Chile's state copper firm outlines lifeline plan for Salvador mine

SANTIAGO (Reuters) - Chile’s state copper miner, Codelco, has submitted an environmental impact assessment of its plans to overhaul its aging Salvador deposit that would sharply increase its production and extend its life by 40 years.

The Rajo Inca project would convert the existing mine, which has been in operation since 1959 and is due to run dry in its current state in 2021, to an open cast mine from an underground one.

Codelco said the mine’s overhaul would involve an investment of about $1 billion, and increase production to 90,000 tonnes of refined copper from the 62,000 tonnes produced last year. It said the new mine should be operational by 2021.

“Through various drilling campaigns, we have identified copper reserves of 900 million tonnes of ore, with average ore grades of 0.59 percent, which would prolong the useful life of the division and its operational continuity for at least four decades,” Codelco’s chief executive, Nelson Pizarro, said in a statement emailed to Reuters.

Codelco, the world’s largest copper producer, plans to raise up to $1 billion next year to help finance a $39 billion, 10-year overhaul of its existing mines, Chairman Juan Benavides told Reuters in an interview earlier this month. [L8N1WP4P5]

The company has long battled to keep a lid on costs at Salvador, which has the lowest productivity of any of the copper miner´s deposits, accounting for just under 4 percent of its total production last year.

(In this story Codelco corrects figures in paragraph 4 to 900 million tonnes of ore (instead of 1.5 billion tonnes) and 0.59 percent (instead of 0.69 percent).)

Reporting by Aislinn Laing; Editing by Peter Cooney