BHP to spend 2.5 billion extending life of Chilean copper mine

BHP (ASX:BHP) has announced it will spend US$2.46 billion on extending the life of the Spence copper mine in Northern Chile, as it looks to take advantage of higher trading prices for metal.

The open-cut deposit’s mine life will be lengthened by more than 50 years after capital expenditure for the Spence Growth Option (SGO) project was approved.

In the first 10 years of operation, incremental production from the Spence mine will reach around 185,000 tonnes a year of copper concentrate, with first production expected in 2021.

BHP’s CEO Andrew Mackenzie said: “Execution of the SGO will create long-term value for shareholders in one of our preferred commodities.

“The project significantly extends the life of our Spence operation and unlocks the potential of the large, quality resource.”

The SGO project will create up to 5,000 jobs during the construction stage, and will require a new desalination plant and 154km water pipeline stretching from Chile’s coast to the Atacama Desert.