CHAPTER 4 TRANS-BOUNDARY MINING PROJECTS (ENGLISH VERSION)
| Jurisdiction | Derecho Internacional |
(Nov 1997)
TRANS-BOUNDARY MINING PROJECTS (ENGLISH VERSION)
Cambior Chile S.A.
Santiago, Chile
Prepared for Delivery at the Rocky Mountain Mineral Law Foundation Special Institute on Mineral Development in Latin America
November 3 & 4, 1997
at
Santiago, Chile
1. Introduction
The mining companies are beginning to perceive the global integration effects that were begun a while ago by the governments of the Republics of Argentina and Chile.
In effect, there is no doubt that the political decisions of both governments, in matters relating to integration, have been correct, since they have included not only procedural matters relating to customs, national airspace, immigration, labour related issues, transportation, and commerce among many other areas, but also in issues which refer to mining activities, that permits re-evaluating and reactivating assets that have been dormant for many years and that now can become realities.
The companies would have preferred that integration happen faster; that the will to advance in these matters would have meant issuing quick and simple resolutions or decrees by each government smoothing the way so that the mining companies could realize their exploration projects in the Cordillera frontier areas, put people to work on the common frontier, move equipment and vehicles to and fro from one country to the other or even better develop the feasibility of known parameters and prepare the construction of mines, plants and camps in said areas.
It seems that we understand this now, because we have been involved in the negotiation process, and it has not been easy. It has taken more than six years and involved a great deal of studying, the creation of a culture and an affinity to the issue, anticipating the benefits that integration reports, for one and/or the other country, and the removal of legal obstacles that have historical explanations and which do not fall to me to analyse.
The following paper that will be presented to the Special Institute on Mineral Development in Latin America, pretends to acquaint you with the experience of a mining company that has had to open the way between the differences of two countries at the beginning, and of the needs, that once they were made known to the authorities, allowed them to understand a concrete case of what a mining undertaking needed and still needs from the political will of two governments to create a secure legal framework for the companies and that a frontier
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project can be developed without hitches or disadvantages in regards to other similar projects without cross-border difficulties. It allows us to look back and observe all that has been gained and motivate other mining companies to see other possibilities and to develop their own projects.
2. The El Pachon Project
2.1 General Information
PACHON S.A. MINERA is a corporation established according to Argentine Law, and will be referred to as PACHON. PACHON is administered by it's shareholder, Cambior Inc. and it's Chilean subsidiary Cambior Chile S.A. PACHON is the owner of the mines and the El Pachon mining project, to which further reference will be made later.
PACHON TRANSPORTES Y SERVICIOS LIMITADA, is a limited liability partnership, that was established according to Chilean Law. This partnership will be the owner of the El Pachon project's operations located in the Chilean territory and will provide services and transportation to PACHON S.A. MINERA.
Both companies have as their only shareholders and partners: Cambior Inc., a Canadian mining corporation and Compañía Minera San José S.A. a Panamanian corporation.
2.2 Location
The El Pachon mining project is located in the Los Andes Cordillera approximately 3,600 metres above sea level, in the Province of San Juan in the Republic of Argentina. It is approximately 355 kilometres south-west of the city of San Juan, 200 kilometres north-west of the city of Mendoza and lies approximately 3 kilometres from the Chilean border. The Los Pelambres mining operation is located directly across the border (approximately 10 km in a straight line), in the Province of Choapa, the IV Region of Chile.
Please see the attached Plan N°1, with the location, access road and pipeline routes.
2.3 About the Mining Concessions
PACHON is the exclusive owner, in the Argentine territory, of 31 mines (mining concessions) that cover an approximate area of 1,855 hectares and 16 no man's land (demasías) claims totalling 149 hectares giving a total of 2,004 hectares located in the Cordillera area where the altitude reaches 4,000 metres above sea level.
PACHON holds titles to other claims (exploration concessions being processed) that superimpose on the claims previously mentioned or others nearby, being presented by the company or acquired from third parties.
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3. Project Description
3.1 Previous Studies
A study done in 1993 by RTZ Consultores, Chile (RTZC) contemplated a project of 500,000,000 tonnes mineable reserves with a grade of 0.75% copper at a cut-off grade of 0.5% copper.
3.2 Recent Studies
Since the end of 1994 Cambior Inc. and it's Chilean subsidiary Cambior Chile S.A. have been developing their own Pre-feasibility and Feasibility Studies. Confirming as pointed out by RTZ Consultores, that all indications are that the only possibility of developing and exploiting this Argentine deposit is to use the Chilean infrastructure of ports and roads, located at a distance 10 times less than the closest Argentine port.
3.3 Geological Resources
In accordance with the existing studies, there are proven and probable resources of 989,948,000 tonnes of ore with a grade of 0.61% Cu and 0.014% Mo.
We are dealing with a porphyry copper deposit, made up principally of pyrite and chalcopyrite, with a minor content of molybdenum and bornite.
3.4 Mineral Reserves
The mineable reserves, now are 879,411,000 tonnes of ore with a grade of 0.62% Cu and 0.015% Mo at a cut-off grade of 0.4% Cu; and 761,107,000 tonnes of waste for a ratio of waste to ore of 0.86:1.
The quantity of waste to be removed, to prepare the mine, is around 35,000,000 tonnes. The total movement of material would not exceed 90,000,000 tonnes per year.
3.5 Process Description
The extracted ore would be processed by conventional flotation methods to obtain a copper concentrate product and in lesser amounts a molybdenum concentrate. Previous to the flotation process, the ore from the mine would be unloaded into the crusher, which would reduce the size of the rock to less than 20 centimetres. The crushed material is then transported via conveyor belt to a stockpile, from where it will be sent via conveyor belt to the grinding plant. This grinding reduces the size of the ore to small sand size particles. The grinding process is wet, that is to say that water is added to the process, turning the ore into a pulp.
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The pulp ore will be concentrated to increase its copper content, separating the part of the ore without copper contained in the pulp. This process is done in flotation tanks. Reagents are added to these and air is injected from the bottom. As a reaction to the reagents, copper attaches itself to air bubbles rising from the bottom to the surface of the flotation cells. The material without copper remains in the cell residuals and is called tailings. The tailings, as pulp, will be sent to the tailings pond that will be built in the Mondaca River valley, as shown in Plan N°2.
The product derived from this flotation process is a concentrate with 28% copper, which is then sent as a pulp through the pipeline to the filter plant that will be located in Chile. The average copper concentrate production is estimated at 1,940 tonnes per day or the equivalent of 543 tonnes per day of fine copper.
3.6 Infrastructure and Processes within the Area of Operations — Argentine Territory
Plan N°2 is attached and shows the infrastructure location within the Argentine Territory.
For the purpose of this paper "Area of Operations" is that area identified by the Nineteenth Additional Protocol to the ACE 161 subscribed to by the Argentine and Chilean governments on January 29, 1997. Plan N°3 with the El Pachon Area of Operations is attached.
3.6.1 Mine
The type of exploitation is an open pit which will reach an elevation depth of 3,225 metres above sea level, which means an average depth of 400 metres in regards to the actual level of the terrain (3,700 m.a.s.l.). The final dimensions of the pit will be approximately 2.0 kilometres wide by 2.4 kilometres in length.
This mine will extract a total of 4,918,943 tonnes of fine copper and 92,561 tonnes of fine molybdenum over the projected 25 years.
The mine contemplates bench heights of 15 metres with 40° and 45° slopes along the walls of the pit. Blasting will allow the extraction of large size boulders that will be loaded using three — 41 m3 mechanical shovels into eighteen to forty-two — 218 tonne trucks and two — 25 m3 diesel loaders, and then sent along to the next phase of size reduction. The ramps and operations areas will be maintained with 6 caterpillar diesel bulldozers, 3 wheel type dozers and 2 graders.
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The ore will be extracted at a rate of 100,000 tonnes per day, while waste material will be moved at an average rate of 89,000 tonnes per day.
3.6.2 Milling
The mill will be located immediately to the east of the open pit about 1 kilometre downstream at 3,565 m.a.s.l.
Crushing stage
The ore in the form of boulders and fines coming from the mine will be unloaded into the primary gyratory crusher. This primary crusher is 60"×110" with a nominal capacity of 8,000 tonnes per hour. The ore, once crushed to a size under 20 cm is then transported via conveyor belt to the temporary crushed ore stockpile, that has a live capacity of 45,000 tonnes. Two tunnels...
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