EXECUTIVE SUMMARY

this month ’ s series :

The mine
Antamina’s modern history began in
1996, when Canadian Rio Algom
acquired the deposit as part of the
privatization process executed by
the Peruvian government. Antamina
began operations in late 2001. Its
current shareholders are BHP Billiton,
Xstrata Copper, Teck Resources and
Mitsubishi Corp.
The operation
Antamina is the largest mine in Peru.
Its concentrator is designed to process
70,000 tonnes of ore per day, but
thanks to various optimizations it
currently handles 94,000t/d. The
mine produces copper, zinc and
molybdenum concentrates, as well
as silver as a byproduct.
The expansion
The Antamina expansion project will
take ore treatment capacity at the
concentrator to 130,000t/d and
contemplates a significant increase
in mining equipment, the installation
of a new SAG mill and other
investments.
Taxes
Antamina has chosen to make use
of tax benefits on reinvestment of
profits that exist under Peruvian
law, meaning it will pay less in
taxes during the construction period
of the expansion project. This has
been a source of debate in Peruvian
public opinion, but the company
emphasizes that once the expansion
is up and running it will generate
an additional US$1.9bn in taxes
over the rest of the mine life. The
government of Ancash region could
see its revenue from the mining
canon double.
Social license
The company has adopted a model
based on strategic partnerships with
NGOs, which, some experts say, has
been the turning point in the before
and after of community relations work.
March 2010
Antamina Expansion:
A case study
In November 2008, Compañía Minera billion. While many mining projects that
Antamina announced a significant increase were put on standby during 2009 because
in its mineral reserves at Antamina, the of the crisis are now being reactivated,
deposit the company has been mining since the Antamina expansion process has been
2001 in Ancash region some 400 kilometers different. According to CMA corporate
north of Lima, in Peru. affairs manager Gonzalo Quijandría, the
timing of the project reflects the time
The new calculation expanded reserves by taken to bring it to a development-ready
77% to a total of 745 million tonnes and stage rather than recent ups and downs of
was achieved though exploration work in metal prices.
the open pit and the use of a new geological
interpretation model. The company The project will expand production at the
dedicated the following months to studying mine by 38% and extend its life by at least
these results, and in early January this year six years. The expansion of Antamina is one
the company announced its decision to go of the flagship projects of Peru’s current
ahead with a major expansion. boom in mining investment, and it serves as
a case study in tax issues - the expansion
Antamina is one of the globe’s biggest mines. will be financed with profit reinvestment to
The initial investment in its development access benefits afforded by law, which has
amounted to US$2.3 billion, which is among generated some controversy in the country -
the heftiest investments in the history of and community relations. This report takes a
Peru. The expansion announced in January close look at the project itself and at these
will require additional expenditure of US$1.3 aspects of its development in particular.
Antamina expansion: Main mining equipment
Equipment Brand and model Quantity
Mining shovel P&H 4100XPC 3
Wheel loader Le Tourneau L2350 3
Wheel dozer CAT 854K 5
Electric drill rig Bucyrus 49HR 5
Off-highway mining truck CAT 793F 64
Track-type tractor CAT D11T 6
Mining motor grader CAT 24M 4
Excavator CAT 385CL 3
Explosion-proof truck Volvo VM42R 1
Surface-crawler drill rig Atlas Copco ROCL830 3
Off-highway truck CAT 785D 3
Source: Antamina

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 Written and researched by
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