How BHP is transforming the world’s largest copper mine

As BHP looks to affirm its global copper dominance, the company plans to refurbish its flagship Escondida copper mine.

The Escondida operation has produced copper since the 1990s, so it’s only natural that the mine was going face declining grades at some point.

But BHP is not fazed, with a plan to unlock higher-grade deposits to offset this reality.

“BHP Chile has produced about 1.3 million tonnes of copper per year over the past five years and improving grades at the PL1 pushback at Escondida will enable this to increase in the short-term,” BHP Chile vice president development and strategic services Adam Favero said during a site tour this week.

“But the reality is that Escondida is a mature asset with over 30 years of production history, and in the coming years, the production will decline as the grade reduces from just over 0.9 per cent today to around 0.6 per cent in 2030.”

Favero said BHP was also facing higher ore hardness and increased cycle times and distances at Escondida, along with the prospect of demolishing the Los Colorados concentrator to access the higher grades that sit underneath it.

“We will have a production decline if we don’t take action,” he said.

“(This is) why we’ve been working hard in recent years to accelerate our growth studies to develop plans … primarily at Escondida, but also at Pampa Norte, to deliver growth in the 2030s where we’re targeting an average of 1.4 million tonnes of copper production per year.”

With Escondida boasting a mine life of 65 years, BHP won’t run out of copper; it will just be harder to get.

Favero explained the exploration opportunities available.

“Current production is focused on the Escondida and Escondida Norte pits, and we have options to further develop Escondida East Deep and the Pampa Escondida resources in the longer-term to complement the sulphide ore feed, as well as the potential to develop Pinta Verde to feed the oxide leach facilities in the future,” he said.

Pampa Escondida’s resources amount to around seven billion tonnes at 0.46 per cent copper, while Pinta Verde boasts 248 million tonnes of resources at 0.54 per cent.

As it further explores newer deposits, BHP will initially look to extend the life of Los Colorados before it is eventually demolished.

The life of the concentrator would be extended from the 2026–27 financial year (FY27) to the FY29, providing 130,000–145,000 tonnes per annum of production, with the option to extend it further to FY31 depending on its closure date.

“This is then complemented by the opportunity to build a new concentrator at Escondida to replace Los Colorados,” Favero said.

“Our concentrator strategy will leverage the latest flotation technologies to improve recoveries, and the concentrator program overall provides the most relevant contribution to our Chile growth program in the 2030s.”

BHP said the Los Colorados demolition would cost between $US0.4–0.7 billion of capital expenditure, with a final investment decision (FID) to be made in 2028–29.

The construction of a new concentrator to replace Los Colorados would cost $US4.4–5.9 billion and would have an FID in 2027–28, with first copper expected in 2031–32, delivering 220,000–260,000 tonnes of copper production per annum.