Canadian Mining Journal

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Latin America 2003 mining wrap (first of three parts)

It could be argued that two contrasting themes dominated Latin America's mining sector 2003. On the positive side,...



It could be argued that two contrasting themes dominated Latin America’s mining sector 2003. On the positive side, rising metal prices created new opportunities and a flurry of activity, especially towards the end of the year. But on the other side of the coin, two emblematic projects, El Desquite in Argentina and Tambogrande in Peru, demonstrated how community issues can increasingly make or break a project.

ARGENTINA

Reno-based Meridian Gold halted development of its US$100-million El Desquite gold mine near Esquel in southern Argentina after 81% of Esquel voters said in March they opposed constructionoriginally slated to start this yearof the 300,000-oz/y project.

Canada’s Barrick Gold started construction late in the year of its US$455-million Veladero gold mine in the country’s northwest. It is expected to produce 530,000 oz/y gold over 13 years from late 2005, at direct costs of US$155/oz.

Canadian Wheaton River’s acquisition of a 37.5% stake in the Alumbrera gold-copper mine (12.5% from BHP Billiton and 25% from Rio Tinto) helped to boost its third quarter net earnings to US$14.7 million from US$949,000 year-on-year.

CHILE

State copper giant Codelco’s decision to withhold 200,000 tonnes of the metal this year from the market in order to strengthen demand, with notable negative effects to its bottom-line, appeared to have paid off at year-end as prices soared to six-year highs, helped by a strike at Codelco’s Andina division among other factors.

Anglo-Australian miner BHP Billiton announced in October the decision to end cutbacks of some 200,000 t/y at its majority-owned Escondida copper mine in northern Chile from January 2004, allowing the enormous open-pit operation to meet capacity of 1.25 million tonnes next year.

Earlier, Escondida’s owners gave the go-ahead to the US$400-million Escondida Norte copper project, earmarked to start production in fourth quarter 2005, to top up millfeed from the existing Escondida operation with higher grade ore.

Environmental regulators approved the environmental impact statement for Codelco’s US$600-million open-pit Gaby project, slated to produce 170,000 t/y copper cathodes after a 19-month construction period. Codelco’s board has yet to give the project the green light.

The owners of the Cerro Casale gold-copper projectled by Vancouverite Placer Domeannounced plans to update the feasibility study by March 2004 and start talks with potential backers for the US$1.43-billion open-pit mine.

The boards of Canadian companies Kinross Gold and Bema Gold officially announced in December the restart of operationsfrom late 2004at their Refugio gold mine in northern Chile a rate of 230,000 oz to 260,000 oz/y for US$71 million.