* World No.1 copper mine output to reach 1.3 mln tonnes in
* BHP says selling all copper it contracted in China
* Permit for Chile energy project Kelar seen soon
By Alexandra Ulmer and Fabian Cambero
SANTIAGO, April 7 The world's biggest copper
mine, Chile's Escondida, will gradually boost its production
until it stabilizes around 1.3 million annual tonnes between
2015 and the end of the decade, controller BHP Billiton
"This year we said we would do 20 percent better than last
year, we're three-fourths of the way through our fiscal year
which is a June year-end, and we're on track to achieve this
year's target," BHP's head of base metals, Peter Beaven, told
reporters on Thursday in Santiago ahead of the annual CESCO/CRU
World Copper Conference.
The mine's copper output jumped 31.6 percent to roughly
1.076 million tonnes last year, as processing work and higher
ore grades boosted production after a strike-hit 2011.
BHP and fellow global miner Rio Tinto ,
which owns 30 percent of Escondida, have approved plans for a
$4.5 billion expansion to propel production at the massive mine.
As supply at Escondida and other key mines is expected to
rise, Beaven said it was possible the global copper market tilt
In addition to an uptick in production, the copper market is
nervously eyeing sagging demand from top metals consumer China.
"We're selling everything that we've contracted to sell in
China," Beaven said. "We should see different phases of demand
for copper but it will continue longer than steel or something
A wide-spread, surprise port strike in Chile had "limited
impact" on BHP, he said, though the company will have to shuffle
around some vessels.
A SLUMPING CHILE?
But while Beaven was upbeat about Escondida's future, he
struck a far more critical tone about the future of mining in
world No.1 copper producer Chile.
Steep power prices, dwindling ore grades, a tight labor
market and tricky access to water in the mineral-rich Atacama
desert are severely harming Chile's competitiveness, Beaven
"The decline in competitiveness could threaten investment,"
There are no easy solutions to the problems facing the
copper industry in Chile, which produces roughly a third of the
world's copper, Beaven added.
Energy-intensive miners are especially upset about pricey
power. Plans to build hydroelectric dams in pristine parts of
Patagonia and coal-fired thermoelectric plants in the Atacama
desert have faced major legal setbacks due to environmental
concerns, fueling high prices and putting pressure on the
"We still haven't seen any material progress on new build,"
Beaven added in reference to power projects. "We do have Kelar,
BHP said in November it had submitted plans for its
540-megawatt, $400 million Kelar natural gas plant project to
Chile's environmental impact assessment service for approval.
"We will hopefully get the permit for that very shortly,"