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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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We own 57.5 per cent of the Escondida mine, a leading producer of copper concentrate and cathodes located in the Atacama Desert in northern Chile. Escondida’s two pits feed three concentrator plants, as well as two leaching operations (oxide and sulphide).

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We like commodities with favourable long-run characteristics on both the demand and supply sides of the equation. Read the top ten reasons why copper is important to our portfolio.

Key developments during FY2020

Escondida copper production in FY2020 increased by 4 per cent to 1,185 kilotonnes (kt), supported by record average concentrator throughput of 371 kilotonnes per day (ktpd), which offset expected grade decline, stoppages associated with the social unrest and COVID-19 impacts.

The Escondida Water Supply Expansion (EWSE) project was completed on time and budget in December 2019. Following the completion of the EWSE project, Escondida has eliminated water drawdown from aquifers for operational supply 10 years ahead of its FY2030 target.

The Centre of Integrated Operations (CIO) was inaugurated in July 2019 in BHP’s Santiago office and has since provided remote control services to the mine and process areas of Escondida and Spence. The CIO enables an operation that is safer and more productive by reducing people on-site and allowing them to work in a collaborative space.

Looking ahead

Production of between 940 and 1,030 kt is expected for FY2021, with a decline in copper grade of concentrator feed of approximately 4 per cent. Lower volumes reflect the need to continue to balance mine development and production requirements, with processing capacity at concentrators and leaching plants, as a result of a reduced operational workforce due to COVID-19. It is expected that production levels are likely to be impacted in FY2022 as a result of reduced operational workforce and material movement in FY2021. Guidance of an annual average of 1,200 kt of copper production over the next five years remains unchanged.

The BHP Operating System deployment and automated truck trial initiatives are expected to be completed in FY2021. In addition, Escondida will be undertaking studies on different material handling technologies to build an integrated suite of material handling projects that aims to combine innovative and disruptive technology and equipment solutions to increase mine productivity and improve costs competitiveness.

We expect these initiatives will allow Escondida to operate with a medium-term unit cost of less than US$1.10 per pound despite the continuation of grade decline and the increasing water costs.

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