Chile's owned Codelco, the world's No.1 copper producer, has approved a scaled-back version of an ambitious, but necessary plan to convert its open pit Chuquicamata mine into an underground operation.
Century-old Chuquicamata, the company's second largest copper operation by size, is running out of profitable ore and has to switch to an underground mine. This will allow Codelco keep production rates despite falling ore grades and increasing costs at its assets.
The $4.9 billion-investment, part of Codelco's 10-year, $39 billion overhaul of its core mines, will extend Chuqicamata's life by another 50 years.
The move comes on the heels of Chile's government decision to inject $1 billion into the state miner to help it fund the upgrade of its aging mines.
The company, which hands over all of its profits to the state, holds vast copper deposits, accounting for 10% of the world's known proven and probable reserves and about 11% of the global annual copper output with 1.8 million metric tonnes of production.
Last year, Chuquicamata produced 330,900 tonnes of copper, out of Codelco's total of 1.734 million tonnes.