Environment Ministry Approves Compania Minera del Pacifico S.A (CMP) US$169 Million Los Colorados Expansion
The initiative is part of a larger US$342mn project aimed at increasing pellet feed output at the Huasco plant by 2Mt/y to a total 2.85Mt/y, which was granted environmental approval in mid-September.
Pre-concentrated iron ore output from Los Colorados will feed the Huasco plant, which will see its overall pellet production grow from 5.2Mt/y to 7.2Mt/y. Operations are expected to start in 1Q13 with a 16-year lifespan.
The board of local iron ore and steel group CAP SA (SCL:CAP), which has a 75% stake in CMP, approved the project at end-August. The expansion is part of a long-term growth strategy to boost iron ore output capacity to 17Mt/y from the current 11Mt/y, costing close to US$980mn.
The plan also involves the US$575mn Cerro Negro Norte iron ore project, which received environmental approval last December. The initiative is scheduled to start operating by 1Q13, reaching full production capacity of 4Mt/y of iron ore in concentrates the following year with a lifespan of 19 years.
The remainder of CMP belongs to Japanese corporation Mitsubishi (TYO:8058).
About CAP S.A.
CAP SA (SCL:CAP) is a Chile-based holding company that, through its subsidiaries and affiliates, is principally engaged in the mining sector and the steel industry. Its business is structured in three areas: CAP Mining, comprising the operations of Compania Minera del Pacifico SA (CMP), an entity active production of iron ore and pellets; CAP Steel, including the activities of Compania Siderurgica Huachipato SA (CSH), a manufacturer of steel products made with natural raw materials, and CAP Steel Solutions, operating through Novacero SA, which specializes in the production of steel pipes, tubes and plates used in the construction, industrial and infrastructure sectors. The Company also owns such subsidiaries as PORT Investments Limited NV and Tecnocap SA, as well as it holds interests in Cintac SA, Abastecimientos CAP SA, Armacero Industrial y Comercial SA and Intasa SA. In addition, the Company is a 31.32%-owned affiliate of Invercap SA.