ECONOMY

‘Chuqui’ Goes Underground for Second Act

SANTIAGO – “If you’re lucky, you get a second act in life …. But sooner or later, death will come. Unannounced, Old Man Reaper comes to reclaim your soul.”* And so it goes with the 103-year-old Chuquicamata copper mine. It begins its second act next year as an underground “block cave” mine. The hope is that it will survive another 50 years as a profitable resource.

The Chuquicamata mine, nicknamed “Chuqui,” in Chile’s Antofagasta region, is said to be the world’s largest open pit copper mine as measured in excavated volume and the second deepest open-pit mine.

After more than a century of digging, however, the mine’s surface operations – to the extent a giant hole more than 3 km wide, 5 km long, and 1.1 km deep can even be called “surface” – are finally coming to an end.

Simply put, for years now, the mine has been “too big, too deep, and too old to continue digging in the open-pit method”; and, as Cecilia Jamasmie reported in an article posted to mining.com, the mine enjoyed its “last blast at the bottom” in September.

If you were too busy getting ready for Dieciocho and missed this historic detonation, don’t worry: you don’t have to travel back in time to experience it. Instead, just watch the video below and you will find a thunderous topside replay posted by Minería Chilena.

Going forward, going underground

Going forward, the mine will be switching to underground block cave mining. This method involves undercutting a large block of rock, blasting it from below, and then letting gravity work its magic to collapse the fractured rock into a series of awaiting funnels and tunnels. It is generally more expensive than open-pit mining, but it is an attractive second choice, and, currently, the only feasible choice for a mine like the Chuquicamata, where surface extraction is now cost-prohibitive.

This is slated to be a $4.9 billion USD switch by the state-owned copper mining company that operates the mine, Corporación Nacional del Cobre, Codelco.

This switch is part of Codelco’s grander ambitions, a 10-year, $39 billion USD revamp of its mines, that follows the government’s decision to contribute $1 billion USD.

Copper and Chile´s economy

The ambitions and investment are easy to understand: Chile has been the top copper producer for over 30 years, refined copper and copper ore make up nearly half of Chile’s exports, and the world is evermore hungry for copper.

As aptly put by Richard A. Kerr in Science, “[i]f electrons are the lifeblood of a modern economy, copper makes up its blood vessels. In cables, wires, and contacts, copper is at the core of the electrical distribution system, from power stations to delicate electronics.”

There is an unfortunate corollary though. As noted in the Nikkei Asian Review, nearly 23% of Chilean exports “head to China,” and, as a consequence, “when China sneezes, Chile catches a cold,” and copper is a key vulnerability in this regard. China is the largest consumer of copper, gobbling up a whopping 50%.

President Piñera: “Commercial war between US and China affects Chile”

It is therefore no surprise that, as reported by Benedict Mander in an article posted to Ozy on September 2, 2018, “[c]oncerns are growing in Chile that it could be the first country in resource-rich South America to feel the impact of the slowdown in China and the U.S.’s escalating trade war with Beijing, with a fall in copper prices already putting pressure on the economic agenda of President Sebastián Piñera.”

Jorge Bande, a mining expert quoted in Mander’s article, noted that “[t]he government was counting on a higher copper price during its mandate,” and that lower revenues from mining could derail Piñera’s economic plans, “given that the situation was ‘already quite stretched’ before the recent fall in copper prices.”

As further reported in the article, Chile was “already feeling the pinch from lower copper prices,” then around $2.80 USD per pound, when officials were underlining the need for copper to stay above $3 per pound to make the government’s economic plans viable.

Since then, copper has zig-zagged between $2.65 USD and $2.9 USD per pound.

In other words, at exactly the same time that Chile is committing substantial sums to saving Chuquicamata and other mines from becoming unprofitable, these circumstances make it that much harder.

A future, but more fundamental, concern for Chile’s economy is, What happens when we crest, and start sliding down the backside of, the coming “copper peak”? Recent forecasts put us there as early as 2040.

In fact, because of the exponentially growing demand for copper, even if we assume the forecast model is stingy, and adjust it by doubling the extractable copper in the equation, we only push the peak out to 2050.

As a result, it appears that all the second acts in the world will not stop Old Man Reaper coming for copper.

More copper, less time and damage – innovations in Chile´s mining sector

Take a tour

The Chuquicamata mine is less than 120 km from one of Chile’s most popular tourist destinations to the south, San Pedro de Atacama, and about the same distance from the stunning Reserva Nacional Alto Loa to the north.  Codelco’s guided, free tour of the mine is therefore a worthy side trip on the way to or from these destinations. Tours are available through advance booking by email to visitas@codelco.cl.

Read up

If printed, the available media about the Chuiquicamata mine actually might fill it; and, yet, it’s probably safe to say that there is still no final assessment, and never will be, of all the many themes across which the mine cuts.

But one of the most interesting and unexpected assessments might be Tracing the Veins: Of Copper, Culture, and Community from Butte to Chuquicamata,  by Janet L. Finn, first published by the University of California Press in 1998.

Finn’s book springs from a dissertation she submitted towards a PhD in Social Work and Anthropology at the University of Michigan; and it tells the story of the Anaconda Company that left its “impress on community life from the Rockies,” in the United States, “to the Andes,” in Chile, “and of the creative agency of men and women who built community and carved their own histories and futures in two isolated corners of the world”: Butte, Montana, where Finn grew up, and Chuquicamata, its “unofficial sister city.”

The book’s introduction is a compelling invitation:

“This is a tale of two cities: Butte, Montana, USA, and Chuquicamata, Chile, intimate strangers, linked through their histories as the copper production hubs of the Anaconda Company. From the 1920s to the 1970s, their rich copper deposits served as the corporate anchors for Anaconda, a giant of the mining industry. On their scarred surfaces, these towns appear as mirror images, reflecting the hope and pain of their copper-plated pasts. Their differences, though, are as deep as the veins of copper that coursed beneath them. Like the veins themselves, Butte and Chuquicamata are connected in a labyrinthine history of political and economic intrigues that defy above-ground detection.”

____________

* Kenny Powers in Eastbound & Down, Season 4, episode 8, “Chapter 29,” Hill, Jody, dir., HBO.

You might be interested in:

Fisheries, farms and forestry: climate change endangers Chile’s economy

Related posts

Five Pillars for a Pension Reform in Chile

Felipe Vergara

Protests as prices of the TAG in Santiago are set to increase next year

Boris van der Spek

Atacama Indigenous Groups Fight Top Lithium Producer SQM

Fernanda Gandara

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy