Antofagasta plc approved the development of the $1.3 billion Antucoya copper project. It also sold a 30% stake to Marubeni Corp. for $350 million. The two companies expect to close the transaction during the second half of 2012.

Antucoya is a copper oxide deposit located in Chile’s Antofagasta Region approximately 45 km east of Antofagasta’s Michilla mine. The project is expected to produce an average of 80,000 metric tons per year (mt/y) of copper cathodes through a standard heap-leach process, and is expected to have a mine life of approximately 20 years, with proved and probable ore reserves of 642 million mt, grading 0.35% copper.

“Antucoya represents another important step in the growth of the Group, which should lift total group production to around 800,000 mt of copper by 2015,” said Marcelo Awad, CEO, Antofagasta Minerals S.A. “We have worked closely with Marubeni for many years, first as one of our partners at Los Pelambres, and more recently as our partner at Esperanza and El Tesoro. We are delighted that we have this opportunity to further extend this relationship.”

While the project will be one of the lowest copper-grade green-field projects to be developed in Chile, there are a number of compensating factors. The deposit is relatively shallow, reducing the duration and cost of the pre-stripping, and the operational stripping ratio is also low, with a waste to ore ratio of approximately 1:1. The deposit is also located within a well-developed mining area, with good pre-existing infrastructure. The operation will use untreated seawater in its process. A sulphur burning plant is expected to be constructed to supply sulphuric acid to the operation, reducing the overall cost of the acid supply. Construction of the project is expected to take approximately two and a half years, followed by a ramp up period of production which is expected to start during 2014. The environmental impact assessment for the project was approved in June 2011.