By Mohsin Abbas /The Santiago Times Staff
SANTIAGO — Anglo American has warned of walking away from its El Soldado copper mine in Chile, if it cannot agree with local regulators on a permit for a redesign of its operations.
The company’s initial application for the redesign was rejected due to the potential for a collapse where the project crossed former underground operations, according to a regulatory document seen by Reuters on Tuesday.
The company said last week it had temporarily suspended operations at the mine, which produced around 36,000 tonnes of copper in 2015, after failing to get the regulatory approval. It did not give reasons for the project’s rejection.
The company is still hopeful it will secure approval in three to four weeks, but if a satisfactory permit cannot be agreed, “we won’t continue going forward with the operation”, Chief Executive Mark Cutifani told a presentation following the group’s earnings announcement in London.
In a report dated Jan. 30 that set out why it was rejecting the permit, Chilean mining regulator Sernageomin said the project interacted with an underground mine that closed in 2010 “which generates high potential risks for uncontrolled collapse.”
The company had not considered the structure or geology sufficiently, it said. But it left a window open for Anglo to redesign the project.
“The mining company can register a new project that gives greater security to people and installations, according to the terrain,” it said in a recent statement.
Anglo has said it believes its plan was safe. “El Soldado is geotechnically complex, but we are confident that our plan for the mine is safe, a view that has been validated by internal and external experts in this field,” the company said.
El Soldado is part of the Anglo American Sur complex, in which Chile’s state-run Codelco [COBRE.UL] and Japan’s Mitsui and Mitsubishi also hold stakes.
The mine has lost money in recent years and management has been following an aggressive savings plan against the backdrop of falling copper prices.
Response from Ministry of Mining
The Ministry of Mining has also responded to the announcement of temporary suspension of Anglo’mining operations at El Soldado, Quillota, in Valparaíso region.
The ministry clairifies that Minera El Soldado operates with an operating method approved in 1989. “The company requested the update of its method of exploitation to Sernageomin – that developed its work of supervising and making observations to the new method of exploitation.
“After carrying out the respective analysis, Sernageomin resolved that this request does not comply with the mining safety regulations established in article 237 of the Mining Safety
Regulations, and therefore rejected the project presented by the company,” the ministry said in a statement on Tuesday.
According to the ministry, Sernageomin adopted this resolution ensuring the safety of workers and mining operations, and complying with what is mandated by law. “This resolution does not order the suspension of operations, because the company still has the original authorization of operating method.
“The aforementioned administrative act can be challenged by means of a recourse and hierarchical subsidy, within a period of five days from formal notification.”
The ministry also states that the company can take up a new project that provides greater security conditions for people and facilities.
— with files from agencies.