Copper Miner Codelco to Sign $1 Billion Investment Deal with UK
The world’s largest copper producer Codelco is set to sign a $1-billion deal with Britain to support UK investment with the Chilean company.
The deal, which is expected to be signed Wednesday, will open the door for suppliers in the United Kingdom to work with the Chilean state-owned miner on infrastructure, equipment sales and financial investments, according to Reuters.
"It's probably one of the first investments of its kind into mining from UK Export Finance," Darryn Quayle, mining business specialist from the British government's UK Trade & Investment department, told Reuters.
"Typically they've been orientated towards oil and gas, aerospace and defense. It shows the UK government's support for the mining sector."
Under the billion dollar deal, UK companies will be able to utilize the government financial backing to sell infrastructure like rail lines, power plants and mining equipment.
"Mining is not just a hole in the ground, it's all the related infrastructure as well," Quayle said.
The mega deal is also part of the High Value Opportunities Program, a new British government initiative aimed at boosting UK exports.
Maintaining its status
To combat its struggle with declining copper prices and aging mines, Codelco plans to sell about $8 billion of bonds over the next five years to help finance a nearly $30 billion investment program to maintain its status as the world’s largest copper producer.
“Codelco is in a make or break situation with its investments,” said Chairman Oscar Landerretche. "We're going the full monty on the projects. If we don't, Codelco disappears by 2030.”
Under the growth program, Codelco aims to boost production to 2.5 million tons per year in 10 years time. Currently, the company produces 1.7-1.8 million tons a year.
Codelco also announced plans to turn the world’s largest underground copper mine, El Teniente, into an open pit operation.
Vale invests $150mn to extend life of Manitoba operations
Vale has announced a $150mn CAD investment to extend current mining activities in Thompson, Manitoba by 10 years while aggressive exploration drilling of known orebodies holds the promise of mining well past 2040.
Global energy transition is boosting the market for nickel
The Thompson Mine Expansion is a two-phase project. The announcement represents Phase 1 and includes critical infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution. The changes are forecast to improve current production by 30%.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” said Mark Travers, Executive Vice-President for Base Metals with Vale. “It is significant news for our employees, for the Thompson community and for the Province of Manitoba.
“The global movement to electric vehicles, renewable energies and carbon reduction has shone a welcome spotlight on nickel – positioning the metal we mine as a key contributor to a greener future and boosting world demand. We are proud that Thompson can be part of that future and part of the low carbon solution.”
Vale continues drilling program at Manitoba
Coupled with today’s announcement, Vale is continuing an extensive drilling program to further define known orebodies and search for new mineralization.
“This $150mn investment is just one part of our ambitious Thompson turnaround story. It is an indicator of our confidence in a long future for the Thompson operations,” added Dino Otranto, Chief Operating Officer for Vale’s North Atlantic Base Metals operations.
“Active collaboration between our design team, technical services, USW Local 6166, and our entire Thompson workforce has delivered a safe, efficient and fit-for-purpose plan that will enable us to extract the Thompson nickel resources for many years to come.”
The Thompson orebody was first discovered in 1956 by Vale (then known as Inco) following the adoption of new exploration technology and the largest exploration program to-date in the company’s history. Mining of the Thompson orebody began in 1961.
“We see the lighting of a path forward to a sustainable and prosperous future for Vale Base Metals in Manitoba,” said Gary Annett, General Manager of Vale’s Manitoba Operations.