Mining is a long-term business and timescales can run into decades. The period from initial exploration to the start of production can exceed 10 years and, depending on the nature of the project and the market conditions, it may take more than five years of operation to recoup the initial investment.
For geological reasons, copper deposits frequently have higher-grade material nearer the surface and therefore grade declines with depth. This means that unless action is taken, such as an expansion, copper production declines as a mine gets older. Also, as an open pit gets deeper, haulage distances and rock hardness increase, and this, combined with the declining grade, leads to higher unit costs. Large long-life mines will have several expansions during their lives. The current expansion at our 21-year-old Los Pelambres mine is its fourth.
Our mining operations depend on a range of key inputs such as energy, water, labour, sulphuric acid and fuel. The management of these inputs has a significant impact on operating costs and the sustainability of mining operations, and ensuring the long-term supply of key inputs is a vital part of the business.
As part of our commitment to mitigating and adapting to climate change, all of our mining operations will use 100% renewable energy from 2022 and approximately 90% of mining division’s water will be either sea or recycled water by 2025.