by Staff Writers
Santiago, Chile (UPI) Jul 19, 2011
Chile's Sierra Gorda copper-molybdenum mining project is moving ahead with a $1 billion participation from Fluor Corp.
The Sierra Gorda mine in the Atacama Desert in northern Chile is expected to come on stream in 2014 with Fluor's projection management, responding to a global surge in demand for the minerals.
The exact financial arrangements surrounding Fluor's participation aren't clear but Canada's Quadra FNX Mining Ltd. says the project will entail at last $3 billion of spending overall.
The company expects to start the work with a daily throughput of 110,000 tons of ores increasing to 190,000 tons within four years. The mine is expected to last about 20 years.
The bulk of the copper concentrates produced at the mine will be sent to the port of Mejillones, from which it will be shipped to global smelters. Molybdenum concentrate will be bagged on site for sale locally and overseas, the company said.
Oxide mineralization will be stockpiled separately for treatment in a possible future heap leach operation.
There were no immediate earnings estimates for the initial period or for the operation's full life but the mine's revenue stream is assured as global demand continues to outstrip supply.
Chile is already the world's largest producer of copper. As recovery gathers momentum, global copper demand will outstrip supply for the next two years amid continuing strong demand from China.
Demand in 2011 could exceed supply by 635,000 tons, the biggest deficit since 2004, compared with 234,000 tons in 2010, industry sources.
The Sierra Gorda mine is estimated to hold 2 billion tons of sulfides. It is likely to be run as a conventional open pit operation.
Fluor said its scope of work on the project will include providing engineering, procurement and construction management services for the mine's processing plant.
Global demand for natural resources continues to be a strong driver for Fluor's services in the mining sector, said Rick Koumouris, senior vice president and general manager of Fluor's mining and metals business line.
Quadra FNX Mining Ltd. is a mid-tier copper mining company with corporate offices in Vancouver, British Columbia; and Toronto. The company produces copper and platinum group metals from its operating mines in Arizona, Nevada, Chile and Canada.
The company possesses several other advanced development projects, including the Malmbjerg molybdenum development project in Greenland and the Victoria project, an advanced exploration project in Sudbury, Ontario. Quadra FNX employs approximately 1,900 people in North and South America.
Fluor Corp. designs, builds and maintains construction, engineering, procurement and commissioning projects world. The company has headquarters in Irving, Texas, and reported revenue of $20.8 billion in 2010.
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