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Pampa Norte

Consists of Cerro Colorado and Spence open-cut mines, producing copper cathode in northern Chile.

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Pampa Norte consists of two wholly owned assets in the Atacama Desert in northern Chile – Spence and Cerro Colorado. Spence and Cerro Colorado produce high-quality copper cathode, using oxide and sulphide ore treatment through leaching, solvent extraction and electrowinning processes.

Read more in our the Annual Report

Spence Growth Option: taking mining into the future 

Key developments during FY2018

Pampa Norte copper production for FY2018 increased by four per cent to 264 kt, supported by record copper cathode production of 200 kt at Spence for the full-year driven by higher throughput in the dry area through better maintenance and production practices, and the Spence Recovery Optimisation project implemented in December 2016, enabling higher recoveries.

In August 2017, the BHP Board approved an investment of  US$2.5 billion for the development of the Spence Growth Option (SGO). The project involves the design, engineering  and construction of a 95 kilotonnes per day (ktpd) concentrator  and the outsourcing of a 1,000 litre per second desalination  plant, creating up to 5,000 jobs during the construction phase.  SGO will extend the life of the mine by more than 50 years  and is expected to increase copper production capacity by  approximately 185 ktpa, with first production expected in FY2021. The current copper cathode stream will continue until FY2025.

Since the approval date, SGO has achieved key operational milestones, starting execution phase earlier than planned. Earthwork and foundations for the concentrator area have started and camp construction plan is on track, delivering 2,000 beds as of 30 June 2018. Furthermore, the desalination Build Own Operate Transfer (BOOT) contract has been awarded.

During FY2018, Spence reached an agreement with the Supervisors’ Union and signed a new contract effective for three years from 1 April 2018. On 12 June 2018, the company completed negotiations with the Workers’ Union that resulted in a new collective bargaining contract for three years, effective from 1 June 2018.

On 13 July 2018, Compañía Minera Cerro Colorado and its Supervisors and Staff Union signed a new collective bargaining agreement for three years effective from 1 July 2018.

BHP has entered into an agreement to sell Cerro Colorado to private equity manager EMR Capital. The sale is subject to financing and customary closing conditions, and is expected to be completed during the December 2018 quarter.

Looking ahead

Production at Spence is expected to be between 185 and 200 kt in FY2019, with volumes weighted to the second half as planned maintenance in May and June 2018 contributed to a lower stacking rate.

In line with operational initiatives under evaluation, Spence will continue evaluating materials handling and fleet replenishment options, with a view to fully leverage the use of technology at the mine site. This includes considering a redesign of the mine’s operational philosophy, with a crushing and conveying ore system complemented by autonomous trucks. The timing and sequencing of these options is pertinent to reducing health and safety risks and operating costs, with technology enabled solutions potentially significantly reducing risks associated with crash, collision and rollover, silica exposure, dust and greenhouse gas emissions.

The existing agreement between Cerro Colorado and the Operators and Maintainers Union expired on 31 August 2018. Cerro Colorado is currently in negotiations with the Union to sign a new agreement.

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