Investment in the Chilean mining industry Portfolio of ... › Research › 2019 12 16 Cartera... · of four of the 44 projects in the previous portfolio; and an increase of US$6,171

Investment in the Chilean mining

industry

Portfolio of projects, 2019-2028

DEPP 11/2019

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 I

Comisión Chilena del Cobre

Executive Summary

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 II


Executive Summary

This investment portfolio comprises 44 mining projects, due to start operation in 2019-2028 and

amounting to a total of US$72,503 million.

This figure is the result of adjustments to the 2018 portfolio to reflect the exclusion of SQM’s

Orcoma project as it awaits improvements in the market and its engineering; the start-up in 2018

of four of the 44 projects in the previous portfolio; and an increase of US$6,171 million in the

amount of investment. The latter reflects increases in the cost of some of Codelco’s structural

projects which, together with the “other Codelco investments” group of projects, implies a net

increase of US$2,513 million for the next five years as compared to the previous portfolio. This is

mainly because the paste tailings project for the Underground Chuquicamata mine and other

investments required over the next five years for its operation have been brought forward. Finally,

the current portfolio also includes five new projects valued at US$7,209 million.

2018 portfolio vs. 2019 portfolio

Source: Compiled by COCHILCO.

2018 portfolio Restructured Start operation Investment adjust. New projects 2019 PORTFOLIO

As regards the distribution of projects according to their probability of materialization within the

envisaged timeframe, the group of those with a higher probability of materialization or, in other

words, base and probable initiatives includes 26 projects valued at US$41,885 million and

representing 58% of the total portfolio.

MMUS$65.747

44 projects

- MMUS$2301 project

- MMUS$6.3944 projects

+ MMUS$6.171

+ MMUS$7.2095 projects

MMUS$72.503

44 projects

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

Cartera 2018 Reestructurados Entran enoperación

Ajustesinversionales

Proyectosnuevos

CARTERA 2019

US$

mill

.

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 III


The group with a lower probability of materialization - that is, possible and potential projects - which

are more prone to be affected by changes in market conditions, includes 18 initiatives valued at

US$30,618 million and representing 42% of the total portfolio.

Five new initiatives were incorporated into the portfolio this year: the Los Bronces Integrado project

of Anglo American Sur for US$3,000 million; the 210 ktpd Production Capacity Improvement project

of Doña Inés de Collahuasi for US$3,200 million; the El Peñón Operational Continuity gold project of

Yamana Gold for US$132 million; the Nueva Victoria – New Iodine Plant industrial minerals project

of SQM for US$350 million; and the Blanco lithium project of Minera Salar Blanco for US$527 million.

Copper mining continues to predominate in the 2019 portfolio, accounting for 91% of the total

investment, with 31 initiatives valued at US$65,621 million. This represents an increase of 11% on

the 2018 portfolio (32 initiatives for a total of US$59,103 million).

In the case of the distribution of projects across Chile’s different regions, the Antofagasta Region

continues to be the main pole of investment, accounting for 27% of the portfolio, followed closely

by the Atacama Region with 22%. The Tarapacá Region is in third place, with four initiatives that

represent 12% of the portfolio and the O’Higgins Region takes fourth place, with 8%. The Coquimbo

and Valparaíso Regions each account for 7% and the Metropolitan Region for 4%. It is important to

note that some US$10,147 million corresponds to investments by Codelco in different regions.

Together, they account for 14% of the total portfolio and include principally enhancements of tailing

dams, compliance smelter regulations and improvements smelting and refining (FURE) installations,

explorations and engineering studies as well as work required at several Codelco operations for the

operational continuity of its divisions.

Most of the projects included in the portfolio will start operations in 2019-2023, indicating that

mining investment will show its results in terms of production, job creation and supply chains in the

medium term.

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 IV


Capital intensity per copper project and fine Cu contributed


In the 2019 portfolio, there is an important increase in the cost of initiatives as compared to the

2018 portfolio. This increase in cost for a similar level of production implies a marked increase in

capital intensity per ton of fine copper to be produced, which rises from an average of US$15,800

per ton to US$18,200, equivalent to an increase of 15%.

816,51.036,3

1.293,6

1.791,21.657,52.012,8

2.680,32.890,6

2.504,12.293,6

1.662,11.784,81.995,5

2.285,6

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Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 V


Contents

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 VI


Contents

Executive Summary .............................................................................................................................

Contents ..............................................................................................................................................

List of figures .......................................................................................................................................

List of tables ........................................................................................................................................

Introduction ...................................................................................................................................... 2

1. Investment in the Chilean mining industry, 2019-2028 ...............................................................

1.1. Condicionality of investment ............................................................................................. 5

1.1.1. Determinants of investment conditionality.............................................................

1.1.2. Indirect determinants of investment conditionality ................................................

1.2. Investment by region ...........................................................................................................

1.3. Origin of investment ........................................................................................................ 11

2. Estimate of annual distribution of investment in portfolio projects ...........

2.1. Distribution of investment in copper mining ................................................................... 16

2.2. Distribution of investment in gold, iron and industrial minerals ...................................... 18

3. Portfolio’s maximum contribution to output, 2019................................................................. 20

3.1. Contribution to copper outout.............................................................................................

3.2. Contribution to output of molybdenum, gold, silver and iron. ........................................ 21

3.3. Contribution to output of lithium and other industrial minerals. .................................... 22

4. Comparison of mining investment portfolios to 2019 .................................................................

4.1. Comparison of 2018 and 2019 portfolios ......................................................................... 25

4.2. Historical comparison of portfolios ......................................................................................

5. Conclusions.............................................................................................................................. 34

Origin of investment ............................................................................................................

Purpose of investment ..................................................................................................... 34

Region of Chile ................................................................................................................. 35

Maximum contribution to output ........................................................................................

Condicionality of investment ........................................................................................... 36

APPENDIX 1: Metholdology ............................................................................................................. 38

1. Coverage .................................................................................................................................. 38

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 VII


2. Attributes of projects and condition of materialization .......................................................... 38

2.1. Condition of materialization ............................................................................................ 38

2.2. Type of project .....................................................................................................................

2.3. Stage of advance ..................................................................................................................

2.4. Environmental permits (SEA) ........................................................................................... 40

2.5. Start-up date .................................................................................................................... 40

3. Investment by Codelco and sources of information ....................................................................

4. Private-sector investment and sources of information ...............................................................

5. Methodological criteria for estimating start-up date .............................................................. 43

APPENDIX 2: Description of investment projects in copper mining ................................................ 44

1. State copper mining ....................................................................................................................

1.1. Codelco structural projects - www.codelco.cl .................................................................. 44

2. Large-scale private copper mining ...............................................................................................

2.1. Anglo American - https://chile.angloamerican.com/ ....................................................... 48

2.2. Antofagasta Minerals - www.antofagasta.co.uk .............................................................. 49

2.3. BHP - www.bhp.com ....................................................................................................... 52

2.4. Capstone Mining - www.capstonemining.com ................................................................ 53

2.5. Doña Inés de Collahuasi - www.collahuasi.cl ................................................................... 54

2.6. Freeport McMoRan - www.fcx.com ................................................................................. 56

2.7. Goldcorp/Teck - www.nuevaunion.cl ............................................................................... 57

2.8. KGHM - www.sgscm.cl ..................................................................................................... 58

2.9. Mantos Copper ................................................................................................................ 59

2.10. Teck - www.teck.com ..................................................................................................... 60

3. Medium-scale copper mining ......................................................................................................

3.1. Central Asia Metals plc - www.centralasiametals.com .................................................... 61

3.2. COPEC - www.empresascopec.cl ..................................................................................... 62

3.3. Hot Chili - www.hotchili.net.au ........................................................................................ 63

3.4. Pucobre - www.pucobre.cl............................................................................................... 64

4. Metallurgical plants .....................................................................................................................

4.1. Ecometales - www.ecometales.cl .................................................................................... 65

4.2. ENAMI www.enami.cl .................................................................................................... 66-

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028

VIII


APPENDIX 3: Description of investment projects in gold and silver mining .................................... 67

1. Rio2 Limited - www.rio2.com .................................................................................................. 67

2. Gold Fields - www.goldfields.com ........................................................................................... 68

3. Kingsgate Consolidated Ltd. - www.kingsgate.com.au ............................................................ 69

4. Kinross - www.kinross.com ..................................................................................................... 70

5. Yamana Gold - yamana.com .................................................................................................... 71

APPENDIX 4: Description of investment projects in iron mining ..................................................... 72

1. Admiralty Resources ................................................................................................................ 72

2. Andes Iron - www.conocedominga.cl ...................................................................................... 73

APPENDIX 5: Description of investment projects in industrial minerals .......................................... 74

1. Albemarle ................................................................................................................................ 74

2. SQM S.A. - www.sqm.cl ........................................................................................................... 75

3. Minera Salar Blanco S.A. .......................................................................................................... 78

4. SIMCO SpA ............................................................................................................................... 79

APPENDIX 6: Units of measurement and abbreviations .................................................................. 80


IX


List of figures

Figure 1: Investment in the Chilean mining industry by condition ..................................................... 5

Figure 2: Investment in the Chilean mining industry by probability of materialization ...................... 6

Figure 3: Investment portfolio by region, copper mining and other mining ...................................... 9

Figure 4: Investment portfolio by country of origin (MMUS$ and %) .............................................. 12

Figure 5: Annualized investment, materialized and pending, by type of mining .............................. 15

Figure 6: 2018 portfolio vs. 2019 portfolio ....................................................................................... 26

Figure 7: Investment portfolios surveyed by COCHILCO, 2006-2019 ............................................... 29

Figure 8: Projects starting operation between 2006 and 2018 ........................................................ 30

Figure 9: New projects entering the portfolio between 2007 and 2019 .......................................... 30

Figure 10: Historical copper portfolios and contribution to output ................................................. 31

Figure 11: Capital intensity per copper project and per ton of fine Cu contributed ......................... 32

List of tables

Table 1: Survey of mining projects in Chile, 2019-2028 ..................................................................... 4

Table 2: Investment in the Chilean mining industry by sector and condition of projects................... 6

Table 3: Investment portfolio by determinants of conditionality....................................................... 7

Table 4: Investment portfolio by type of project and end product .................................................... 8

Table 5: Investment in copper mining by region and condition of projects ..................................... 10

Table 6: Investment in gold, iron and industrial minerals by region and condition of projects ....... 11

Table 7: Investment in copper mining by country of origin and condition (MMUS$) .................. 1312

Table 8: Investment in gold, iron, lithium and industrial minerals by country of origin and condition

(MMUS$) .......................................................................................................................................... 13

Table 9: Annualized mining investment in Chile, 2019-2028, by probability of materialization and

sector ............................................................................................................................................... 16

Table 10: Annual distribution of investment in copper mining by condition of projects (MMUS$) . 17

Table 11: Annual distribution of investment in gold, iron and industrial minerals by condition of

projects (MMUS$) ............................................................................................................................ 18

Table 12: Copper projects and maximum output ............................................................................. 20

Table 13: Projects contributing to molybdenum, gold, silver and iron output by 2028 ................... 21

Table 14: Projects contributing to output of lithium and other industrial minerals ......................... 22

Table 15: Principal changes in investment portfolio, 2019 vs. 2018 ................................................ 26

Table 16: Comparison of 2018 and 2019 portfolios by condition of projects ................................... 27

Table 17: Comparison of 2018 and 2019 portfolios by mining sector .............................................. 27

Table 18: Comparison of 2018 and 2019 portfolios by mining sector and condition of projects ..... 28

Table 19: Comparison of 2018 and 2019 portfolios by region.......................................................... 28

Table 20: Conditions of materialization of a project ........................................................................ 39

Investment in the Chilean mining industry – Portfolio of projects, 2019-2028 1


Introduction



Introduction

This study, which corresponds to an update of the annual report on investment in the Chilean mining

industry over the next decade, seeks to provide relevant information about the mining projects that

currently exist in Chile, together with the resulting new forecast for investment over the period,

based on information disclosed by the projects’ owners.

The study is structured as follows:

a) Analysis of the investment required for the portfolio of projects in copper, gold and silver, iron

mining and some industrial minerals, regarding the conditionality of the initiatives and their

purpose, the regional distribution of the investment and its country of origin. A description of

each of the projects can be found in Appendix 2 (copper mining), Appendix 3 (gold and silver

mining),Appendix 4 (iron mining) and Appendix 5 (industrial minerals).

b) An estimate of the investment flow represented by the portfolio, indicating the amounts

already invested, the annualized flow for the next five years and the amount to be invested

subsequently. This forecast is, however, only a reference and does not represent a commitment

by projects’ owners.

c) An estimate of the portfolio’s maximum contribution to output of copper, molybdenum, gold,

iron, lithium and industrial minerals. A more detailed analysis of the outlook for copper

production is part of a different line of work of COCHILCO.

d) A comparison of the changes between the present and previous portfolio regarding the amount

of investment, the number of projects and their conditionality, purpose and regional

distribution. In addition, earlier surveys and their evolution to date are reviewed as regards the

materialization of projects, the new projects that entered in each portfolio and their relation

with the price of copper, the main commodity considered in this cadaster.

Finally, the study sets out the main conclusions that can be drawn from the information presented.

It should be noted that a project inclusion in the portfolio, after fulfilling the necessary conditions,

is not a guarantee of its materialization on the terms and in the timeframe planned by the company.

However, it does indicate the interest of the state-owned and private companies, either large or

medium-size, in our geological resources, mining market and long-term mining policy.


3


Chapter 1:

Investment in the Chilean mining


4


1. Investment in the Chilean mining industry, 2019-2028

This section provides general information about the projects considered in the 2019-2028 portfolio.

It comprises 44 initiatives valued at US$72,504 million as shown in Table 1, which also includes the

amount of the investment, its conditionality, its purpose and the region where it would be located,

among other information.

Table 1: Survey of mining projects in Chile, 2019-2028

Start-up Project Operator Sector of mining

Region Type of project

Condition Stage of advance

Environ. permit

Investment

(MMUS$)

2019-2023 OTHER DEVELOPMENT PROJECTS Codelco Chile State - Cu/ Met. plants

Several Replacement/ New

BASE/ POSSIBLE

Implementation/ Feasibility

N/A 10,147

2019 COLLAHUASI COMP. INST. 170 KTPD Doña Inés de Collahuasi Large min. - Cu Tarapacá Expansion BASE Implementation

EIA approved 302

2020 SALAR DEL CARMEN EXPANSION SQM Salar S.A. Lithium Antofagasta Expansion BASE Implementation

EIA approved 180

2020 MANTOS BLANCOS CONC. DEBOTTLE. Mantos Copper Large min. - Cu Antofagasta Expansion BASE Implementation

EIA approved 181

2020 EL PEÑÓN OP. CONTINUITY Minera Meridian Ltda. Gold Antofagasta Replacement

PROBABLE Feasibility EIA approved 132

2020 CONCENTRATE LEACHING Ecometales Limited Agencia en Chile Met. plants Antofagasta New PROBABLE Feasibility EIA approved 370

2021 SOBERANA (EX-MARIPOSA) Admiralty Minerals Chile PTY LTD Iron Atacama New BASE Implementation

EIA approved 84

2021 LOS PELAMBRES MARG. EXPAN. PHASE I Minera Los Pelambres Large min. - Cu Coquimbo Expansion BASE Implementation

EIA approved 1,300

2021 SPENCE GROWTH OPTION Pampa Norte Large min. - Cu Antofagasta New BASE Implementation

EIA approved 3,260

2021 LA NEGRA PLANT EXPANSION - PHASE 3 Rockwood Litio Limitada Lithium Antofagasta Expansion BASE Implementation

EIA approved 300

2021 NUEVA VICTORIA – NEW IODINE PLANT SQM S.A. Ind. min. Tarapacá Expansion POSSIBLE Feasibility EIA submitted 350 2021 DIEGO DE ALMAGRO Compañía Minera Sierra Norte S.A. Med. min. - Cu Atacama New PROBABLE Feasibility EIA approved 597 2021 SALARES NORTE Minera Gold Fields Salares Norte SpA Gold Atacama New POSSIBLE Feasibility EIA submitted 1,000 2021 MARICUNGA SALTS PRODUCTION SIMCO SpA Lithium Atacama New POSSIBLE Feasibility EIA submitted 350

2021 MINE-PLANT TRANSPORT Codelco Andina Div. State - Cu Valparaíso Replacement

BASE Implementation

EIA approved 1,480

2021 MANTOVERDE DEVELOPMENT Mantos Copper Large min. - Cu Atacama New PROBABLE Feasibility EIA approved 832 2021 RAJO INCA Codelco Salvador Div. State - Cu Atacama Expansion PROBABLE Feasibility EIA submitted 1,226 2022 NUEVA ESPERANZA - ARQUEROS Laguna Resources Chile Gold Atacama New POSSIBLE Feasibility EIA submitted 215

2022 LOS BRONCES INTEGRADO Anglo American Sur S.A. Large min. - Cu Santiago Replacement

PROBABLE Feasibility EIA submitted 3,000

2022 PRODUCTORA Sociedad Minera El Águila Ltda. Med. min. - Cu Atacama New POTENTIAL Prefeasibility Without EIA 725

2022 ZALDÍVAR OP. CONTINUITY Compañía Minera Zaldívar SpA Large min. - Cu Antofagasta Replacement

PROBABLE Feasibility EIA submitted 100

2022 QUEBRADA BLANCA HYPOGENE Cía. Minera Teck Quebrada Blanca Large min. - Cu Tarapacá New BASE Implementation

EIA approved 4,739

2022 BLANCO PROJECT Minera Salar Blanco S.A. Lithium Atacama New POSSIBLE Feasibility EIA submitted 527 2022 LITHIUM CARB. EXPAN. TO 180 KTPY SQM Salar S.A. Lithium Antofagasta Expansion PROBABLE Feasibility EIA approved 450 2022 SIERRA GORDA EXPAN. 230 KTPD Sierra Gorda SCM Large min. - Cu Antofagasta Expansion PROBABLE Feasibility EIA approved 2,000 2023 LOS PELAMBRES MARG. EXPAN. PHASE II Minera Los Pelambres Large min. - Cu Coquimbo Expansion POSSIBLE Feasibility Without EIA 500 2023 FENIX (EX-CERRO MARICUNGA) Minera Atacama Pacific Gold Chile Ltda. Gold Atacama New POSSIBLE Feasibility Without EIA 206 2023 PLAYA VERDE Copper Bay Med. min. - Cu Atacama New PROBABLE Feasibility EIA approved 95 2023 SANTO DOMINGO Santo Domingo SCM Large min. - Cu Atacama New PROBABLE Feasibility EIA approved 1,700

2023 LA COIPA PHASE 7 Kinross Minera Chile Ltda. Gold Atacama Replacement

PROBABLE Feasibility EIA approved 200

2023 NUEVA PAIPOTE Hernán Videla Lira Smelter Met. plants Atacama Expansion POSSIBLE Feasibility Without EIA 646

2023 NEW MINE LEVEL Codelco El Teniente Div. State - Cu O'Higgins Replacement

BASE Implementation

EIA approved 5,684

2024 EL ESPINO Pucobre Med. min. - Cu Coquimbo New POSSIBLE Feasibility EIA approved 624 2024 NUEVAUNIÓN PHASE I NuevaUnión SpA Large min. - Cu Atacama New POTENTIAL Feasibility Without EIA 3,500 2024 CENTINELA DISTRICT DEVELOPMENT Minera Centinela Large min. - Cu Antofagasta New PROBABLE Feasibility EIA approved 4,350 2024 DOMINGA Andes Iron SpA Iron Coquimbo New POTENTIAL Feasibility Without EIA 2,888 2025 COLLAHUASI PROD. CAP. IMP. 210 KTPD Doña Inés de Collahuasi Large min. - Cu Tarapacá Expansion POSSIBLE Feasibility EIA submitted 3,200 2026 RT SULFIDES PHASE II Codelco Radomiro Tomic Div. State - Cu Antofagasta New POSSIBLE Feasibility EIA approved 3,073 2026 EL ABRA CONC. (EX-EL ABRA MILL) Cía. Contractual Minera El Abra Large min. - Cu Antofagasta New POTENTIAL Feasibility Without EIA 5,000 2026 ANDINA EXPANSION Codelco Andina Div. State - Cu Valparaíso Expansion POTENTIAL Feasibility Without EIA 3,290 2027 NUEVAUNIÓN PHASES II & III NuevaUnión SpA Large min. - Cu Atacama New POTENTIAL Feasibility Without EIA 3,700

Source: Compiled by COCHILCO using public information about each project.


5


This information is used for a more detailed analysis of the portfolio as follows: Section 1.1 reviews

the conditionality of projects; Section 1.2 looks at investment by region, analyzed according to the

target mining sector and the projects’ conditionality; and Section 1.3 analyzes the investment by

country of origin.

1.1. Conditionality of investment

Using the concept of conditionality of the investment, developed by COCHILCO on the basis of the

association and interaction between different variables that affect the development of investment

projects1, it is possible to assess with a little more accuracy the likelihood of their implementation

within the timeframe estimated by their owners and their respective engineering teams. Figure 1

shows the distribution of investment by condition while Table 2 shows its distribution by mining

sector and condition.

Figure 1: Investment in the Chilean mining industry by condition


1 For information about the methodology, see Appendix 1, Section 2, “Attributes of projects and condition of materialization”.

BASEMMUS$26,531

37%12 projects

PROBABLEMMUS$15,354

21%14 projects

POSSIBLEMMUS$11,515

16%12 projects

POTENTIAL MMUS$19,103

26%6 projects

Probability of materialization

dad de materialización


6


Table 2: Investment in the Chilean mining industry by sector and condition of projects

SECTOR TOTAL BASE PROBABLE POSSIBLE POTENTIAL

N° projects

Investment (MMUS$)

N° projects

Investment (MMUS$)

N° projects

Investment (MMUS$)

N° projects

Investment (MMUS$)

N° projects

Investment (MMUS$)

Codelco 8 23,067 4 15,879 1 1,226 2 3,897 1 3,290

Large-scale private 16 25,682 4 9,480 7 12,284 2 3,700 3 12,200

Medium-scale private 4 1,349 0 - 2 692 1 624 1 725

Industrial plants 3 1,254 1 608 1 370 1 646 0 -

Subtotal copper 31 65,621 11 25,967 11 14,572 6 8,867 5 16,215

Gold and silver 5 1,421 0 - 3 332 3 1,421 0 -

Iron 2 2,972 1 84 0 - 0 - 1 2,888

Lithium 5 1,357 2 480 1 450 2 877 0 -

Industrial minerals 1 350 0 - 0 - 1 350 0 -

Subtotal other minerals 13 6,882 3 564 3 782 6 2,648 1 2,888


Based on the likelihood that the projects can or cannot be implemented in the timeframe estimated by the mining company, it is possible to classify them as base or probable in a subgroup referred to as “with a higher probability of materialization” or as possible or potential in a subgroup referred to as “with a lower probability of materialization”.

Figure 2: Investment in the Chilean mining industry by probability of materialization

WITH HIGHER PROBABILITYMMUS$41,885;

58%26 projects

WITH LOWER PROBABILITYMMUS$30,618;

42%18 projects


7



The first subgroup of projects “with a higher probability of materialization” includes 25 base or

probable projects, representing an investment of US$36,257 million:

- 12 base projects valued at US$26,531 million in which Codelco continues to be the

predominant player, accounting for 98% of this investment;

- 14 probable projects valued at US$15,354 million of which the large-scale private mining

sector accounts for 80%.

The second subgroup of projects “with a lower probability of materialization” includes 19 projects

for a total of US$29,490 million:

- 12 possible projects valued at US$11,515 million of which Codelco and large-scale private

companies together account for 66%, while copper mining as a whole accounts for 77%;

- 6 potential projects valued at US$19,103 million of which large-scale copper mining

accounts for 81%.

1.1.1. Determinants of investment conditionality

For better understanding of the classification of projects by conditionality, the table below shows the variables affecting a project’s probability of materialization.

Table 3: Investment portfolio by determinants of conditionality

Variable

2019-2028

Investment (MMUS$)

% of total N° projects

Type of project

New 38,659 53% 22

Replacement 19,919 27% 9

Expansion 13,925 19% 13

Stage of advance

Implementation 26,531 37% 12

Feasibility 45,247 62% 31

Prefeasibility 725 1% 1

Environmental permits

RCA approved 41,256 57% 25

EIA/DIA suspended 0 0% 0

EIA/DIA submitted 9,968 14% 9

Without EIA/DIA 21,280 29% 10

Investment and materialization period

2019-2023 42,879 59% 37

After 2023 29,625 41% 7


8



As can be seen, 53% of the initiatives surveyed correspond to new projects and the remaining 47%

to replacement or expansion projects. In addition, 62% of the initiatives are at the feasibility stage

while 37% are already being implemented and 1% are at the prefeasibility stage.

Environmental permits are required for the construction phase and 57% of the portfolio has

obtained authorization. When compared to projects in implementation, it can be seen that there is

a remnant of 13 projects that have not yet begun construction. These projects are the group that

requires most attention and analysis on the part of the authorities.

Finally, 59% of the portfolio will be implemented within the next five years, leaving only seven

initiatives for the following five years.

1.1.2. Indirect determinants of investment conditionality

The other variables that it is useful to consider, although they do not have a direct bearing on

conditionality, are whether a project is brownfield or greenfield and its end product (Table 4).

Table 4: Investment portfolio by type of project and end product

Variable

2019-2028

Investment (MMUS$)


Type of project

Brownfield 50,843 70% 28

Greenfield 21,661 30% 16

End product

Copper concentrate 50,678 70% 20

SX-EW cathodes 470 1% 2

Mixed 13,569 19% 8

Molybdenum 0 0% 0

Gold and silver 1,753 2% 5

FURE (ER anodes/cathodes) 1,254 2% 2

Iron concentrate and pellet feed 2,972 4% 2

Lithium carbonate/hydroxide 1,807 2% 5

Iodine/nitrates 0 0% 0


From the data in Table 4, it is clear the lack of greenfield projects, only 30%. This is in line with the

thesis that most current projects are geared to operational continuity, rather than to increasing

output. This is the case not only for copper, but also for gold, lithium and industrial minerals.


9


Table 4 also shows that 70% of projects would produce copper concentrate, rather than SX-EW

cathodes via leaching, underlining the change that has occurred in the production structure of

Chile’s copper industry. In the case of industrial minerals, production of nitrates and iodine has been

overtaken by lithium carbonate and hydroxide projects, reflecting the boom in electromobility and

the use of lithium in batteries. In all, thanks to the development of copper sulfide deposits, copper

continues to be the most important mineral in the portfolio.

1.2. Investment by region

Figure 3 shows the regional distribution of investment in the copper and other mining sectors.

Figure 3: Investment portfolio by region, copper mining and other mining


The Antofagasta Region continues to lead mining investment, accounting for 34% of the portfolio.

Out of investment in this region, 96% corresponds to copper. The previous one is followed by the

MMUS$ 8510

MMUS$ 3000

MMU$ 6516

MMUS$ 5312

MMUS$ 16055

MMUS$ 24518

MMUS$ 8591

0 5000 10000 15000 20000 25000 30000

O'Higgins

Metropolitana

Valparaíso

Coquimbo

Atacama

Antofagasta

Tarapacá

Cobre Otros minerales


10


Atacama Region, with 22% of the portfolio. Here, copper is also important, accounting for 84% of

investment. Third place is shared by the Tarapacá and O’Higgins Regions, which each account for

around 12%. In the former, copper accounts for 96% of investment and, in the latter, 100%. It is

important to note that 75% of investment corresponds to northern Chile where 87% of it would be

in copper.

A more detailed analysis can be seen in the distribution of investment by region and conditionality

(Table 5).

According to the data collected, copper mining accounts for 91% of the total investment envisaged

in the portfolio, with 31 initiatives corresponding to Codelco, large or medium-scale copper mining

companies and state-owned or private metallurgical plants.

Table 5: Investment in copper mining by region and condition of projects

REGION

Total Base Probable Possible Potential

Investment

(MMUS$)

N° projects

% of total

investment

Investment

(MMUS$)

N° projects

Investment

(MMUS$)

N° projects

Investment (MMUS$)

N° projects

Investment

(MMUS$)

N° projects

Tarapacá 8,241 3 11.4% 4,739 1 302 1 3,200 1 0 0

Antofagasta 23,456 8 32.4% 8,226 2 6,820 4 3,411 1 5,000 1

Atacama 13,473 9 18.6% 147 1 4,450 5 951 1 7,925 3

Coquimbo 2,424 3 3.3% 1,300 0 0 0 1,124 2 0 0

Valparaíso 6,516 2 9.0% 3,145 1 0 0 81 0 3,290 1

O'Higgins 8510 1 11.7% 8,410 1 0 0 100 0 0 0

Santiago 3,000 1 4.1% 0 0 3,000 1 0 0 0 0

TOTAL 65,621 31 90.5% 25,967 8 14,572 11 8,867 7 16,215 5


As shown in Figure 3, most investment in copper mining corresponds to the Antofagasta Region and

64% of this investment has a higher probability of materialization in the timeframe estimated by the

projects’ owners (base + probable projects), with six initiatives valued as shown in Table 5.

The Atacama Region is the second most important destination for investment in copper mining.

However, 66% of this investment has a lower probability of materialization in the expected

timeframe (possible + potential projects).

The O’Higgins and Tarapacá Regions take third and fourth place in copper investment, respectively.

In the former, 99% of the investment has a higher probability of materialization in the expected

timeframe while, in the latter, the figure drops to 61%.


11


The Valparaíso and Santiago Regions take fifth and sixth place, respectively. In the former, projects

are divided approximately equally between a higher and lower probability while, in the latter, 100%

of the projected investment is probable.

Finally, in the Coquimbo Region, the portfolio is less mature and 54% of projects are in the later

stage of studies.

Table 6 shows the regional distribution of investment in the gold, iron, lithium and industrial

minerals sectors.

Table 6: Investment in gold, iron and industrial minerals by region and condition of projects

REGION

Total Base Probable Possible Potential

Investment (MMUS$)

N° projects

% of total investment

Investment (MMUS$)

N° projects

Investment (MMUS$)

N° projects

Investment (MMUS$)

N° projects

Investment (MMUS$)

N° projects

Tarapacá 350 1 0.5% 0 0 0 0 350 1 0 0

Antofagasta 1,062 4 1.5% 480 2 582 2 0 0 0 0

Atacama 2,582 7 3.6% 84 1 200 1 2,298 5 0 0

Coquimbo 2,888 1 4.0% 0 0 0 0 0 0 2,888 1

TOTAL 6,882 13 9.5% 564 3 782 3 2,648 6 2,888 1


Investment in other mining sectors accounts for 10.7% of the 2019-2028 portfolio with 13 projects,

located between the Tarapacá and Coquimbo Regions.

Projects in sectors such as gold, iron, lithium and industrial minerals are mostly possible or potential

(80% and seven projects), indicating that sectors other than copper still represent a higher risk of

projects not being implemented in the timeframe envisaged in their engineering studies.

1.3. Origin of investment

Chile stands out as a mining country in which local public and private investment in the industry is

important. However, Chile has an open economy and, as discussed in the next chapter, an important

group of international companies invest in Chile, either as the direct owners of an operation or as

partners of the operators of new initiatives.


12


Figure 4: Investment portfolio by country of origin (MMUS$ and %)

(*) Others are Poland and South Africa.


The investment in the 2019-2028 portfolio has its origin in seven countries, led by Chile where

Codelco and Antofagasta Minerals together account for 86%. Chile is followed by Canada, with Teck,

Goldcorp and Capstone Mining accounting for 90% of the inflow from this country.

The third most important source of investment is the United Kingdom, represented principally by

Anglo American and Mantos Copper, which account for 99% of investment from this country.

Fourth position is shared by the United States and Australia. In the case of the United States,

Freeport McMoRan, with its El Abra Mill Concentrator project, accounts for 94% of investment

while, in the case of Australia, BHP accounts for 68%.

Finally, the group of “others” comprises Poland and South Africa. Together, they account for 4% of

total investment.

Tables 7 and 8 show a breakdown of Figure 4, separating copper from other minerals.

ChileMMUS$36,625;

51%

CanadaMMUS$15,157;

21%

UKMMUS$7,610

10%

USAMMUS$5,300;

7%

AustraliaMMUS$4,811;

7%

OthersMMUS$3,000

4%


13


Table 7: Investment in copper mining by country of origin and condition (MMUS$)

Country of origin

Amount % of

investment Base Probable Possible Potential

Chile 33,387 46.0% 17,787 6,643 5,667 3,290

Canada 13,639 18.8% 4,739 1,700 0 7,200

Australia 3,985 5.5% 3,260 0 0 725

United States 5,000 6.9% 0 0 0 5,000

United Kingdom

7,610 10.5% 181 4,229 3,200 0

Poland 2,000 2.8% 0 2,000 0 0

South Africa 0 0.0% 0 0 0 0

TOTAL 65,621 90.5% 25,967 14,572 8,867 16,215

Source: Compiled by COCHILCO using public information from each project.

Table 8: Investment in gold, iron, lithium and industrial minerals by country of origin and condition (MMUS$)

Country of origin

Amount % of

investment Base Probable Possible Potential

Chile 3,238 4% --- --- 350 2,888

Canada 1,518 2% 180 782 556 ---

Australia 826 1% 84 --- 742 ---

United States 300 0% 300 --- --- ---

South Africa 1,000 1% --- --- 1,000 ---

TOTAL 6,882 9.5% 564 782 2,648 2,888



14


Chapter 2:

Estimate of annual distribution of investment in

portfolio projects


15


2. Estimate of annual distribution of investment in portfolio projects

This chapter provides a breakdown by year of the investment to be materialized over the next ten

years. For reasons of clarity, the information is grouped into three main periods:

- Before 2019: US$10,588 million, equivalent to 14.6% of the portfolio, corresponds to

projects materialized before 2019 but which have yet to start operation.

- Short and medium-term: US$47,158 million, or 65% of the portfolio, would be materialized

in 2019-2023 when 35 of the 44 projects that make up the portfolio would start operation.

- Long-term: US$14,756 million, or 20.4% of the portfolio, would be materialized in 2024-

2028 when the last nine projects in the portfolio would start operation.

Figure 5 shows the annual flow of the investment estimated for 2019-2028, separating copper from

“other minerals” (gold, iron, lithium and industrial minerals).

Figure 5: Annualized investment, materialized and pending, by type of mining


In estimating annual investment, it is necessary to take into account the investment’s conditionality,

based on the public information available, in order to identify the investment that is “more likely”

to be implemented in the corresponding period (Table 9).

85,8%

93,8%

85,1%89,0%

92,8%87,8%

97,5%

14,2%

6,2%

14,9%

11,0%

7,2%

12,2%

2,5%

10.588

6.618

10.375

11.677

9.734 8.755

14.756

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

Anterior a2019

2019 2020 2021 2022 2023 2024 - 2028

Mill

on

es d

e d

óla

res

Cobre Otros minerales Total inversión


16


Table 9: Annualized mining investment in Chile, 2019-2028, by probability of materialization and sector

SECTOR AND CONDITION Before 2019

2019 2020 2021 2022 2023 Subtotal

2019-2023

2024-

2028 TOTAL

% of

investment

TOTAL 10,588 6,618 10,375 11,677 9,734 8,755 47,158 14,756 72,503 100%

Base + Probable 8,394 6,001 8,345 9,235 6,277 3,176 33,034 457 41,885 57.8%

Possible + Potential 2,194 617 2,030 2,442 3,457 5,579 14,125 14,299 30,618 42.2%

STATE-OWNED MINING 3,906 2,982 3,567 3,223 3,899 3,851 17,522 4,117 25,546 100%

Base + Probable 3,529 2,701 2,989 2,861 2,928 2,508 13,987 197 17,713 69.3%

Possible + Potential 377 281 578 362 971 1,343 3,535 3,920 7,833 30.7%

PRIVATE MINING 6,682 3,636 6,808 8,454 5,835 4,904 29,636 10,639 46,957 100%

Base + Probable 4,865 3,300 5,356 6,374 3,349 668 19,047 260 24,172 51.5%

Possible + Potential 1,817 336 1,452 2,080 2,486 4,236 10,590 10,379 22,785 48.5%


As shown in Figure 2, 58% of the total portfolio corresponds to investment with a higher probability

of materialization. However, Table 9 indicates that, although the private mining sector (copper, gold,

iron, lithium and industrial minerals taken as a whole) accounts for 64.8% of the total portfolio,

investment by the state sector, represented by Codelco and ENAMI, has a higher probability of

materialization in the period analyzed (69.3% of the base + probable portfolio as compared to only

51.5% for the private sector).

Moreover, it can be seen that 20% of the investment more likely to materialize has already been

implemented and 78.9% will be materialized within the next five years, leaving a remnant of 1.1%

to be executed after 2023.

2.1. Distribution of investment in copper mining

Table 10 shows the annual flow of investment in copper mining by sector - Codelco, large-scale and

medium-scale private mining and metallurgical plants - ranking the investment from greater to

lesser probability of materialization within the timeframe envisaged by the projects’ owners.


17


Table 10: Annual distribution of investment in copper mining by condition of projects (MMUS$)

COPPER MINING AND CONDITION

Before 2019

2019 2020 2021 2022 2023 Subtotal

2019-2023 2024-2028

TOTAL % of

investment

TOTAL 9,087 6,206 8,831 10,396 9,029 7,683 42,144 14,389 65,621 100%

Base 6,076 4,881 4,927 4,095 3,285 2,506 19,694 197 25,967 39.6%

Probable 2,108 927 2,986 4,804 2,839 648 12,204 260 14,572 22.2%

Possible 565 313 615 619 1,343 2,111 5,001 3,301 8,867 14%

Potential 338 85 303 878 1,562 2,418 5,246 10,631 16,215 25%

CODELCO 3,850 2,302 3,228 3,104 3,840 3,851 16,325 4,117 24,292 100%

Base 3,455 2,121 2,598 2,443 2,559 2,506 12,227 197 15,879 65.4%

Probable 74 24 339 418 369 2 1,152 0 1,226 5.0%

Possible 268 139 228 190 601 795 1,953 1,676 3,897 16.0%

Potential 53 18 63 53 311 548 993 2,244 3,290 13.5%

LARGE-SCALE MINING 4,682 3,066 4,767 6,477 4,892 3,634 22,835 10,147 37,664 100%

Base 2,621 2,204 2,277 1,652 726 0 6,859 0 9,480 25.2%

Probable 1,821 765 2,290 4,075 2,440 633 10,203 260 12,284 32.6%

Possible 50 45 85 275 615 1,131 2,151 1,500 3,700 9.8%

Potential 190 52 115 475 1,111 1,870 3,623 8,387 12,200 32.4%

MEDIUM-SCALE MINING 450 37 297 696 238 198 1,466 125 2,041 100%

Probable 164 17 157 311 30 13 528 0 692 33.9%

Possible 191 5 15 35 68 185 308 125 624 30.6%

Potential 95 15 125 350 140 0 630 0 725 35.5%

MET./IND. PLANTS 105 801 539 119 59 0 1,518 0 1,624 100%

Base 0 556 52 0 0 0 608 0 608 37.4%

Probable 49 121 200 0 0 0 321 0 370 22.8%

Possible 56 124 287 119 59 0 589 0 646 39.8%


The table above indicates that copper projects for US$9,087 million have already been

implemented, leaving US$42,144 million for implementation over the next five years and US$14,389

million for after 2023.

Out of the US$40,539 million in copper mining initiatives more likely to be implemented within the

timeframe anticipated by their owners, 20.2% has already been implemented and around

US$31,898 million is scheduled for 2019-2023, leaving a remnant of US$457 million for after 2023.

The projects with a lower probability of materialization within the expected timeframe represent an

investment of US$10,248 million over the next five years, leaving US$13,932 million for

materialization after 2023. Only 3.6% of the total investment in this group has already been

implemented.


18


2.2. Distribution of investment in gold, iron and industrial minerals

Table 11 summarizes annual investment in the gold, iron and industrial minerals sectors.

Table 11: Annual distribution of investment in gold, iron and industrial minerals by condition of projects (MMUS$)

TYPE OF MINING AND CONDITION

Before 2019

2019 2020 2021 2022 2023 Subtotal

2019-2023 2024- 2028

TOTAL % of

investment

TOTAL 1,501 412 1,544 1,281 705 1,072 5,014 367 6,882 100%

Base 127 78 275 84 0 0 437 0 564 8.2%

Probable 83 115 157 252 153 22 699 0 782 11.4%

Possible 315 214 1,082 865 172 0 2,333 0 2,648 38.5%

Potential 976 5 30 80 380 1,050 1,545 367 2,888 42.0%

GOLD 265 129 515 860 247 22 1,773 0 2,037 100%

Probable 56 85 42 52 75 22 276 0 332 18.9%

Possible 267 100 602 415 37 0 1,154 0 1,421 81.1%

IRON 1,001 20 60 94 380 1,050 1,604 367 2,972 100%

Base 25 15 30 14 0 0 59 0 84 2.8%

Potential 976 5 30 80 380 1,050 1,545 367 2,888 97.2%

IND. MINERALS 177 207 840 720 213 0 1,980 0 2,157 100%

Base 102 63 245 70 0 0 378 0 480 22.3%

Probable 27 30 115 200 78 0 423 0 450 20.9%

Possible 48 114 480 450 135 0 1,179 0 1,227 56.9%


In general, projects in minerals other than copper continue to have a lower probability of

materialization within the timeframe anticipated by their owners. In the case of gold, for example,

81.1% of the investment has a lower probability of materialization within this period or is more

subject to changes in the market while, in iron, this is the case of 97.2% of the portfolio. The case of

industrial minerals is slightly different since the conditionality of investments is more equally

distributed, reflecting primarily the lithium projects due to be implemented within the next few

years.


19


Chapter 3:

Maximum productive contribution to

Investment Portfolio, 2019


20


3. Maximum productive contribution to Investment Portfolio, 2019

The inclusion of projects in this survey is determined by their potential contribution to output. Based

on the information available for the different projects, this chapter seeks to estimate the maximum

contribution they would make to the country’s mining output.

3.1. Contribution to copper output

Table 12Table 12 shows the initiatives related to copper output.

Table 12: Copper projects and maximum output

Start-up Project Mining sector Condition Operator Product Annual Cu production

capacity (ton)2

2020 CONCENTRATE LEACHING Met plants PROBABLE Ecometales Limited Agencia en Chile Fine Cu in PLS 60,000

2020 MANTOS BLANCOS CONC. DEBOTTLE. Large min. - Cu BASE Mantos Copper Cu in conc. 19,000

2021 LOS PELAMBRES MARG. EXPAN. PHASE I Large min. - Cu BASE Minera Los Pelambres Cu in conc. 66,000

2021 SPENCE GROWTH OPTION Large min. - Cu BASE Pampa Norte Cu in conc. 198,000

2021 DIEGO DE ALMAGRO Med. min. - Cu PROBABLE Compañía Minera Sierra Norte S.A. Cu in conc. & Sx-Ew cathodes

43,600

2021 MANTOVERDE DEVELOPMENT Large min. - Cu PROBABLE Mantos Copper Cu in conc. 87,000

2021 RAJO INCA (*) State - Cu PROBABLE Codelco Salvador Div. Cu in conc. 70,000

2022 LOS BRONCES INTEGRADO (*) Large min. - Cu PROBABLE Anglo American Sur S.A. Cu in conc. 380,000

2022 COLLAHUASI COMP. INST. 170 KTPD Large min. - Cu PROBABLE Doña Inés de Collahuasi Cu in conc. 30,000

2022 PRODUCTORA Med. min. - Cu POTENTIAL Sociedad Minera El Águila Ltda. Cu in conc. & Sx-Ew cathodes

59,200

2022 ZALDÍVAR OPERATIONAL CONTINUITY (*) Large min. - Cu PROBABLE Compañía Minera Zaldívar SpA Sx-Ew cathodes 126,000

2022 QUEBRADA BLANCA HYPOGENE Large min. - Cu BASE Cía. Minera Teck Quebrada Blanca Cu in conc. 270,000

2022 SIERRA GORDA EXPANSION 230 KTPD Large min. - Cu PROBABLE Sierra Gorda SCM Cu in conc. 120,000

2023 LOS PELAMBRES MARG. EXPAN. PHASE II Large min. - Cu POSSIBLE Minera Los Pelambres Cu in conc. 44,000

2023 SANTO DOMINGO Large min. - Cu PROBABLE Santo Domingo SCM Cu in conc. 168,300

2023 NUEVA PAIPOTE Met. plants POSSIBLE Hernán Videla Lira Smelter Cu anodes 70,000

2023 NEW MINE LEVEL (*) State - Cu BASE Codelco El Teniente Div. Cu in conc. 330,000

2023 PLAYA VERDE Med. min. - Cu PROBABLE Copper Bay Cu in conc. & Sx-Ew cathodes

8,640

2024 EL ESPINO Med. min. - Cu POSSIBLE Pucobre Cu in conc. 35,000

2024 DOMINGA Iron POTENTIAL Andes Iron Cu in conc. 21,000

2024 NUEVAUNIÓN PHASE I Large min. - Cu POTENTIAL NuevaUnión SpA Cu-Mo-Au in conc. 175,000

2024 CENTINELA DISTRICT DEVELOPMENT Large min. - Cu PROBABLE Minera Centinela Cu in conc. 270,000

2025 COLLAHUASI PROD. CAP. IMP. 210 KTPD Large min. - Cu POSSIBLE Doña Inés de Collahuasi Cu in conc. & Sx-Ew cathodes

140,000

2026 RT SULPHIDES PHASE II State - Cu POSSIBLE Codelco Radomiro Tomic Div. Cu in conc. 250,000

2026 EL ABRA CONC. (EX-EL ABRA MILL) Large min. - Cu POTENTIAL Cía. Contractual Minera El Abra Cu in conc. 300,000

2026 ANDINA EXPANSION State - Cu POTENTIAL Codelco Andina Div. Cu in conc. 150,000

2027 NUEVAUNIÓN PHASES II & III Large min. - Cu POTENTIAL NuevaUnión SpA Cu-Au in conc. 75,000

(*)It is the maximum that would be achieved through operational continuity projects, not necessarily the additional contribution to

existing operations.

2 Reference production capacity based on public information; corresponds to the maximum achievable by the operation, not an estimate

of constant output.


21



In a trend also seen in previous years, new projects focus on the production of concentrate. As a

result, out of the estimated maximum of 3.52 million tons of fine copper that the projects included

in the portfolio would contribute by 2028, without considering their conditionality, 92% would

correspond to concentrate.

As indicated in our 2018 report, this contribution cannot simply be added to existing copper

production because it is necessary to take into account a number of factors: 1) it is only an estimate

of the maximum contribution to output and does not take projects’ conditionality or their expected

production profile into account; 2) output at existing operations will naturally decline since an

important part of the portfolio corresponds to replacement projects or “new” projects that

completely redesign the production method of an existing operation.

3.2. Contribution to output of molybdenum, gold, silver and iron

Part of the change in the production matrix of the copper mining sector seen over the past few years

is also reflected in byproducts such as molybdenum, gold and silver, which are also exported by

Chile. Gold and silver, as well as iron, are themselves important, without direct relation to copper

mining. A summary of their contribution, in the form of primary and secondary production, is shown

in Table 13.

Table 13: Projects contributing to molybdenum, gold, silver and iron output by 2028

Start-up

Project Mining sector

Region Condition Operator Product Annual

production capacity

Units

2020 EL PEÑÓN OPER. CONTINUITY Gold Antofagasta PROBABLE Minera Meridian Ltda. Doré 1,025 / 40,308 kg Au / kg Ag

2021 SOBERANA (EX-MARIPOSA) Iron Atacama BASE Admiralty Resources Fe conc. 64,260 ton Fe conc.

2021 SALARES NORTE Gold Atacama POSSIBLE Gold Fields Doré 7,860 kg Au

2021 SPENCE GROWTH OPTION Large min. - Cu Antofagasta BASE BHP Mo conc. 7,500 ton Mo

2022 NUEVA ESPERANZA - ARQUEROS Gold Atacama POSSIBLE Kingsgate Consolidated Ltd. Doré 250 / 100 kg Au / ton Ag

2023 FENIX (EX-CERRO MARICUNGA) Gold Atacama POSSIBLE Rio2 Limited Doré 2,500 kg Au

2023 LA COIPA PHASE 7 Gold Atacama PROBABLE Kinross Doré 6,200 kg Au

2024 NUEVAUNIÓN PHASE I Large min. - Cu Atacama POTENTIAL NuevaUnión SpA Mo-Au in conc. 1,700 / 4,800 ton Mo / kg Au

2024 DOMINGA Iron Coquimbo POTENTIAL Andes Iron Pellet feed 7,200,000 ton Fe

2027 NUEVAUNIÓN PHASES II & III Large min. - Cu Atacama POTENTIAL NuevaUnión SpA Au in conc. 2,850 kg Au



22


The contribution to molybdenum production would come from the Spence Growth Option project

and the NuevaUnión project Phase I, which together would account for a maximum contribution of

9,200 tons as from 2024.

In the case of gold, primary production would come from five initiatives that would make a

maximum contribution of 17.8 tons. Together with secondary production of 7.7 tons from the

NuevaUnión project (Phases I, II and III), this would give a total maximum contribution of 25.5 tons

by 2028. In silver, the El Peñón Operational Continuity and Nueva Esperanza projects would together

contribute 40.4 tons as from 2022, when the latter would start operation.

The portfolio contains two iron projects, representing a contribution of 64,260 tons of concentrate

and 11 million tons of mineral in pellet feed, giving a total of some 7.24 million tons of fine iron,

assuming a grade of 65% at both operations.

3.3. Contribution to output of lithium and other industrial minerals

The portfolio includes six projects of this type. Five of these correspond to lithium, which has

continued to gain importance compared to the iodine and nitrates produced by Chile since before

1880.

Table 14: Projects contributing to output of lithium and other industrial minerals

Start-up Project Mining sector

Region Condition Operator Product Annual

production capacity

Units

2020 SALAR DEL CARMEN EXPANSION Lithium Antofagasta BASE SQM Salar S.A. Lithium carbonate/hydroxide

22,000 / 26,000 ton Li2CO3 / ton LiOH

2021 LA NEGRA PLANT EXPANSION - PHASE 3 Lithium Antofagasta BASE Rockwood Litio Limitada Carbonate 42,700 ton Li2CO3

2021 NUEVA VICTORIA – NEW IODINE PLANT Ind. min. Tarapacá POSSIBLE SQM S.A. Iodine / Sodium-potassium nitrate

6,500 / 1,200,000 ton

2021 MARICUNGA SALTS EXPANSION Lithium Atacama POSSIBLE SIMCO SpA Carbonate/hydroxide/potassium chloride

5,700 / 9,100 / 38,900

ton Li2CO3 / ton LiOH / ton KCL

2022 BLANCO PROJECT Lithium Atacama POSSIBLE Minera Salar Blanco S.A. Carbonate/potassium chloride

20,000 / 58,000 ton Li2CO3 / ton KCL

2022 LITHIUM CARBONATE EXPANSION TO 180 KTPY

Lithium Antofagasta PROBABLE SQM Salar S.A. Lithium carbonate

110,000 ton Li2CO3


As shown in Table 14, the potential contribution to lithium output comprises some 200,400 tons of

Li2CO3 and 35,100 tons of LiOH as from 2022, when the last lithium project would be implemented.

SQM continues to be the most important player in this segment, accounting for 66% and 74% of

new production of lithium carbonate and lithium hydroxide, respectively. In lithium carbonate, it is


23


followed by Rockwood while, in lithium hydroxide, the second most important player is Simco SpA

with the Maricunga Salts project, which would account for 26% of new production.

Other industrial minerals include lithium byproducts such as potassium chloride, with a total

production of 96,900 tons of which Simco SpA and Minera Salar Blanco S.A. would account for 40%

and 60%, respectively. Through its new iodine plant at the Nueva Victoria site, SQM would

contribute 6,500 tons of iodine and 1.2 million tons of nitrates.


24


Chapter 4:

Comparison of mining investment portfolios:

2019 vs 2018


25


4. Comparison of mining investment portfolios to 2019

This chapter examines the evolution of the investment portfolios. It first compares the current

portfolio with the 2018 portfolio (section 4.1) before going on to review the evolution of earlier

portfolios, examining the growth of their investment volume since 2006 compared to other

variables (section 4.2).

4.1. Comparison of 2018 and 2019 portfolios

The changes between the 2018 and 2019 portfolios as regards the projects’ probability of

materialization, timeframe and the investment involved are shown in Figure 6 and Table 15. They

include:

a) Four projects, valued at US$6,394 million, which were part of the 2018 portfolio, are not in the

2019 portfolio because they started operation in the intervening period.

b) SQM’s Orcoma project, valued at US$230 million last year, was not included in the 2019

portfolio due to its restructuring. This project was planned to extract 11 million tons of caliche

per year to produce 2,500 tons of iodine and 320,325 tons of salts rich in nitrates. However,

SQM has decided to postpone its development with a view to optimizing the company’s existing

iodine and nitrates operations.

c) Five new projects, valued at US$7,209 million, were incorporated into the portfolio. They are

two copper mining projects (the 210-ktpd Collahuasi Production Capacity Improvement project

for US$3,200 million and the Los Bronces Integrado project for US$3,000 million); a gold mine

replacement project (El Peñón Operational Continuity project for US$132 million); and two

industrial minerals projects (lithium Blanco project for US$527 million and SQM’s Nueva

Victoria - New Iodine Plant project for US$350 million, which has replaced the Orcoma project

in its short-term investment portfolio).

d) Eight initiatives, valued at US$9,113 million, showed no change with respect to 2018.

e) In five projects, there is no change in the date of implementation or conditionality but the

amount of the investment has been modified. They correspond to four of Codelco’s five

structural projects, with an increase in investment of US$2,891 million, and the Quebrada

Blanca Hypogene project, with an increase in investment of US$39 million. In addition, “other

Codelco investments” show a net increase of US$2,513 million for the next five years as

compared to the 2018 portfolio, explained mainly by the bringing forward of investments in

paste tailings for the underground Chuquicamata mine and other investments required for this

project’s operation over the next five years.


26


f) The start-up of 16 initiatives, valued at US$21,477 million, has been put back by between

one and two years, either because the owners have indicated that this will be the case or

because, based on the methodology explained in this report, COCHILCO estimates that it

will be the case. None of these changes of start-up date affects the project’s probability of

materialization or the estimated investment.

g) In the case of six projects, the probability of materialization, value and/or start-up date

have changed, implying a net increase in investment of US$728 million.

Figure 6: 2018 portfolio vs. 2019 portfolio


Table 15: Main changes in investment portfolio, 2019 vs. 2018

ITEM N° projects

Investment portfolio

2018 (MMUS$)

Investment portfolio

2019 (MMUS$)

Difference 2019 vs. 2018

(MMUS$)

Projects that started operation 4 6,394 0 -6,394

Projects eliminated from portfolio due to restructuring 1 230 0 -230

New projects incorporated into portfolio 5 0 7,209 7,209

Projects without changes 8 9,113 9,113 0

Projects with change only in value 5 13,489 16,419 2,930

Projects only with delay of start-up date 16 21,477 21,477 0

Projects redefined with change of condition/value and/or start-up date 6 7,411 8,138 728

Other Codelco investments* 4 7,634 10,147 2,513

DIFFERENCE MMUS$ 65,747 72,503 6,756

65.74744 projects

- 2301 project

- 6.3944 projects + 6.171

+ 7.2095 projects

72.50344 projects

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

Cartera 2018 Reestructurados Entran enoperación

Ajustesinversionales

Proyectos nuevos CARTERA 2019

Mill

on

es

de

dó

lare

s


27


(*) Includes “other development projects”, “information projects”, “FURE projects” and “tailings dams”.


The most important differences between the two portfolios regarding probability of materialization, type of mining and these two variables together, as well as by region, are shown in the tables below.

Table 16: Comparison of 2018 and 2019 portfolios by condition of projects

Condition of materialization

2018-2027 2019-2028

Investment(MMUS$)

% of total N° projects Investment(MMUS$)


BASE 21,931 33.4% 14 26,531 36.6% 12

PROBABLE 14,326 21.8% 11 15,354 21.2% 14

POSSIBLE 10,135 15.4% 12 11,515 15.9% 12

POTENTIAL 19,355 29.4% 7 19,103 26.3% 6

BASE + PROBABLE 36,257 55.1% 25 41,885 57.8% 26

POSSIBLE + POTENTIAL 29,490 44.9% 19 30,618 42.2% 18


In this new survey, the group of projects with a higher probability of materialization shows an

increase of 2.7 percentage points on 2018, indicating the robustness of the investment portfolio for

the next decade.

Table 17 shows that the importance of the “copper” sector is a result of the sum of the investments

of Codelco and large and medium-scale private companies and in metallurgical plants, which have

been included in the portfolio as from 2014. It also shows that, despite the exit of two projects

valued at US$6,014 million, the portfolio of copper projects increases by 11%, due to the

incorporation of three projects for US$6,272 million.

Table 17: Comparison of 2018 and 2019 portfolios by mining sector

Type of mining 2018-2027 2019-2028 Difference

in investment

Investment (MMUS$)

% of total N° projects Investment (MMUS$)


Codelco 22,159 33.7% 9 24,292 33.5% 8 9.6%

Large min. - Cu 31,675 48.2% 15 37,664 51.9% 16 18.9%

Med. min. - Cu 2,041 3.1% 4 2,041 2.8% 4 0.0%

Gold 2,037 3.1% 4 1,753 2.4% 5 -13.9%

Metallurgical plants 3,228 4.9% 4 1,624 2.2% 3 -49.7%

Iron 2,958 4.5% 2 2,972 4.1% 2 0.5%

Lithium 1,280 1.9% 4 1,807 2.5% 5 41.2%

Industrial minerals 370 0.6% 2 350 0.5% 1 -5.4%

Copper 59,103 89.9% 32 65,621 90.5% 31 11.0%

Gold 2,037 3.1% 4 1,753 2.4% 5 -13.9%

Lithium 1.280 1.9% 4 1.807 2.5% 5 41.2%

Others* 3.328 5.1% 4 3.322 4.6% 3 -0.2%

(*) Corresponds to the sum of iron and industrial minerals.


28



Investment in “non-copper” projects shows a drop on the 2018 portfolio. This is particularly marked

in gold, reflecting an adjustment to investment in the Nueva Esperanza - Arqueros and Fenix (Ex-

Cerro Maricunga) projects. However, investment in lithium projects increases by 41.2%, due to the

incorporation of Blanco project into the portfolio. In Table 18, projects are shown by both sector

and probability of materialization.

Table 18: Comparison of 2018 and 2019 portfolios by mining sector and condition of projects

Type of mining 2018-2027 2019-2028

BASE PROBABLE POSSIBLE POTENTIAL BASE PROBABLE POSSIBLE POTENTIAL

Codelco 15,088 - 3,529 3,542 15,879 1,226 3,897 3,290

Large min. - Cu 3,941 13,034 2,500 12,200 9,480 12,284 3,700 12,200

Med. min. - Cu - 692 624 725 - 692 624 725

Gold - - 2,037 - - 332 1,421 -

Metallurgical plants 2,212 370 646 - 608 370 646 -

Iron 70 - - 2,888 84 - - 2,888

Lithium 480 - 800 - 480 450 877 -

Industrial minerals 140 230 - - - - 350 -

Copper 21,241 14,096 7,299 16,467 25,967 14,572 8,867 16,215

Gold - - 2,037 - - 332 1,421 -

Lithium 480 - 800 - 480 450 877 -

Others* 210 230 - 2,888 84 - 350 2,888

(*) It is the sum of iron and industrial minerals.


In terms of the distribution of investment by region, Table 19Table 19 shows that it has increased

by 61.2% in central-southern Chile,3 predominantly in the Metropolitan Region (100% increase). The

Tarapacá Region in northern Chile also sees an increase of 64.2%.

Table 19: Comparison of 2018 and 2019 portfolios by region

Region 2018-2027 2019-2028 Difference

in investment

Investment (MMUS$)

% of total N° projects Investment (MMUS$)


Tarapacá 5,232 8.0% 3 8,591 11.8% 4 64.2%

Antofagasta 28,025 42.6% 15 24,518 33.8% 13 -12.5%

Atacama 16,247 24.7% 17 16,055 22.1% 17 -1.2%

Coquimbo 5,062 7.7% 4 5,312 7.3% 4 4.9%

Valparaíso 5,190 7.9% 3 6,516 9.0% 3 25.6%

Santiago 0 0.0% 0 3,000 4.1% 1 100.0%

O'Higgins 5,992 9.1% 2 8,510 11.7% 2 42.0%

3 Northern Chile comprises the Tarapacá to Coquimbo Regions and central-southern Chile comprises the Valparaíso, Santiago and

O’Higgins Regions.


29


Northern Chile 54,566 83.0% 39 54,476 75.1% 38 -0.2%

Central-southern Chile

11,182 17.0% 5 18,026 24.9% 6 61.2%


4.2. Historical comparison of portfolios

This is the third consecutive year in which the investment portfolio for the next ten years has shown

an increase. However, this should be read with caution since much of the increase this year is the

result of higher expected investment in some projects, particularly those of Codelco. Figure 7Figure

7 shows the relationship between mining companies’ investment plans and the nominal and real

price of copper.

Figure 7: Investment portfolios surveyed by COCHILCO, 2006-2019


Since 2006, 50 projects valued at US$42,553 million have been implemented, with 93.2%

corresponding to copper projects, 0.2% to gold and silver and 6.7% to iron and industrial minerals

(Figure 8). It is important to note that no new gold mining projects have been implemented since

2007.

18.925 21.941

29.695

43.23151.063

66.890

104.300

112.556

104.851

77.290

49.208

64.856

65.747 72.503

0

50

100

150

200

250

300

350

400

450

0

20.000

40.000

60.000

80.000

100.000

120.000

cUS$

/lb

Mill

on

es d

e d

óla

res

Cobre* Oro y plata Hierro y minerales industriales Cu nominal Cu real


30


Figure 8: Projects starting operation between 2006 and 2018


No new projects will start operation in 2019 while projects valued at US$863 million will begin their ramp-up in 2020. This year, copper projects once again stand out, with the inclusion of the Collahuasi and Los Bronces. Gold is represented by El Peñón Operational Continuity project and lithium by Blanco project, which submitted its Environmental Impact Assessment Study (EIA) at the end of 2018 (Figure 9Figure 9).

Figure 9: New projects entering the portfolio between 2007 and 2019


7 proyectosMMUS$ 2.859

3 proyectosMMUS$ 71


1 proyectoMMUS$ 172







2 proyectosMMUS$ 511



0

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

9.000

10.000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

MM

US$

Cobre Oro y plata Hierro y minerales industriales


1 proyectoMMUS$ 2.500












0

5.000

10.000

15.000

20.000

25.000

30.000

35.000

40.000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

MM

US$

Cobre Oro y plata Hierro y minerales industriales


31


As has been the case over the past couple of years, the maximum potential contribution of the copper mining projects surveyed held steady in 2019 as compared to 2018. However, the amount of investment involved increased by 14.5%.

Figure 10: Historical copper portfolios and contribution to output


As indicated above, a significant part of the 2019 portfolio reflects an increase in the cost of the initiatives as compared to 2018. Given that the associated production shows little change, this increase in cost implies a 15% rise in capital intensity per ton of fine copper produced from US$15,800 to US$18,200.

43

.21

3

55

.32

8

55

.87

5

63

.99

7

2,20

3,343,53 3,52

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

4,0

4,5

5,0

0

10.000

20.000

30.000

40.000

50.000

60.000

70.000

80.000

90.000

100.000

Mto

n d

e C

u f

ino

MM

US$

Inversión en cobre Aporte productivo en cobre


32


Figure 11: Capital intensity per copper project and per ton of fine Cu contributed


816,51.036,3

1.293,6

1.791,21.657,5

2.012,8

2.680,32.890,6

2.504,12.293,6

1.662,11.784,81.995,5

2.285,6

8,19,0

10,2

13,0

11,0

16,6

20,519,0

16,517,7

19,6

16,615,8

18,2

0,0

5,0

10,0

15,0

20,0

25,0

0

1.000

2.000

3.000

4.000

5.000

MU

S$/C

u f

ino

MM

US$

/pro

yect

o

Intensidad de capital por proyecto de cobre Intensidad de capital por cobre fino a producir


33


Chapter 5:

Conclusions


34


5. Conclusions

The survey of mining investments for 2019-2028 detected 44 initiatives valued at US$72,503 million.

This is the third consecutive year in which the value of the portfolio for the next ten years has

increased. However, this should be read with caution since much of the increase is the result of the

higher cost of projects, particularly those of the state-owned copper company, Codelco.

Since 2006, 50 projects valued at US$42,553 million have been implemented, with 93.2%

corresponding to copper, 0.2% to gold and silver and 6.7% to iron and industrial minerals. These

figures are important demonstrating the ongoing dynamism of Chile’s mining industry, but it is also

necessary to look at how exactly the national and regional impact of this investment is measured.

The main results of the analysis of the investment portfolio can be summarized as follows:

Origin of investment

The investment represented by the 2019-2028 portfolio has its origin in seven countries, led by

Chile, where the main players are Codelco and Antofagasta Minerals, which together account for

86% of local investment. Chile is followed by Canada, with Teck and Capstone Mining as the main

investors, accounting for 90% of Canadian investment.

In third position, the United Kingdom is represented mainly by Anglo American and Mantos Copper,

which account for 99% of investment from this country.

Fourth place is shared by the United States and Australia. In the case of the United States, Freeport

McMoRan and its El Abra Mill Concentrator project accounts for 94% of investment while. In the

case of Australia, BHP accounts for 68%.

The “others” group includes Poland and South Africa. Together, they account for 4% of the total

investment in the portfolio.

State mining, represented by Codelco and ENAMI, is responsible for 35.2% of the investment in the

portfolio while the private sector, including large and medium-scale copper mining as well as gold,

silver, iron, lithium and industrial minerals, is responsible for the remaining 64.8%, with copper

mining predominating (85.3% of private-sector investment).

Purpose of investment

Out of the 44 initiatives that make up the portfolio, 53.3% are new projects and the remaining 46.7%

are replacement or expansion projects. As regards the stage of the project, 62.4% are at the

feasibility stage and 36.6% are already being implemented.

In the case of environmental permits, 56.9% of the portfolio has completed this stage. Out of these,

12 initiatives, valued at US$26,531 million, have already started construction and 13 have yet to do

so. The latter are a focus of attention and analysis on the part of the authorities, as reflected this


35


year in the creation of the Economy Ministry’s Office for the Management of Sustainable Projects

(OGPS). The survey shows that 59.1% of the portfolio will be implemented within the next five years,

leaving seven major projects for the subsequent five years.

In line with the trend observed in recent years, investment in copper mining in Chile is focusing on

sulfide minerals. This reflects the natural exhaustion of oxide projects or simply the absence of

discoveries of deposits of this type. As a result, 69.9% of the investment envisaged for the next ten

years would be in the production of copper concentrate. In the case of industrial minerals, the focus

is on lithium carbonate and hydroxide projects at the expense of the more traditional production of

iodine and nitrates.

Many mining projects in Chile are geared to the continuity of existing operations, rather than to

increasing output. This is the case for gold, lithium and industrial minerals as well as copper and is

reflected in the fact that only 16 projects, equivalent to 30% of the portfolio, are greenfield.

Investment target Regions

The Antofagasta Region continues to lead mining investment, accounting for 34% of the portfolio.

Out of investment in this region, 96% corresponds to copper. The Antofagasta Region is followed by

the Atacama Region, with 22% of the portfolio. Here, copper is also important, accounting for 84%

of investment. The Tarapacá and O’Higgins Regions take third place, each with a 12% share of

investment. In the former, copper accounts for 96% while, in the latter, it accounts for 100%.

This implies that 75% of the investment corresponds to northern Chile where 87% would be in

copper.

Maximum contribution to output

The new projects focus on the production of concentrate and it is estimated that, by 2028, the

maximum contribution to copper production of the projects surveyed, without considering their

conditionality, would reach around 3.52 million tons of fine copper of which 92% would be

contained in concentrate. Contributions to molybdenum output would come from the Spence

Growth Option and NuevaUnión Phase I projects (9,200 tons of maximum contribution by 2024).

In the case of gold, direct production through five initiatives would contribute a maximum of 17.8

tons. Together with gold as a byproduct of the NuevaUnión (Phases I, II and III) project, which would

reach 7.7 tons, this gives a total maximum contribution to gold output of 25.5 tons by 2028. For

silver, El Peñón Operational Continuity and Nueva Esperanza projects would together contribute

40.4 tons as from 2022, where the latter would start operation.

Iron is represented by two initiatives, with a contribution of 64,260 tons of concentrate and 11

million tons of mineral in pellet feed, giving a total contribution of around 7.24 million tons of fine

iron, assuming an ore grade of 65% for both operations.


36


The potential contribution to lithium output would be around 200,400 tons of Li2CO3 and 35,100

tons of LiOH as from 2022, when the last lithium project would start operation.

In the case of the other industrial minerals, byproducts of lithium such as potassium chloride would

contribute 96,900 tons, of which Simco SpA and Minera Salar Blanco S.A. would account for 40%

and 60%, respectively. SQM’s New Iodine Plant at its Nueva Victoria operation would contribute

6,500 tons of iodine and 1.2 million tons of nitrates.

Conditionality of investment

The portfolio includes 25 projects with a “higher probability of materialization” or, in other words,

classified as base or probable. Representing a total investment of US$36,257 million, they comprise:

12 base projects valued at US$26,531 million of which Codelco accounts for 98%;

14 probable projects valued at US$15,354 million of which the large-scale private mining


The 19 projects with a “lower probability of materialization”, which are classified as possible or

potential, represent a total investment of U$29,490 million. They comprise:

12 possible projects valued at US$11,515 million of which Codelco and large-scale private

mining companies account for 66% and copper mining for 77%;

6 potential projects valued at US$19,103 million of which the large-scale copper mining


Analysis of the projects by date shows that 20% of the investment with a higher probability of

materialization is already being implemented and 78.9% will be materialized within the next five

years, leaving a remnant of 1.1% for implementation after 2023.


37


Appendices


38


APPENDIX 1: Methodology

The methodology used to prepare this report is based on the following criteria:

1. Coverage

The survey covers investments for the purpose of production (replacement or expansion of

production or new projects) envisaged by Codelco and large and medium-scale private companies

in the metallic and non-metallic mining sectors, excluding energy minerals. Only those projects

representing an investment of more than US$70 million are included. The portfolio includes projects

under implementation and those that companies are studying with a declared intention of starting

their implementation within the next five years.

For the purposes of the annual distribution of each project’s estimated investment, the sum of the

investments already materialized from the beginning of the project through to the end of the year

prior to this report is included under the concept of “Before xxxx”, where “xxxx” is the year of the

report’s publication. The estimated investment for each of the years of the next five-year period is

then indicated. In the case of projects that will start operation after the end of the five-year period,

investment through to their start-up is presented as “Investment after xxxx”, where “xxxx” is the

year subsequent to the last year of the current five-year period.

The information presented in this report is the best-known approximation to the evolution of the

projects considered. In some cases, in the absence of public information, the annual distribution of

the investment is the authors’ estimate and it does not represents a commitment on the part of the

project’s owners.

Information about the projects includes an estimate of the metal production they would contribute,

where appropriate, as well as an indication of the projects’ current status.

2. Attributes of projects and condition of materialization

The reliability of the information presented depends on the quantity and quality of information

available about the projects which, in turn, depends on their attributes at the time of carrying out

the survey.

2.1. Condition of materialization

Each of the attributes is of a gradual nature that can be associated with greater or lesser certainty

and, together, they provide an idea of the likelihood of a project’s materialization, defined as base,

probable, possible or potential, according to the specific attributes set out in Table 20.


39


Table 20: Conditions of materialization of a project

Condition Type of project Stage of advance Environmental permit Start-up

BASE Any Implementation RCA approved Within the period

PROBABLE

Any Implementation suspended

RCA approved or before courts

Within the period

Any Feasibility RCA approved Within the period

Replacement or expansion

Feasibility EIA or DIA submitted to SEA

Within the period

POSSIBLE


Feasibility suspended EIA or DIA submitted to SEA

Within the period


Feasibility EIA or DIA not submitted Within the period

New Feasibility EIA or DIA submitted to SEA or not submitted

Within the period

Any Feasibility RCA approved After the period


Feasibility EIA or DIA submitted to SEA or not submitted

After the period

POTENTIAL

Any Feasibility suspended Any After the period

New Feasibility EIA or DIA submitted to SEA or not submitted

After the period

Any Prefeasibility Any Any


In Table 20, “within the period” indicates that a project will be materialized in 2019-2023 and “after

the period” that it would be materialized in the subsequent five years or, in other words, 2024-2028.

A project’s attributes are related to its type, stage of advance, its situation as regards environmental

permits and its estimated start-up date, which are defined as explained below:

2.2. Type of project

This attribute provides information about the degree of certainty of a project’s materialization since

it is related to the company’s strategic purpose and the project’s complexity. The types of project

are:

a) Replacement project. These are brownfield projects in which the objective is to maintain the production capacity of an existing operation by developing new areas of it as a means of addressing a drop in ore grades and/or the exhaustion of sectors already being extracted. These projects extend the useful life of a mine and its installations.

b) Expansion project. These brownfield projects seek to increase a mine’s operational capacity in order to raise its scale of production and reduce unit costs, particularly in the face of a drop in ore grades.

c) New projects. These greenfield projects involve the construction of a new mine, with the need to obtain environmental and sector permits, develop infrastructure and establish the


40


company in a new location. This category also includes brownfield projects at existing operations if they imply a complete change of process (for example, from leaching to concentration) since, in this case, they are virtually equivalent to the development of a new mine.

2.3. Stage of advance

As a project advances, certainty about its materialization also increases. Projects are, therefore,

classified in this report according to their stage of advance:

a) Implementation. In these projects, the investment has been approved and the necessary permits have been obtained and they have reached a phase between detailed engineering, construction and ramp-up.

b) Feasibility study. This category includes those projects at a stage between having begun to prepare feasibility studies and submissions for environmental permits - an Environmental Impact Assessment Study (EIA) or an Environmental Impact Assessment Declaration (DIA) - and having completed this stage, but without a final decision on the investment having been taken.

c) Prefeasibility study. Projects included in this category are at a stage between the start of prefeasibility studies and a decision to move on to the next stage.

Most projects follow their normal course, barring the modifications that may be introduced.

However, a project may also be suspended for reasons related or not to the company decision. In

some cases, a project that has been suspended may have to return to an earlier stage to repeat

studies in order to resolve questions raised from within the company or externally.

2.4. Environmental permits proceedings

All projects must obtain a Resolution of Environmental Approval (RCA) from the Environmental

Evaluation Service (SEA). This is awarded only after an exhaustive technical-administrative process

that involves stakeholders’ participation and during which the project’s Environmental Impact

Assessment Study (EIA) or Environmental Impact Assessment Declaration (DIA) is analyzed.

In this study, projects are classified in three stages from greater to lesser certainty:

a) RCA approved b) EIA or DIA submitted c) EIA or DIA not submitted.

2.5. Start-up date

The reliability of the information about a project also increases as its start-up date approaches. The

following timeframes are used, from greater to lesser certainty:

a) Within the period: Date within the period of analysis or, in other words, within the five-year period;


41


b) Long term: Date after the period of analysis or, in other words, outside the five-year period.

3. Investment by Codelco and sources of information

The information presented for Codelco’s projects is based on publications from the company’s

website and/or in presentations by its authorities, complemented predominantly by the data

included in its Business and Development Plan and other official company reports. It should be

understood only as a forecasting tool and in no way represents a commitment on the part of the

public bodies that will intervene in the evaluation of the investment projects that may or may not

be included in this forecast.

Codelco’s investments included in the portfolio are those envisaged in the company’s 2018 Business

and Development Plan (PND 2018), justified as development projects or in order to increase the

information required for future developments.

Development projects are directly related to the future production capacity of Codelco’s different

divisions and must comply with the corresponding profitability norms for their approval. They

include:

a) Structural projects. These development projects are designed to allow the company to take full advantage of its mineral resources and as the foundations for the company’s long-term development. This report provides explicit information about the characteristics of each of these projects and the investment involved in their implementation stage.

b) Other development projects. Codelco’s investment portfolio includes a number of projects with shorter-term objectives whose implementation is essential for the operational continuity of its divisions, complementing the company’s plans for its structural projects. This report provides an overall investment figure for this group of projects.

c) Information projects. The purpose of these projects is to obtain new information that is relevant to the company’s development. They are, however, not identified as individual projects. This category includes studies for future development projects (prefeasibility, feasibility, environmental impact assessment studies, etc.) and investment in basic and generative exploration and R&D. Given the diversity of objectives involved, only an overall figure for investment in these projects is provided.

d) Smelting and Refining Area (FURE) projects. These projects involve environmental and operational improvements at Codelco’s smelting-refinery complexes in order to comply with new environmental regulation in force as from 2018.

e) Tailings dams. This category comprises projects to improve the infrastructure of the tailings dams of Codelco’s different divisions.

The projects considered in this report do not include investments in the 2018 Business and

Development Plan that have other objectives such as the replacement of equipment, the repair of

installations and projects related to decontamination, workplace safety and welfare, although they


42


also require an Investment Project Report (API) for their implementation. They are excluded for the

sake of comparability with private mining companies for which information of this type is not

available.

The investments that do not require an API are also excluded from the scope of this report. However,

Codelco’s investments in companies to build metallurgical plants for processing byproducts as a

means of obtaining end products of greater value are included. In the portfolio, these do not appear

as part of Codelco’s investments, but as “Metallurgical Plants” in copper mining.

4. Private-sector investment and sources of information

Information about the projects of private mining companies is gather mostly from the

announcements they do through different media systems, such as their own websites, newspapers,

articles in specialized magazines, and their submissions to the Environmental Assessment Service

(SEA).

The portfolio includes all those projects already under construction. In the case of projects still being

studied, their stage of advance was reviewed and the estimated investment, start-up date and

estimated output were updated in light of the most recent public information available.

This implies at least the following updates:

a) Identification of owners as a result of a change of ownership

b) Production capacity and types of product

c) Amount of investment, start-up date and timeline for implementation

d) Inclusion of new projects

e) Elimination of projects that have recently started operation

f) New requirements such as the use of seawater, either directly or through desalination.

In the case of the amount of the investment, it is assumed that this corresponds mainly to the

implementation stage, without ruling out that some projects may include earlier investments during

their study phases.

Given that generally only an overall investment figure and the expected start-up date are known,

the annual distribution of the investment is estimated assuming a tentative timeline for a project’s

development, based essentially on presentations to the Environmental Evaluation Service (SEA) or

empirical estimates of timelines for similar projects.

In the case of projects for which a precise start-up date is not available in public information,

COCHILCO estimates this on the basis of the information available. This does not imply any

commitment on the part of the company in question.


43


5. Methodological criteria for estimating start-up date

Different internal and/or external circumstances can affect a project’s development. External

factors include the need to secure electricity supply at less than current prices, to improve the

project’s environmental impact assessment study and/or obtain permits for the construction of the

necessary infrastructure.

Internal factors include the project’s alignment with the company’s overall strategy, securing

financing, the need to improve the cost indicators for the investment and/or operation as

determined by the project’s engineering studies.

In the absence of public information about a project’s start-up date, COCHILCO applies the following

methodological criteria:

a) A year’s delay is incorporated if a project is affected only by external factors,

notwithstanding the possibility that the company reviews a project’s feasibility study in

order to resolve pending issues, which could imply minor modifications to the study.

b) A delay of two years is incorporated if a reformulation of a project’s prefeasibility or

feasibility study is required since this is the time typically required for studies of this type.

If the information is insufficient to estimate a clear start-up date, the project is excluded from the

portfolio as a “project under restructuring”.


44


APPENDIX 2: Description of investment projects in copper mining

1. State copper mining

1.1. Codelco structural projects - www.codelco.cl

Condition Type of project Stage of advance Environ. permit Start-up

POSSIBLE New Feasibility EIA approved 2026

RT SULFIDES PHASE II

(Radomiro Tomic Div.)

Reserves: 2,800 Mt @ 0.51% Cu

Treatment capacity: 115 ktpd of sulfidemineral

Estimated investment: MMUS$3,073

Use of seawater: Supply through Codelco'sNorth District Desalination Plant, due to becompleted in 2021.

Job creation: 12,100 jobs in constructionstage and 2,200 when operational.

Current status: Redesign of project as a single115-ktpd module, instead of two 100-ktpdmodules.

http://www.codelco.cl/


45


Condition Type of project Stage of advance Environ. permit

Start-up

BASE Replacement Implementation EIA approved 2023


POTENTIAL Expansion Prefeasibility Without EIA 2026

NEW MINE LEVEL

(El Teniente Div.)

Reserves: 2,020 Mt @ 0.86% Cu @ 0.022 Mo



Use of seawater: Not applicable.

Job creation: 2,400 jobs in construction stageand 2,650 when operational.

Current status: Start of Recursos Norteproject in 2020, with production of 30 ktpdwhen in full operation. Start-up of New MineLevel project in 2023.

ANDINA EXPANSION

(Andina Div.)

Resources: 22,271 Mt @ 0.62% Cu

Treatment capacity: 56 ktpd of sulfidemineral in addition to current 94 ktpd



Job creation: Information not available.

Current status: Awaiting start of feasibilitystudy scheduled for 2018. Delayed until 2026to continue studies of best way to takeadvantage of project's resources.


46



BASE Replacement Implementation EIA approved 2021

MINE-PLANT TRANSPORT

(Andina Div.)

Resources: Not applicable.

Treatment capacity: Not applicable.



Job creation: Average of 200 in constructionstage and of 60 when operational.

Current status: Excavations for the secondarycrusher completed in 2019. Energization ofthe electricity substations started.


47



PROBABLE Expansion Feasibility EIA submitted 2021

RAJO INCA

(Salvador Div.)





Job creation: Approximately 2,000 inconstruction stage and 400 when operational.

Current status: Feasibility study completedand early work underway.



2. Large-scale private copper mining

2.1. Anglo American - https://chile.angloamerican.com/


PROBABLE Replacement Feasibility EIA submitted 2022

LOS BRONCES INTEGRADO

(Anglo American Sur)


Treatment capacity: 180 ktpd of copperconcentrate


Use of seawater: Not envisaged; waterrecovery rate of 70-80%.

Job creation: 2,850 jobs at peak ofconstruction stage and 2,000 whenoperational.

Current status: Project includes operationalcontinuity of the concentrator.

https://chile.angloamerican.com/



2.2. Antofagasta Minerals - www.antofagasta.co.uk


PROBABLE New Feasibility EIA approved 2024

CENTINELA DISTRICT DEVELOPMENT -ENCUENTRO SULFIDES AND ESPERANZA SUR

(Minera Centinela)

Resources: 3,178 Mt @ 0.38% Cu; 0.011%Mo; 0.12 gpt Au (sulfides); 308 Mt @ 0.38%Cu (oxides)



Use of seawater: From the exising Esperanzaplant.


Current status: Project includes operational continuity of oxides line.

http://www.antofagasta.co.uk/




BASE Expansion Implementation EIA approved 2021

POSSIBLE Expansion Feasibility Without EIA 2023

LOS PELAMBRES MARGINAL EXPANSION -PHASES I AND II

(Minera Los Pelambres)

Resources: 4,831 Mt @ 0.48% Cu; 0.015%Mo; 0.057 gpt Au

Treatment capacity: +20 ktpd in Phase I and+15 ktpd in Phase II of sulfide mineral

Estimated investment: MMUS$1,300 inPhase I and MMUS$500 in Phase II(estimated)

Use of seawater: 450-l/s desalination plantand pumping system.

Job creation: 2,300 jobs in construction stageand 241 when operational.

Current status: Update of investment forPhase I underway. Desalination plant withinvestment of approximately MMUS$520.




PROBABLE Replacement Feasibility EIA submitted 2022

ZALDÍVAR OPERATIONAL CONTINUITY

(Cía. Minera Zaldívar)

Resources: 613 Mt @ 0.48% Cu

Extraction capacity: 260 ktpd

Estimated investment: MMUS$100

Use of seawater: Does not use.

Job creation: 500 jobs (peak) in constructionstage and 1,700 when operational.

Current staus: EIA submitted in June 2018,with view to extending life of mine to 2031.



2.3. BHP - www.bhp.com


BASE New Implementation EIA approved 2021

SPENCE GROWTH OPTION

(Pampa Norte)

Resources: 2,440 Mt @ 0.43% Cu; 0.012% Mo

Treatment capacity: 95-100 ktpd of sulfidemineralEstimated investment: MMUS$3,260(includes MMUS$800 for desalination plant)

Use of seawater: 800-l/s desalination plant,expandable to 1,600 l/s.

Job creation: 1,380 and 1,550 jobs inconstruction stage and 26 and 220 whenoperational for desalination plant and mine,respectively.

Current staus: Under construction, with start-up scheduled for mid-2021.

http://www.bhpbilliton.com/



2.4. Capstone Mining - www.capstonemining.com



SANTO DOMINGO

(Santo Domingo SCM)

Resources: 584 Mt @ 0.29% Cu; 25.6% Fe;0.023% Co

Treatment capacity: 64 ktpd

Estimated investment: MMUS$1,700 (to beupdated)

Use of seawater: 12.5-l/s desalination plant(2.5 l/s for washing concentrate andconsumption of workforce and 10 l/s forDiego de Almagro community) and 112-kmpipeline with nominal flow of 389 l/s.


Current status: Closing potential associationwith third parties for project's development,which would imply update of amount ofinvestment.

.

http://www.capstonemining.com/



2.5. Doña Inés de Collahuasi - www.collahuasi.cl


PROBABLE Expansion Feasibility EIA approved 2022

COMPLEMENTARY INSTALLATIONS TO 170 KTPDCOLLAHUASI

(Cía. Minera Doña Inés de Collahuasi)

Resources: 6,630 Mt @ 0.72% Cu; 0.011%Mo



Use of seawater: Not envisaged.

Job creation: 599 jobs in constructionstage; no change in current workforcewhen operational.

.Current status: EIA submitted inSeptember 2017 and approved atbeginning of 2018. Seeking additionalpermits with view to starting definitiveconstruction by end-2018 at latest.

http://www.collahuasi.cl/




POSSIBLE Expansion Feasibility EIA submitted 2025

IMPROVEMENT IN PRODUCTION CAPACITY 210 KTPDCOLLAHUASI

(Cía. Minera Doña Inés de Collahuasi)

Resources: 6,630 Mt @ 0.72% Cu; 0.011%MoTreatment capacity: 40 ktpd


Use of seawater: 525 l/s in first phase,rising to 1,050 l/s as from eighth year ofoperation.

Job creation: 960-4,500 jobs inconstruction stage and 7,205-7,990 whenoperational.

Current status: EIA submitted in January2019; request for clarifications received inMay 2019 and, in October, companyrequested extension of deadline forreplying to end-December 2019.



2.6. Freeport McMoRan - www.fcx.com


POTENTIAL New Feasibility Without EIA 2026

EL ABRA CONCENTRATORFORMERLY EL ABRA MILL

(CCM El Abra)

Resources: 1,999 Mt @ 0.45% Cu; 0.020 gptAu; 0.010% Mo; 1.4 gpt Ag



Use of seawater: Envisages a desalinationproject of approximately 800 l/s andpumping system.

Job creation: Approximately 4,000 jobs inconstruction stage and 1,200 whenoperational.

Current status: The company is currently inthe process of socialization of project andpreparation of environmental baseline;both the investment and start-up date areestimated based on previous informationfor the project.



2.7. Goldcorp/Teck - www.nuevaunion.cl



POTENTIAL New Feasibility Without EIA 2027*

(*) Corresponds to start-up of Phase II of the project; Phase III would be implemented gradually through to 2041.

NUEVAUNIÓN

PHASES I, II AND III

(NuevaUnión SpA)

Resources: 1,481.6 Mt @ 0.388% Cu; 0.171gpt Au; 0.009% Mo

Treatment capacity: 104 ktpd (Phase I), 12ktpd (Phase II) and 92 ktpd (Phase III) ofsulfide mineral

Estimated investment: MMUS$3,500 (PhaseI); MMUS$3,700 (Phases II and III)

Use of seawater: Envisages a seawaterdesalination project of around 700 l/s andpumping system.


Current status: Starting feasibility study inmid-September 2018; currently preparing theenvironmental baseline for the 3 phases forsubmission of EIA in the medium term. Inmid-2019, the company indicated that EIAwould not be submitted before end-2019.



2.8. KGHM - www.sgscm.cl


PROBABLE Expansion Feasibility EIA approved 2022

SIERRA GORDA EXPANSION 230 KTPD

(Sierra Gorda SCM)

Resources: 1,607 Mt @ 0.40% Cu; 0.060 gptAu; 0.020% Mo

Treatment capacity: +40 ktpd


Use of seawater: Maintains current supply ofseawater and desalinated water.


Current status: The project not only seeks toexpand the approved capacity of the originalversion (190 ktpd) and process oxidizedresources in stock (additional 55 kt fine Cu),but also to adjust operation of the tailingsstorage facility to ensure its environmentalsustainability as well as its stability andoperational continuity and to change thedestination of transport of part or all of theconcentrate to Mejillones Bay. EIA approvedat end of August 2018 with officialcommunication to the company pending.

.



2.9. Mantos Copper





MANTOVERDE

DEVELOPMENT


Treatment capacity: 35.6 ktpd of sulfidemineral


Use of seawater: Envisages increase of 260 l/sin consumption from existing desalinationplant (current capacity of 380 l/s andconsumption of 120 l/s).


Current status: EIA approved in mid-2018 andproject poised to start construction.

MANTOS BLANCOS

CONCENTRATOR DEBOTTLENECKING

Resources: 456.7 Mt @ 0.53% Cu

Treatment capacity: +8 ktpd of sulfidemineral



Job creation: 566 in construction stage and106 when operational.

Current status: EIA approved andconstruction underway to start ramp-up atend-2019/early 2020.



2.10. Teck - www.teck.com



QUEBRADA BLANCA PHASE II - HYPOGENE PROJECT

(Cía. Minera Teck Quebrada Blanca)

Resources: 1,324 Mt @ 0.38% Cu; 0.016% Mo

Treatment capacity: 135 ktpd of sulfides


Use of seawater: Envisages a seawaterdesalination plant in Punta Patache Port, witha pumping system with a 170-km pipeline andestimated flow of 1,300 l/s.

Job creation: Average of 7,000 and maximumof 9,200 jobs in construction stage andaverage of 1,787 and maximum of 2,053when operational.

Current status: EIA approved at end-July 2018and the company estimated that investmentdecision would be taken and constructionbegin at end-November 2018, with start-up inmid-2022.

http://www.teck.com/



3. Medium-scale copper mining

3.1. Central Asia Metals plc - www.centralasiametals.com


PROBABLE New Feasibility EIA submitted 2023

PLAYA VERDE

(Copper Bay Chile)

Resources: 53.4 Mt @ 0.24% Cu

Treatment capacity: 13.5 ktpd


Use of seawater: Use of seawater fromdredging of tailings and a 12.5-l/s reverseosmosis plant.

Job creation: Maximum of 317 jobs inconstruction stage and of 96 whenoperational.

Current status: The project consists indredging to remove old tailings from thePlaya Grande beach in Chañaral, processingthem in a metallurgical plant to extractcopper and produce cathodes andconcentrate (7.08 ktpy and 1.56 ktpy,respectively), and restore the beach damagedby landslides and the deposit of tailings formore than 40 years.



3.2. COPEC - www.empresascopec.cl



DIEGO DE ALMAGRO

(Cía. Minera Sierra Norte)


Treatment capacity: 24 ktpd of sulphidemineral and 2 ktpd of oxide mineral


Use of seawater: Desalination plant locatednear the concentrator, with a flow of 1,865m3/day, to supply desalinated water for minorprocesses; most consumption will be in theform of raw seawater.

Job creation: Maximum of 595 jobs inconstruction stage and of 178 whenoperational.

.Current status: Reactivation of the project atthe beginning of 2018 suggests start-up inaround 2020.

http://www.empresascopec.cl/



3.3. Hot Chili - www.hotchili.net.au


POTENTIAL New Prefeasibility Without EIA 2022

PRODUCTORA

(Soc. Minera El Águila)

Resources: 288 Mt @ 0.26% Cu; 0.057 gpt Au;0.007% Mo





Current status: Ongoing explorations toupdate resources.

http://www.hotchili.net.au/



3.4. Pucobre - www.pucobre.cl


POSSIBLE New Feasibility EIA approved 2024

EL ESPINO Resources: 230.3 Mt @ 0.45% Cu; 0.191 gptAu





Current status: Engineeering studies beingupdated, ruling out the oxides line for themoment.

http://www.pucobre.cl/



4. Metallurgical plants

4.1. Ecometales - www.ecometales.cl



LEACHING OF CONCENTRATE


Treatment capacity: 200 ktpy of concentrate



Job creation: 378 jobs in construction stageand 120 when operational.

Current status: Construction of a high-pressure copper concentrate leaching plant toremove impurities, principally arsenic, andgenerate stable waste; project awaitinginvestment decision after obtaining RCA atbeginning of August 2017.



4.2. ENAMI – www.enami.cl


POSSIBLE Expansion Feasibility Without EIA 2023

NUEVA PAIPOTE -Stages 1 and 2

(Hernán Videla Lira Smelter)


Treatment capacity: 200 ktpy of concentrate




Current status: The project to modernize thesmelter has been divided into two stages.Stage one corresponds to a transition projectto comply with Supreme Decree 28 and isdesigned to cover the period between 2018and 2021, the estimated start-up date ofStage two. The principal modernizationproject (Stage two) consists in theimplementation of Chinese BBR-BCC fusion-conversion technology. ENAMI is currentlyanalyzing Stage two without having taken theinvestment decision.



APPENDIX 3: Description of investment projects in gold and silver mining

1. Rio2 Limited - www.rio2.com


POSSIBLE New Feasibility Without EIA 2023

FENIX (Ex-CERRO MARICUNGA)

Resources: 252 Mt @ 0.434 gpt Au

Treatment capacity: 20 ktpd of oxide mineralfor cyanidation




Current status: Project owner was acquiredby Rio2, which would accelerate the project'sdevelopment. Size of the project has droppedto production of 2.5 tons of gold.

http://www.rio2.com/



2. Gold Fields – www.goldfields.com


POSSIBLE New Feasibility EIA submitted 2021

SALARES NORTE Resources: 25.6 Mt @ 4.76 gpt Au; 53.1 gpt Ag

Treatment capacity: 5.5 ktpd of oxide mineralfor cyanidation




Current status: Estimated start of constructionin 2020.



3. Kingsgate Consolidated Ltd. - www.kingsgate.com.au



NUEVA ESPERANZA -ARQUEROS

Resources: 39.4 Mt @ 0.39 gpt Au; 66 gpt Ag





Current status: EIA submitted in July 2018,which would replace DIA submitted in July2017 on which no decision issued. The EIA,entitled "Update of Arqueros", seeks tointegrate the Chimberos and Teteritadeposits, along with modifications to wastedump, mineral stockpiling areas, camps,location of primary crusher and conveyorbelts and processing plant and technologicalchange in disposal of the leaching gravel,using filtering rather than thickeners. Theamount of the investment remainsunchanged.

http://www.kingsgate.com.au/



4. Kinross - www.kinross.com


PROBABLE Replacement Feasibility EIA approved 2023

LA COIPA PHASE 7

Resources: 17.28 Mt @ 1.85 gpt Au; 59.15 gpt Ag





Current status: Pompeya and Catalina depositsunder analysis, apart from so-called Purén 2. Atpresent, working on feasibility study scheduledfor completion in mid-2019 before startingconstruction once the investment cost hasbeen updated and approved by investors. Inparallel, start of studies for reactivation of LoboMarte once useful life of La Coipa Phase 7 endsin around 2030.

.

http://www.kinross.com/



5. Yamana Gold - yamana.com


PROBABLE Replacement Feasibility EIA approved 2020

EL PEÑÓN CONTINUITY

Resources: 19.55 Mt @ 2.12 gpt Au; 141.8 gpt Ag

Treatment capacity: 50.5 ktpm of material



Job creation: 9 jobs in construction stage, 305when operational and 25 for closure.

Current status: EIA approved and start of work(estimated February 2019).



APPENDIX 4: Description of investment projects in iron mining

1. Admiralty Resources



SOBERANA

(Ex-MARIPOSA)

Resources: 66.6 Mt @ 33.1% Fe

Treatment capacity: 5.6 ktpd of iron mineral




Current status: The project, which seeks tomine minerals and produce iron concentrateat a maximum rate of 771,000 tpy duringapproximately 18 years, including transport toPunta Totoralillo Port, was submitted to SEAin May 2017. Under construction with start-up in early 2021.



2. Andes Iron - www.conocedominga.cl



DOMINGA Resources: 2,082 Mt @ 23.3% FeT; 0.07% Cu

Treatment capacity: 95 ktpd of mineral


Use of seawater: 450-l/s desalination plant inTotoralillo Norte sector.

Job creation: 9,800 jobs in construction stage,1,450 when operational and 980 for closure.

Current status: This mining-port project wasrejected in appeal to Committee of Ministersand is currently planning to submit a new EIAso start-up not estimated to be before 2024.



APPENDIX 5: Description of investment projects in industrial minerals

1. Albemarle



LA NEGRA PLANT EXPANSION -PHASE 3

Resources: Information not available.

Treatment capacity: +42,7 ktpy of lithiumcarbonate




Current staus: Obtained environmentalapproval in July 2017 and under construction,with start-up scheduled for end-2021.



2. SQM S.A. - www.sqm.cl



SALAR DEL CARMEN

EXPANSION

(SQM Salar S.A.)


Treatment capacity: Lithium carbonate: +10ktpy (Phase I) and +12 ktpy (Phase II); lithiumhydroxide: +10 ktpy (Phase I) and two newplants of +8 ktpy (Phases II and III)




Current status: EIA approved andconstruction underway.

http://www.sqm.cl/





NUEVA VICTORIA - NEW IODINE PLANT

(SQM S.A.)


Production capacity: +6.5 ktpy of iodine



Job creation: 882 jobs (average) and 1,438 inconstruction stage; between 455 and 678when operational.

Current status: EIA submitted.





LITHIUM CARBONATE EXPANSION 180 KTPY

(SQM Salar S.A.)


Production capacity: +110 ktpy of lithiumcarbonate




Current status: EIA submitted and awaitingapproval. Project complements the Salar delCarmen Expansion project which already hasenvironmental approval and is underconstruction.



3. Minera Salar Blanco S.A.



BLANCO PROJECT


Production capacity: 20,000 tpy of lithiumcarbonate (Li2CO3) and 58,000 tpy ofpotassium chloride (KCl)


Use of seawater: Not evisaged.


Current status: Brine extraction at an averagerate of 209 l/s from wells that will be locatedin the northern part of the Maricunga SaltFlat, within MSB's mining properties. Thebrine will be transported through a pipelinewith a length of approximately 10 km to a setof solar evaporation ponds, which will belocated to the north of the Maricunga SaltFlat. Start-up scheduled for 2022.



4. SIMCO SpA



MARICUNGA SALTS PRODUCTION


Production capacity: 5,700 tons of lithiumcarbonate, 9,100 tons of lithium hydroxideand 38,900 tons of potassium chloride




Current status: Consists in the exploitation offresh brine from the northeast sector of theMaricunga Salt Flat at an extraction rate of275 l/s; processing of brine using solarevaporation and subsequent precipitation in alithium carbonate plant, using solventextraction to produce lithium hydroxide andpotassium chloride as a byproduct. Start-upscheduled for 2021.



APPENDIX 6: Units of measurement and abbreviations

Weight and measurement

g Gram

kg Kilogram

t Metric ton

kt Thousands of metric tons

Mt Millions of metric tons

oz Troy ounce

koz Thousands of troy ounces

Moz Millions of troy ounces

lb Pound

Mlb Millions of pounds

m Meter

km Kilometer

m2 Square meter

m3 Cubic meter

Chemical and mineral elements

Ag Silver

Au Gold

Cu Copper

Cu cath. Copper cathodes

Cu conc. Copper content in concentrate

CuEq Copper equivalent

Fe Iron

Fsp Feldspar

H3BO3 Boric acid

H2SO4 Sulfuric acid

KCl Potassium chloride

KNO3 Potassium nitrate

LiCl Lithium chloride

NaNO3 Sodium nitrate

Mo Molybdenum

TiO2 Titanium dioxide (rutile)

Concentrations and production rates

gpt Grams per ton

ppm Parts per million

oz/y Troy ounces per year

koz/y Thousands of troy ounces per year

Moz/y Millions of troy ounces per year

kg/y Kilograms per year

tph Metric tons per hour

tpd Metric tons per day

tpm Metric tons per month

tpy Metric tons per year

ktpy Thousands of metric tons per year

Mtpy Millions of metric tons per year

Processes and inputs

g/L Grams per liter

kg/L Kilograms per liter

l/s Liters per second

l/m Liters per month

kV Kilovolt

kVA Kilovolt-ampere

GWh Gigawatt-hour

MWh Megawatt-hour

Production processes

Flot Flotation

Lix Leaching

SX Solvent extraction

EW Electrowinning

Currencies and prices

US$ US dollar

MUS$ Thousands of US dollars

MMUS$ Millions of US dollars

US$/lb Dollars per pound

cUS$/lb Cents of the dollar per pound

US$/oz Dollars per troy ounce

Geographical abbreviations

m.a.s.l. Meters above sea level

UTM Universal Transversal Mercator

Types of company

Cía. Company

Inc. Incorporated

Int. International

Ltda. Limited

Ltd. Limited

S.A. Listed company

SCM Contractual mining society

CCM Contractual mining company

Others

Ind. Industrial

Min. Mineral

RCA Resolution of Environmental Approval

DIA Environmental Impact Declaration

EIA Environmental Impact Study

SAG Semi-autogenous

API Investment Project Report

PND Business and Development Plan


This report was prepared by the

Research and Public Policy Department

Cristian Cifuentes González

Strategy and Public Policy Analyst

Christian Sanhueza González

Strategy and Public Policy Analyst

Jorge Cantallopts Araya

Director of Research and Public Policy

November 2019

Documents

Investment in the Chilean mining industry Portfolio of ... › Research › 2019 12 16 Cartera... · of four of the 44 projects in the previous portfolio; and an increase of US$6,171