The Rajo Inca project comes at a cost which is 33% lower than the original 2014 estimate. Credit: Codelco.

Chile’s copper miner Codelco has received approval from its board to spend $1.383bn for the overhaul of its Salvador mine, a combined open pit and underground copper mine.

As per the plan, the state-owned miner will initiate the construction of the Rajo Inca project to convert Salvador to an open-cast mine from an underground one.

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The move is expected to extend the productive life of the aging operation and boost its production to 95,000 tonnes per annum (tpa) as of the H1-2023.

Codelco noted that the cost of the Rajo Inca project will be 33% lower than the original 2014 estimate.

Rajo Inca project construction will start this year. According to the company, the project includes an initial 22-month job involving stripping of rock covering the deposit.

In a press statement, Codelco stated: “When it enters operations, Rajo Inca will require between 25 and 30 300-ton capacity trucks, hydraulic shovels and large tonnage front loaders, most of the equipment coming from other Codelco divisions.

“Following the favourable Environmental Qualification Resolution obtained in February 2020 and the approval of the funds by the board of directors, the Structural project will mean a rebirth for Salvador, as it will become an operation with more modern, technologised, sustainable and productive operating methods, which will add 47 more years of life to the last mining city-camp in Chile.”

Codelco expects the start of operations from the overhauled mine in the second half of next year.

Last year, Salvador produced about 60,000t of copper.

In January last year, Codelco raised $2bn bonds to secure financing for its multibillion-dollar upgrade projects, as well as to refinance debt and maintain a significant cash position.