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Spence

Pampa Norte

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.

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Spence Growth Option: taking mining into the future 

Key developments during FY2019

Pampa Norte copper production for FY2019 decreased by 7 per cent to 247 kt, mostly due to a fire event in the electrowinning plant at Spence in September 2018, which had a production impact of 18 kt. This was partially offset by a 19 per cent increase in production at Cerro Colorado due to higher throughput and recoveries.

The Spence Growth Option (SGO) to construct a 95 kilotonnes per day (ktpd) ore concentrator and the outsourcing of a 1,000 litre per second desalination plant progressed according to schedule and at the end of FY2019 had an overall progress of 60 per cent. The project is expected to incrementally increase copper production capacity by approximately 185 ktpa, with first production expected in the first half of FY2021. For more information about SGO, refer to section 6.4.

In July 2018, Compañía Minera Cerro Colorado and its Supervisors and Staff Union signed a new collective agreement for 36 months, effective from 1 July 2018. In September 2018, Cerro Colorado and the Operators and Maintainers Union N°1 signed a new collective agreement for 36 months, effective from 1 September 2018. On December 2018, BHP terminated the sale agreement of Cerro Colorado to the private equity manager, EMR Capital, as the financing conditions were not met by the buyer. BHP will continue to operate Cerro Colorado.

Looking ahead

Production at Pampa Norte is expected to be between 230 and 250 kt in FY2020, despite the expected 11 per cent decline in copper grades across both operations. Plans are on track to redesign the approach to operations at Spence to optimally balance the requirements of the concentrate and cathodes processes, as well as changes in the loading and hauling fleet following completion of the SGO. Spence will introduce a new Ultra-Class truck fleet over the medium term, with the first units expected to arrive during FY2020. This change, along with technology enabled solutions, is expected to lead to reduced health and safety risks and operating costs. 

Production at Cerro Colorado is expected to remain relatively stable during FY2020. The commissioning of a recovery optimisation project is expected to be completed during the first half of FY2020.

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