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Carrapateena begins copper-gold concentrate production in South Australia

Mining & Resources

Production of the first saleable copper-gold concentrate at Australia’s newest large-scale underground mine has begun.

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Oz Minerals’ Carrapateena project in Outback South Australia has stockpiled more than 280,000 tonnes of development ore on the surface as it ramps up to a planned 4.25Mtpa throughput rate by the end of 2020.

Sufficient saleable concentrate is expected to be produced to the filter feed tank over the coming days to then complete the first concentrate press on schedule.

The pre-production capital cost at first saleable concentrate is approximately $970 million with 2019 growth capital spend on track for guidance of $540 million to $570 million.

Located approximately 160km north of Port Augusta in the north of South Australia, Carrapateena’s mining lease was approved in April 2018 with an estimated life of 20 years. Life of mine average annual production is expected to be 65,000 tonnes of copper and 67,000 ounces of gold.

The production of saleable concentrate was initially scheduled for November but was delayed by a month because of the supply of an incorrect part associated with the minerals processing plant. However, the December 20 announcement still falls within the company’s concentrate production start timeframe of Q4 2019.

OZ Minerals Chief Executive Officer Andrew Cole said the concentrate achievement followed three years of construction that began with initial decline works kicking off in the second half of 2016.

The underground decline into the Carrapateena mine.

“Today’s milestone represents the collaboration, support and hard work of a great many people including our operations and construction teams and the large number of contractors involved,” he said.

“We have been privileged to have the support and direct contribution from the traditional owners, the Kokatha people, and our pastoralist neighbours, as well as from a great many individuals and businesses in the Upper Spencer Gulf and elsewhere in South Australia.

“The South Australian Government has supported the project throughout whilst ensuring we meet or exceed their rigorous environmental and other permitting requirements.

“The project has generated over 1000 direct jobs from construction through to production as well as many thousands of indirect benefits to South Australia. We acknowledge and thank all involved for their contribution to the development of this new South Australian mine.”

Production for 2020, as the ramp up progresses, is expected to be in the range of 20,000 to 25,000 tonnes of copper and 35,000 to 40,000 ounces of gold at an expected full year C1 cost of US$1.80 to $2.00 per pound. Unit costs will be higher in the first half and move lower in the latter half in line with mine production ramp-up due to the fixed cost nature of the mine.

The Adelaide-based miner announced in March it had completed a scoping study into a potential expansion of the mine.

The Carrapateena Block Cave Expansion would more than double the throughput of the mine, which is currently under construction, and require pre-production capital of between $1 billion and $1.3 billion. It would increase copper production from 2026.

“Our key operational focus remains on underground development as we ramp-up the mine,” Cole said today.

“The streamlined mine design with an expanded footprint will improve cave establishment, reduce risk during the ramp-up phase and may enable future annual throughput expansion opportunities as we continue to assess options to expand capacity above 4.25Mt annually.

“Although we announce first saleable concentrate today, we have already commenced a block cave expansion scoping study looking at increasing both the life and production capacity of Carrapateena from 2025. Exploration also continues around Carrapateena to improve our understanding of the broader province potential.”

The Carrapateena mine is second in size to the state’s largest copper mine, BHP’s Olympic Dam, the world’s fourth largest copper resource. Oz Minerals also operates the Prominent Hill copper/gold mine in South Australia’s north.

South Australia is a globally important producer of copper, uranium and zircon.

The state also produces iron ore, zinc, lead, silver, industrial minerals and extractive materials.

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