Los Bronces in transition phase while Anglo American focuses on value, Chile head says | Hotter Commodities

The process to place the smaller and less efficient of the two processing plants at Los Bronces on care and maintenance is expected to be completed by mid-2024 and comes as the company pushes value over volume, the chief executive officer of Anglo American Chile said

According to CEO Patricio Hidalgo, work on care and maintenance is currently underway and comes as Los Bronces undergoes a period of transition.

“The plant hasn’t been shut down yet; we’re aiming for around the middle of the year,” he told Fastmarkets in a recent interview.

“We need to finalize all the work for the care and maintenance, and we need to ensure the production line remains well taken care of for us to reopen it when the right conditions are there,” he said.

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Anglo American holds a 50.1% stake in Los Bronces, which is located in Chile’s central zone and produced 215,500 tonnes of copper last year. This was down by 20% from 2022 levels due to lower ore grades and continued ore hardness, as well as an electrical sub-station fire that interrupted plant facilities’ power supply for 16 days.

“The biggest challenge for Los Bronces, especially in short to mid-term, is that the mine has been mono-phasic, which means that we’ve been feeding ore from one phase, and we don’t have other phases open. Basically, you process what you get, and unfortunately, we’re getting harder ore and lower grades,” he said on Monday April 15 during the annual CESCO copper industry week in Santiago, Chile.

“That’s the biggest challenge that we have in the short-term and the reason why we made a decision to drive for value instead of volumes and the decision to shut down the Los Bronces plant,” he added.

According to Hidalgo, the value-over-volume decision will enable the business to significantly cut operating costs and improve competitiveness at both the mine and the plant, as well as reduce overheads, capital spend and reliance on external water sources.

The unfavorable ore characteristics in the current area of mining will continue to affect the operation until the next phase of the mine, where the grades are expected to be higher and the ore softer, he said. Development work for this phase is now under way and is expected to benefit production from early 2027.

“It’s a timing issue rather than a structural issue,” Hidalgo added.

The environmental permit for the Los Bronces open pit expansion and underground development was issued by the authorities in November. The expansion would take place in two phases — the current pit and a new underground area, with the latter in the sectoral permitting and studies stages, Hidalgo said.

Water shortages and desalination

Los Bronces has struggled with water shortages, and the company plans to secure a large portion of the mine’s water needs through a desalinated water supply from the start of 2026.

“We had a relatively normal year in 2023 in terms of water and also made the decision to stop one of the plants. As a result, our water availability increased on a relative basis. For the medium-term, we will be one of the off takers of the desalination plant, which is expected to come online by 2026 or so,” Hidalgo told Fastmarkets.

“The question is, until we get to that point, we don’t know what’s going to happen with the rainy season over the next few years. So we’re still subject to potential water scarcity throughout the period. When we eventually get the desalination plant ongoing, that obviously reduces our risk on water,” he said.

Anglo American plans to use the closure as an opportunity to take care of its liabilities in terms of environmental commitments, including the removal of tailings, Hidalgo said.

El Soldado

Anglo American is meanwhile also looking at the possibility of extending the mine life at its El Soldado copper mine, located in the Valparaíso region of Chile.

Production in 2023 was 39,500 tonnes and is expected to reduce to around 30,000-35,000 tonnes per year with the mine reaching end of life by mid-2028. The company recently received an environmental permit for phase five, allowing Anglo American to consider options that may enable a life extension.

“We continue to look at the different options that we have, including the potential expansion or extension of mine life,” Hidalgo said. “The biggest challenge is, how do we handle the pinch-point that we have with the current phase versus the new phase and making sure that we navigate that period to allow for an extension?”

“But we haven’t made a decision yet on El Soldado – a study is taking place as we speak,” he added.

Collahuasi

The company is meanwhile studying various debottlenecking options at its Collahuasi mine in Chile’s Tarapaca region.

Anglo American has a 44% stake in Collahuasi, which gave the company attributable production of 252,200 tonnes last year. Other shareholders are Glencore with 44% and Japan Collahuasi Resources, a consortium of Japanese companies led by Mitsui & Co., with a 12% stake.

The shareholders are also looking at the possibility of adding a fourth processing line and expanding the mine, Hidalgo noted.

“That would be an outcome of the studies, and obviously remains subject to another permitting process, given the size of the project,” he added.

Timing of that expansion is subject to the permitting process; assuming permit approval in 2027, first production could follow from around 2032, the company previously said.

A desalination plant is currently under construction and will meet a large portion of the mine’s water requirements when complete in 2026. It has been designed to accommodate capital-efficient expansion as the fourth processing line project progresses.

Anglo American’s copper operations in Chile produced 507,000 tonnes last year. For this year, guidance remains unchanged at 430,000-460,000 tonnes, Hidalgo said.

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