Strategy and growth
Anglo Base Metals’ strategy is to find or acquire, develop and operate long life, low cost mines in a socially and environmentally responsible manner, with a strong focus on efficient resource allocation, continuous improvement and capital and operating excellence.
The business is constantly developing and evaluating growth options from a combination of sources, including greenfield and brownfield projects, acquisitions, exploration and technology development.
In addition to the growth potential arising from approved expansions at Los Bronces, Collahuasi and Barro Alto, and studies into further growth potential in particular at Collahuasi and Quellaveco (these projects are discussed further in the Projects section, Anglo American, through its Base Metals division, has invested in a number of major new copper projects.
In April 2007, Anglo American tendered $403 million and won the Michiquillay privatisation auction in Peru. The consideration for this world class resource, with a production potential of up to 300,000 tpa, will be payable over five years. However, there is a right to exit the project, at any time after the first year, by paying 30% of the difference between monies expended and the $403 million. During the first year there is a minimum work commitment of $1 million with no exit payment. The Peru based team has been mobilised and the primary focus of efforts in the first 12 months will be the development of a productive relationship with the local communities.
In July 2007, Anglo American became a 50% partner with the Northern Dynasty Partnership (a wholly owned affiliate of Northern Dynasty Minerals Limited) in the Pebble Limited Partnership for a staged cash investment of $1.425 billion. The partnership owns the Pebble Project, the key assets of which are the open pit style Pebble West copper-gold-molybdenum deposit and the adjacent, deeper and higher grade Pebble East deposit. The objective is to complete a pre-feasibility study in 2008, a feasibility study around 2011 and to have a world class mine in operation by 2015. A key priority is to build supportive relationships with local communities, consistent with Anglo American’s policy of developing and operating projects to the highest social and environmental standards and to promote development that is truly sustainable.
In addition to reserve life extensions, significant new ore deposits have been discovered at Paloma Sulfatos and San Enrique Monolito (both near Los Bronces), while, at Collahuasi, Rosario Oeste has been further extended.
In 2007, Anglo Base Metals spent $77 million on exploration and has increased its exploration around its Chilean copper mines, adding significant resources at Los Bronces and making two major discoveries in the immediate vicinity of Los Bronces. Collahuasi continues to drill out its very exciting Rosario Oeste discovery. In Brazil, drilling is ongoing at the Jacaré nickel discovery. Work continues in the Philippines to complete a pre-feasibility study at Boyongan. At Gamsberg East in South Africa, orebody expansions are being drilled. Copper exploration is being undertaken in Brazil, Chile and Indonesia, Mexico, Peru and the US. Nickel sulphide mineralisation is being sought in Arctic Canada, Russia and Scandinavia (through alliances) and zinc programmes continue in Australia, South Africa and Namibia.
Right: Washing down copper cathodes in the solvent-extraction/electro-winning plant at Mantos Blancos in Chile