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Reducing reliance on groundwater at Escondida

Escondida

We operate and own 57.5 per cent of the Escondida mine, which is a leading producer of copper concentrate and cathodes. Escondida, located in the Atacama Desert in northern Chile, is a copper porphyry deposit.

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Following the commissioning of the Escondida Water Supply project and ramp-up of the Los Colorados Concentrator in the September 2017 quarter, Escondida´s two open-cut mines feed three concentrator plants (which use grinding and flotation technologies to produce copper concentrate), as well as two leaching operations (oxide and sulphide).

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Key developments during FY2019

Escondida copper production in FY2019 decreased by 6 per cent to 1,135 kilotonnes (kt), as a consequence of an expected 12 per cent decline in copper grades, partially offset by a record level of ore milled reflecting a full year of operation with three concentrators.

The Escondida Water Supply Expansion (EWSE) project progressed according to schedule during FY2019 and is expected to deliver its first water in the first half of FY2020. The EWSE project comprises the expansion of the Escondida Water Supply conveyance system by 1,300 litres per second and the desalination water production by 800 litres per second. This project is key to enabling Escondida achieve its production plans while also reducing its reliance on groundwater sources. The proportion of desalinated water in use at Escondida at the end of FY2019 was 40 per cent. 

On 17 August 2018, Escondida successfully completed negotiations with Union N°1 and signed a new collective agreement, effective for 36 months from 1 August 2018. On 17 April 2019, Escondida reached an agreement with an intercompany union that includes 105 workers that were formerly part of Union N°1.

Looking ahead

Production of between 1,160 and 1,230 kt is expected for FY2020, reflecting a further uplift in ore milled and higher recoveries at the cathode process. 

Escondida plans to continue to unlock latent capacity through the maximisation of concentrator throughput, increased use of the cathode circuit and improvements in mine fleet performance. 

This will be enabled by focusing on continuous improvement and leveraged by the implementation of the BHP Operating System and the Maintenance Centre of Excellence. We will also implement technology projects to enhance our decision making and automate key activities. We expect these initiatives will allow Escondida to operate with a medium-term unit cost of less than US$1.15 per pound despite the continuation of grade decline and the increasing water costs as we progress toward our goal to cease freshwater usage altogether by CY2030.

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