Mining innovation

• Author: Fidel Báez Nuñez
• Position: Head of Technology and Innovation, Codelco, Chile

Global mining faces tough challenges

But Chile’s mining industry and the global industry as whole are facing a number of tough challenges. Ore deposits are increasingly low grade, complex, and deeper in the ground, making mining operations more technically challenging and costly.

Production costs are soaring. According to a study by the Chilean Copper Commission (Cochilco), since 2005 the cost of producing copper has gone up every year by 10 percent on average. In 2005 the cost of producing a pound of copper was 90 cents but in 2014 these costs rose to 217 cents per pound.

The industry is also facing wage inflation, water shortages, increasingly stringent environmental regulation and rising energy costs associated with the need to haul rocks containing the ore longer distances and to treat and refine more complex, lower-grade deposits.

Codelco: the world’s largest mining operation

The state-owned mining company, Codelco, is the world’s largest mining operation. We are Chile’s main copper producer and its second largest producer of molybdenum, a metallic element used in steel alloys.

Codelco is in the business of exploring, developing, exploiting, processing and commercializing copper and its byproducts. We produce around 10 percent of the world’s annual copper output and own nine percent of global copper reserves.

In 2014, Codelco produced over 1.84 million metric tons of fine copper. We currently employ over 18,000 workers and have operations in underground mining, open-pit mining, mineral processing, smelting, refinery and bio-hydrometallurgy. In our 44-year history, we have contributed over USD115 billion to the Chilean economy.

However, amid rising production costs, a gloomy global copper market and degrading mineral resources, Codelco, like others in the sector, is struggling to remain competitive.

Reducing operating costs, expanding productivity and improving the safety and occupational health of employees are top priorities.

Innovation is crucial

In our drive to achieve greater sustainability and the highest levels of mining performance, Codelco is investing heavily to expand the production capacity of our aging mines and to find new high-grade deposits. Innovation has a key role to play in achieving these goals. In past decades, technological innovation has enabled us to increase productivity and reduce the risk of injury, and today innovation holds the key to future performance.

Codelco’s technological innovation and research...