Chile Copper Mining Co Codelco Increases El Teniente Mine Life

EL TENIENTE MINE, Chile, Sep 08, 2010 (Dow Jones Commodities News via Comtex) -- The century-old El Teniente copper mine, owned by state copper giant Corporacion Nacional del Cobre de Chile, opened a new production area Wednesday that will prolong the mine's life another 50 years.

El Teniente is the second-largest division at the state mining company, producing around 400,000 metric tons of copper a year and about 5,000 tons of molybdenum.

Codelco, as the miner is known, on Wednesday inaugurated the copper-rich Pilar Norte sector of El Teniente, the world's largest underground mine, with more than 2,400 kilometers of tunnels.

The $121 million Pilar Norte project will reach its full processing capacity of 17,000 tons of ore-containing mineral per day by 2012.

It will contribute with around 55,000 tons of copper a year to the mine's total production, maintaining current output levels.

At the inauguration ceremony, President Sebastian Pinera urged Congress to approve a bill that would revamp the copper royalty structure miners currently pay.

"This mine has been in production for 105 years and has contributed significantly to Chile's development. Now we have to look ahead," he said, calling on legislators to approve the royalty reform bill.

If approved, the government expects to fetch an additional $1 billion in copper mining royalties over the next three years.

"[The bill] aims at making the mining sector a larger contributor for the country, not only for the reconstruction process after the February earthquake, but also for the country's development," Pinera added.

Chile is not only the world's largest copper producer, accounting for about a third of the globe's red metal output; it's also one of the leading miners of iodine, lithium, nitrates and molybdenum.

The mining industry represents about 20% of the country's gross domestic product.