Production at Chilean state-owned copper company Codelco’s Chuquicamata mine in northern region II is expected to fall by one-third over the next three years due to a planned reduction of ore mining and processing capacity at the site, a Sindicato Minero Codelco Norte union source told BNamericas.

“Over the next three years, Chuquicamata will stop producing the equivalent of what it turns out in a year,” the source said, adding the union and management of the Codelco Norte division have already created a joint commission to discuss ways to avoid job losses as a result of the lower output.

The company said it is evaluating extending open pit operations at Chuquicamata until 2020, two years later than previously scheduled. The move came as a result of a geo-mechanical survey at the site that reported the mine’s productive instability issue was solved. The extension aims at having more time to develop the project to start underground mining at Chuquicamata.

Company executives said a decision on the issue would be made in mid-2010. The project to start underground output includes a US$1.9bn investment and is currently under evaluation by environmental regulator Conama.

The underground project aims at prolonging production from Chuquicamata, the company’s largest mine, as all expansions to the pit will likely be depleted of reserves by the end of the decade. Chuquicamata’s underground operations are expected to produce 340,000t/y of fine copper.

No official production figures at Chuquicamata are available. However, output in 2009 at Codelco Norte – the miner’s largest division – totaled 875,000t, of which 307,600t corresponded to the division’s Radomiro Tomic mine, Codelco previously reported.

The creation of the commission, which will also discuss ways to face the closure of the Mina Sur deposit that has a mine life of 2-4 years, was part of pay negotiations the union conducted over the last weeks with the division’s management.

As a result of the talks, workers received a 4% wage increase, an end-of-negotiation bonus worth 11.9mn pesos (US$22,300) and a 3mn-peso soft loan payable over the 38 months the new collective contract will last. The union is comprised of nearly 600 workers.

Codelco is the world’s largest copper producer.

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