The high-grade oxide ore is crushed and leached on heaps and low-grade oxide ore is sent directly to leach dumps as run-of-mine ore. The resultant solution is collected and sent to the SX-EW plant, which selectively removes the copper and leaves behind the remaining ions in the aqueous solution. The electrowinning process uses electrolysis to produce high-purity LME Grade “A” copper cathodes.
Mantoverde owns a state-of-the-art desalination plant, which is located on the coast approximately 40 kilometers west of the mine. Our desalination plant supplies all water requirements for our current operations at Mantoverde with 120 liters per second and will supply all water requirements for our expanded operation following the completion of the MV Development Project with 380 liters per second.
Annual production
The SX-EW plant has a production capacity of 60 thousand tonnes per annum of high-purity copper cathodes, with current production in the range of approximately 40 to 50 thousand tonnes per annum.
MV Development Project (Expansion Project)
The MV Development Project (MVDP) is the brownfield expansion project at Mantoverde. The project’s $784 million projected capital expenditure costs are fully financed and completion is expected to enable us to process 236 million tonnes of copper sulfide reserves with a current 21-year expected mine life, in addition to our existing oxide mining process.
Upon completion of the MV Development Project, we expect to increase the production at Mantoverde to approximately 122 thousand tonnes of copper in 2024 at an AISC of US$1.64 per payable pound; AISC will benefit from approximately 31 thousand ounces of gold per year in by-product over the life of the mine, beginning in the first year following completion of the project.
The MVDP will involve the addition of a sulfide concentrator and tailings storage facility, and the expansion of our existing state-of-the-art desalination plant. Given the scarcity of water in Chile, particularly for use at mining operations, we believe that our ability to supply Mantoverde with consistent and expandable levels of water from our desalination plant provides us with a competitive advantage.
HIghlights of the Expansion Project
- The feasibility study for the MVDP was completed in June 2018, and the Environmental Impact Assessment was approved by the authorities during that same year. Construction is subject to a “lump sum turnkey” engineering, procurement and construction contract with Ausenco that significantly limits our construction cost risk.
- The capital cost of the project is estimated to be US$783 million and represents a capital intensity of approximately US$12,500 per tonne, which is substantially lower than the Latin American industry average of approximately US$20,000 per tonne as calculated by Wood Mackenzie [need to indicate the date of the report]. This is due to the relatively high grade of the ore together with the benefit of leveraging substantial existing infrastructure.
- In February 2021, we secured a US$572 million debt financing package to fund the construction of the MVDP with a lending syndicate of international banks and export credit agencies, which comprises senior secured amortizing project debt facilities in an aggregate amount of US$520 million and a US$52 million senior secured closure bonding facility.
- In addition, as part of the financing of MVDP, Mitsubishi Materials acquired a 30% interest in Mantoverde for US$275 million, subject to an additional contingent payment of US$20 million upon the satisfaction of technical requirements related to the increase in project ore reserves containing 500,000 tonnes of contained copper.
- Mitsubishi Materials also agreed to provide a US$60 million cost overrun facility in exchange for additional offtake of copper concentrate production. Construction on the MVDP commenced in February 2021 and is scheduled to be completed by 2024.
Mantoverde/Santo Domingo Synergies Analysis
In Q4 2021, we started work to identify and refine potential synergies between the Mantoverde and Santo Domingo Project. The Santo Domingo Project is located ~35 kilometres northeast of the Mantoverde mine and offers significant potential synergies opportunities for:
- Infrastructure sharing (including power, water, pipelines, port),
- Transportation synergies for concentrate shipment,
- Potential enabling of product lines (additional iron or cobalt production from Mantoverde, processing oxide ore from Santo Domingo),
- Potential integrated operating approach, and
- Construction synergies (including project teams and camp).
We expect to release a synergies study and integration plan in September 2022.
Additional Growth Opportunities
The MV Phase II Expansion is an opportunity to add a second ball mill to potentially provide incremental production of approximately 30 thousand tonnes of copper per year by 2026, which would increase production at Mantoverde to over 136 thousand tonnes of copper per year.
The estimated capital cost of the MV Phase II Expansion is US$326 million, which represents a capital intensity of approximately US$11,800 per tonne.
As an alternative to the MV Phase II Expansion, the MV Second Line Expansion is an opportunity to add a second 32-thousand-tonne-per-day concentrator to provide incremental production of approximately 50 thousand tonnes of copper per year, which we expect would increase production at Mantoverde to over 186 thousand tonnes of copper per year.
In addition to the MV Phase II Expansion and the MV Second Line Expansion, there is opportunity to extract approximately 500 thousand tonnes per annum of magnetite and 800 tonnes per annum of cobalt from waste streams, which would be by-products that contribute to a reduction of AISC.