Grupo Mexico Develops World Class Copper Deposit

Mon, 10/21/2013 - 17:24

EL Arco is one of the most promising projects in Mexico, since it is on course to becoming one of the largest copper mines in the Americas. The project is located in the mining district of El Arco-Calmalli, very close to the border between Baja California Norte and Baja California Sur. This mining district has been explored and exploited since the 1970s, but it was not until Grupo Mexico came in with its team of geologists and modern exploration methods that the true dimensions of the property’s value were realized. The copper-gold ore deposits were evaluated during Grupo Mexico’s ambitious drilling program, which lasted from 2005 to 2006. After the feasibility study was concluded in 2010, an investment of US$56.4 million was approved for land acquisition required for the project, which is still ongoing in 2013. In order to be moved into production this world class copper deposit – with ore reserves of over 1.5 billion tonnes with an ore grade of 0.416% and 0.14 grams of gold per tonne – will require an investment of US$2.6 billion in the first three years. Once the project is moved onto production it will generate a turnover of US$2 billion per year, for a period of at least 25 years. The project will consist of an open pit mine and will exploit copper and gold, with molybdenum as a byproduct. The mine is forecasted to produce 190,000 tonnes of copper cathodes, 105,000oz of gold and 1,500 tonnes of molybdenum per year. El Arco is destined to employ 10,000 people directly and indirectly throughout the lifecycle of the mine. The Economy Ministry of Baja California is working together with local government agencies to move this megaproject forward, since it will bring economic development opportunities to one of the most remote regions of the peninsula, and there will be important knock-on effects on the state’s economy. Once the mine is constructed it is believed that the surrounding municipalities may grow by up to 700%, with all of them merging into one big city of at least 30,000 habitants. One of the main challenges the company will have to overcome will be managing its water supply, since the mine is located in a very dry area where evaporation rates are considerable. The operation will require over 800 liters of water per second, which is more than the 725 liters that the city of Ensenada currently consumes. In order to satisfy the needs of the operation Grupo Mexico intends to build a desalination plant near the coast and to use water from El Vizcaíno basin. The company has also considered the possibility of installing an electrical plant, since the operation will require a supply of 180MW. According to the Energy Ministry the cost of this electrical plant would be US$150 million and it will have to be built by private contractors. The negotiation states that after 30 years Grupo Mexico would own the rights over the electrical infrastructure.