concentrate, including significant gold, silver and molybdenum byproducts. First ore is expected to be processed in the second quarter of 2014, with full production to be reached by the end of that year. Production costs are expected to be in the industry’s lowest quartile. A substantial resource base contained within three open-pit mines provides for a mine life of at least 18 years.
Located 150 km apart, the Las Bambas and Antapaccay projects will benefit from important synergies. Concentrates from Las Bambas will be pumped through a 215-km pipeline to a molybdenum and filter plant close to Tintaya-Antapaccay and then transported by the same railroad to Matarani port. The projects will share the existing Tintaya road network, a connecting road along the pipeline corridor, an established logistics center in Arequipa, and the expanded existing Matarani port facilities. They will benefit from shared management and administrative support functions to minimize overheads. While they will be developed under separate project management organization structures, key work teams will move sequentially from construction of Antapaccay to the Las Bambas project.
Bechtel has project development contracts for both projects.
Xstrata Copper’s standard concentrator design has been applied to both the Las Bambas and Antapaccay projects, and the standardization of equipment and engineering has resulted in reduced capital costs and delivery timelines, together with important savings associated with common spare parts, training requirements, and operational and maintenance systems.
Las Bambas ore will be mined at a rate of 51.1 million mt/y and processed in a 140,000-mt/d sulphide grinding/flotation concentrator. The current Las Bambas mineral resource estimate stands at 1.13 billion mt of copper mineralization at a grade of 0.77% copper, using a 0.3% copper cut-off grade. Final government approvals of the Environmental and Social Impact Assessment and other permits are expected in the first half of 2011.
Xstrata Copper Chief Executive Charlie Sartain said: “Over the past six years, we have rapidly transformed Las Bambas from an early-stage exploration prospect with no defined mineral resources to a significant project with resources of over 1 billion mt that will support a long-life, low-cost mining operation and benefit from significant synergies with the Tintaya-Antapaccay expansion project. This latest approval reflects our confidence in Peru’s longstanding fiscal and legal stability and is an important milestone in our strategy to progressively increase total annual copper production by 50% to almost 1.5 million mt by the end of 2014 through the construction of five brownfield expansion projects, all of which are under development, and now the greenfield Las Bambas project.”