Antamina approves US$1.3bn expansion

The board of Peruvian copper-zinc producer Minera Antamina has approved a US$1.29bn expansion project, the mine's owners announced Tuesday.Anglo-Australian BHP Billiton (NYSE: BHP), Anglo-Swiss Xstrata (LSE: XTA) and Canada's Teck (TSX: TCK) separately reported the plan to go ahead with a 38% increase in the processing rate to 130,000t/d.

The multinationals own 33.75%, 33.75% and 22.5%, respectively of Antamina. The remaining 10% is held by Japan's Mitsubishi. Each of the four partners has approved its respective share of capital expenditure, said BHP Billiton.

Output will grow by some 30% and the mine life is set to be extended six years to 2029, thanks to a 77% expansion of ore reserves to 745Mt completed in 2008.

Minera Antamina will borrow money and use cash flow to complete the project, said Teck.

Construction is due to start during the first quarter of 2010, with first output slated for late 2011 and commissioning for late 2012.

Works include expanding the concentrator plant, building a new 55km transmission line, enhancing water management and tailings storage systems and acquiring new mining equipment.

Antamina produced 74,600t of copper in 3Q09, down 14.4% year-on-year due to lower grades and recoveries. Zinc output rose by the same percentage to 109,600t and molybdenum production was more than halved at 1.5Mlb (680t).

The mine is in Peru's Ancash region.

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