Codelco breaks ground at US$1.4B expansion of Salvador copper mine

Chile's state miner Codelco, the world's No. 1 copper producer, has broken ground at the US$1.4 billion expansion of the Salvador copper mine, which will extend the productive life of the aging operation by 47 years and increase output by almost 50%.

The Rajo Inca project will convert Salvador, in operation since 1959, from an underground mine to an open pit.

"Until now this division depended on three underground mines. The new Salvador will obtain all the contribution of the mineral from a single open pit, with copper grades 40% higher than the current ones, which will influence the increase in production and productivity," Juan Benavides, president of the board of directors, said in the statement.

The mine was expected to run out of ore this year, but the expansion - approved in January - gives Codelco access to another 796 million tonnes of mineralization, with an estimated 0.59% copper grade on average.

The Salvador division currently has the lowest productivity of any of the Chilean miner's deposits, generating just 50,600 tonnes, just under 3% of Codelco's total output, last year.

With surface exploitation, the mine will yield 90,000 tonnes per year. Full production at the new section is slated to begin in the first half of 2023.

Rajo Inca is one of six major projects the Chilean miner is advancing as part of its ten-year, US$40 billion initiative to upgrade its sprawling but depleting mines.

A new underground operation at the company's Chuquicamata division entered production in 2019, while a new mine level at the underground El Teniente mine will follow in 2023.

Codelco, which hands over all 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 tonnes of production in 2020.

It operates seven mines and four smelters, all in Chile.