Antofagasta has announced that the capital expenditure for the Los Pelambres expansion project in Chile would increase by $400m to $1.7bn, owing to revised marine works, Covid-19 costs, and other factors.
According to the copper miner, nearly $235m of the increased cost pertains to the revised marine works, desalination plant, and pipeline.
The company said that Covid-19 costs and extension of the construction schedule amount to $140m. The remaining amount is due to other adjustments that include changes in input prices and exchange rate, said Antofagasta.
Completion of the expansion of the copper mine is now expected to occur in early H2 2022. At the time of approving the project, Antofagasta estimated to begin construction in early 2019, targeting first production in the second half of 2021.
However, the Covid-19 pandemic resulted in a four-month suspension of construction activities, which resumed in August 2020.
Antofagasta said that at the end of the fourth quarter of 2020, it had completed 45% of the Los Pelambres expansion project.
The company stated: “Given the high degree of interactions with the existing operations and the nearby communities, the very high manpower requirements during peak construction in the original project execution plan have been revised down to address the COVID-19 risks and restrictions.
“These restrictions are assumed to continue for the whole of 2021, limiting on-site manpower to approximately 75% of the original planned levels which results in the requirement to extend the original construction schedule.”
The miner is taking up the expansion project to increase copper production at the Los Pelambres mine in Coquimbo region from 40,000 tonnes in the first year to 70,000 tonnes towards the end of a 15-year period.
Antofagasta also revealed that the Zaldívar Chloride Leach project and Esperanza Sur pit in Chile are anticipated to reach first production in the first half of 2022.
Capital expenditure estimates for the two projects remain the same, said the company.
