Anglo-Swiss miner Xstrata (LSE: XTA) is advancing a US$293mn expansion project at its Lomas Bayas copper mine in northern Chile’s region II and is currently at the engineering works stage, a company spokesperson told BNamericas.

The project aims to extend the mine life by eight years until 2020. Works at the site started in mid-January and the project is expected to create close to 700 new jobs during construction.

The expansion at Lomas Bayas, which was approved by the company’s board in October last year, includes mining copper reserves from the Fortuna de Cobre deposit, located 3km from the current pit.

The project will maintain current production levels of 75,000t/y of copper cathodes and its commissioning is expected by 2012, when it is estimated that reserves from the current open pit will be depleted.

Apart from preparing the Fortuna de Cobre open pit, works include construction of systems to transport mined ore to the operation’s current processing plants.

Lomas Bayas has some of the world’s lowest copper grades for an operating mine, currently at 0.3%. The Fortuna de Cobre deposit holds some 350Mt grading 0.27% copper.

Mining the Fortuna de Cobre deposit is a long-standing objective of the company, which conducted another expansion project worth US$70mn in 2009 that increased production capacity from 60,000t/y to 75,000t/y.

Xstrata is also conducting exploration in order to find new resources for further expansions at Lomas Bayas and also at the larger Collahuasi copper mine in Chile’s region I, of which it owns a 44% stake, the spokesperson said.

An expansion project at Collahuasi, in which London-based Anglo American (LSE: AAL) also owns 44%, has already received environmental approval from Chilean authorities. The US$750mn project, which aims at increasing production to 600,000t/y of copper by 2015, will be evaluated by Xstrata’s board this year.

Lomas Bayas started operations in 1998, when it was owned by Canada’s Falconbridge, with an initial mine life of 15 years. Falconbridge was bought out by Xstrata in 2006, a deal which also included the Altonorte smelter in northern Chile and the Collahuasi stake.

In South America, Xstrata also owns a one-third stake in the Cerrejón coal mine in Colombia, the Tintaya copper mine and 33.75% of the Antamina copper-zinc mine in Peru, and the El Pachón copper project in Argentina.

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