Canada’s Teck Resources is set to start work on the $5bn expansion of its Quebrada Blanca mine in November, Chile Mining Minister Baldo Prokurica said on Tuesday. It’s one of five large copper projects in Chile that have received environmental approval this year and are pending the final go- ahead by boards. Others include Antofagasta Plc’s $1.3bn investment at Los Pelambres and KGHM Polska Miedz SA’s $2bn spend at Sierra Gorda.
“If you are a miner, Quebrada Blanca going ahead is definitely a good sign,” Andrew Cosgrove, a senior analyst at Bloomberg Intelligence, said by telephone. “This tells you that you don’t need a $7,000 per ton copper price to get a lot of projects done.”
Copper has slumped 16% from an early-June peak to $6,147 as escalating US-China trade tensions threaten global growth. But demand for the metal used in everything from wiring to batteries is expected to increase as electric-vehicle sales expand. Bloomberg Intelligence sees the market in tight balance for the next two years and probably falling into deficit around 2020.
“Companies like Teck or Anglo American play the long game and they’re not too concerned with movements within a one- or two-year period,” Cosgrove said. “If there’s a good enough project out there and you’ve got the funding for it, then that’s great. We are going to need that supply.”
Teck’s looking for a partner to develop the Quebrada Blanca 2 project before making a final decision on moving forward. The expansion will boost the mine’s annual output to about 300,000 tonnes in the first five years from 23,000 tonnes in 2017.
“We continue to progress engineering work on the Quebrada Blanca Phase 2 project in anticipation of a development decision in the fourth quarter,” a company official said in an emailed response to questions.
“A decision to proceed with development will be contingent upon regulatory approvals and market conditions, among other considerations.” The Chilean government is taking measures to reduce the number of permits and the time it takes companies to obtain licenses to open mines, Prokurica said. The Teck-Goldcorp Inc joint venture NuevaUnion and Codelco’s Rajo Inca projects are expected to file for environmental approval in September, he said.
In Peru, Anglo American Plc gave the green light to its Quellaveco copper project in July. Building the mine will cost as much as $5.3bn and it will produce about 300,000 tons a year. Quellaveco is one of only a handful of new mines under construction globally.