Chile's Codelco, the world's No. 1 copper producer, has begun underground operations at its century-old Chuquicamata mine, ahead of schedule and with more than 8,000 tonnes of ore already extracted since early April.
Block-caving, originally planned for May, began at the end of March, the state-owned miner said in a statement. Ore is being initially extracted by truck before starting commercial production, in the second half of the year. By then, a conveyor belt will carry rock to the concentrator plant, 14 km away.
Chuquicamata Division's general manager, Mauricio Barraza, said that the commencement of mining underground was a "symbolic milestone" in the transformation of the mine, Codelco's second largest.
Annual production after the full transition of Chuquicamata mine to underground extraction is projected to be 320,000 tonnes of fine copper and 15,000 tonnes of molybdenumThe last blast at the bottom of the open pit was carried out in November, though copper extraction goes on. The company has said it plans to gradually decrease activities there until mid-2020, when the very last explosion is projected to happen.
The $5.6 billion-switch to underground cave mining from open pit, part of Codelco's 10-year, $39 billion-overhaul of its core assets, is expected to extend Chuquicamata's life by at least 40 years. It will also allow the copper giant to keep up production rates, despite falling ore grades and increasing costs at its operations.
Annual production from "Chuqui" - as locals call it - after it has fully transitioned to underground extraction is projected to be 320,000 tonnes of fine copper and 15,000 tonnes of molybdenum.
Codelco, which hands over all of its profits to the state, holds vast copper deposits, accounting for 10% of the world's known proven and probable reserves and about 11% of the global annual copper output with 1.8 million metric tonnes of production.
Chuquicamata and the nearby by Radomiro Tomic mines produced 653,000 tonnes of the company's total 1.8 million tonnes of output last year, which was almost 4% less than in 2017.
Production decline, together with lower copper prices and higher costs, saw the company's annual profits drop by a third last year to $2 billion, not counting paper losses worth almost $400 million, as it wrote down the value of its assets, including its Ventanas smelter and the open pit at its Salvador division.