Cia Minera Los Pelambres: a project history
Authors: O’Leary J. 
Published: April 2008

Abstract
The first documented discovery of copper mineralization at Los Pelambres was by William Braden, the American geologist, who noted and explored the area in 1920. He drove a series of short adits into the canyon wall, but these did not penetrate beyond the leached cap of the deposit.
After the work of Braden, there was no further activity until 1955 when two Chilean companies, Minera Protectora and Minera Los Pelambres, staked claims in the area. The Protectora and Los Pelambres claims were surveyed in 1960 and 1970 respectively.
The United Nations first became involved in 1964 with a surface examination of the property. This was followed by a further examination by the Chilean Institute of Geological Investigation financed by Corfo (a Chilean government organization) in 1967 and 1968.
Beginning in 1969, a partnership arrangement between the United Nations and Enami (the Chilean government organization dedicated to small-scale mining) undertook serious exploration of the property including diamond drilling programmes. This work developed a combined probable and possible ore reserve of 428 Mt of material with a grade of 0.78% copper and 0.033% molybdenum. The drilling was confined largely to the valley bottom. This work was finished in 1971. In 1978 an international licitation for bids on the claims prompted examination by Anaconda geologists. Anaconda (then a subsidiary of Atlantic Richfield) was successful in the bidding and in 1983 they produced a study which examined the alternative means of exploiting the deposit. The conclusion of this study was that it was technically feasible to mine the deposit as an open pit operation at a scale of 60 000 tpd using conventional froth flotation techniques to recover the copper minerals. The study took three and a half years to complete at a cost of $59 M. The study, however, concluded that although the project could produce a satisfactory rate of return, the project economics were marginal in the light of the copper prices projected at that time. In this study the ‘geological reserves’ were stated to be in excess of 3 Gt at a grade of 0.62% copper. Shortly thereafter Atlantic Richfield made a strategic decision to divest itself of all its mining assets and in 1986 Anaconda Chile was acquired by the Luksic Group.
Montagu Mining Finance (MMF) were appointed, to advise the Luksic group, in late 1987. It was MMF’s view that the opportunity might exist to finance the project using a debt for equity swap under Chile’s Chapter XIX rules. At that date the largest debt swap, in the mining industry, that had been completed in Chile was for $35 M and it was MMF’s view that the Chilean central bank would not countenance a swap much larger than this. MMF decided therefore to examine developing the project with a capital budget limited to what might be achievable through a debt swap, and in early 1988 consultants were appointed to examine the feasibility of mining the deposit on a small scale.
As part of their brief, the consultants examined the distribution of copper throughout the deposit and concluded that there exist two high grade zones, the East Zone and the West Zone, which together contain 40 Mt at an average grade of 1.52% copper. It is these higher grade zones that have been the target for initial mining and at present the mine is being operated as a 5000 tpd underground operation. Initial operation and addition drilling on the East Zone has confirmed the feasibility study estimates. However, a further high grade zone, The Central Zone, has now been confirmed by drilling and trial mining and a study has indicated the potential for an increase in production to 15 000 tpd by mining the West and Central Zones by open pit methods.