Mineral Exploration
In 2010, Codelco increased its brownfield exploration or the process of finding new ore bodies in the area within close proximity to ore deposits. The most significant results were obtained in the Andina District, with important deep-lying mineralised intersections, in the area known as Cerro Negro; and in El Teniente District, with good indication of copper mineralisation in two drilling areas.
Internationally, Codelco enhanced its exploration portfolio in Brazil; while in Ecuador, pursuant to the agreement with ENAMI EP, an Ecuadorian stateowned company, another exploration drilling with third-parties was included to the areas already under review, where prospecting will begin during the first half of 2011. The Company also continued to monitor and look for opportunities in other countries, especially in the Andean region.
Global investment in exploration grew – in response to high metal prices – totalling US$ 11.2 billion – a recovery of almost 50% compared to investments in 2009.
Exploration expenses in Chile also increased. It maintained its third position in Latin America and globally, it climbed one position, from seventh to sixth. Therefore, Chile regained the position it held in the 2008 ranking, when metal prices were also high. In 2010, Codelco invested US$ 27 million in exploration and 60% of this amount was in brownfield or district exploration in Chile.
In 2010, within the framework of Law 19,137, a strong boost was given to transferring mining properties to Enami, in 22 prospects located between the 1st and 6th Region. A total of 70,188 hectares was transferred, equivalent to 28% of the total 252,658 hectares transferred since 1993 to date.
Some of these properties contain mineralisation which could be of interest to small scale mining; while for Codelco it means reducing expenses because it does not have to pay mining taxes.
The most important result in sustainable development was to achieve by October, 33 months and 1,580,000 worked hours without disabling injuries in employees and contractors, including operations in Chile and abroad. In October a lost time accident occurred, with minor consequences for the injured employee. These results are in the context of the safety action plan launched in 2008, which aims to instil a preventive work culture and to have zero accidents in exploration activities.
Chile
The strategy to focus on brownfield exploration, which aims to add new reserves in the proximity of existing mine operations, concentrated most of the exploration drilling.
The most significant results were obtained in the Andina District, where important mineralised intersections of molybdenum and copper sulphide were found in a new zone known as Cerro Negro, located to the east below the area currently developed in the RÃo Blanco section of the underground mine.
Results suggest a mineralisation potential that may exceed the size and quality of what was found at La Americana sector in 2009; its resources were more than 850 Mt of medium grade, 0.6 %Cu and 0.02 %Mo.
In the Andina District, an attractive exploration portfolio was defined, that as of 2011 will be the centre of a surface and underground exploration drilling campaign, including geophysical and geological studies.
The exploration programme for El Teniente District reached mineralised intersections in two new areas drilled from the surface and underground operations. New drillings are scheduled for 2011 in order to confirm expected new resources in these areas, in an active brownfield exploration project boosted by the development of geological models and ideas which will be proven in 2011 and 2012.
In the exploration programme for Chuquicamata District, the Company explored new leachable mineral resources, finding interesting results in two areas, north of Radomiro Tomic mine.
Basic or greenfield exploration is included in Codelco’s development strategy, which has reported important findings, such as the Gabriela Mistral deposit mined since 2008. In 2010, new areas were created and programmes were strengthened that aim to find large mineralised porphyry both in the north and centre of Chile.
Initiatives to develop new knowledge on exploration models focused on the application, integration and implementation of methods designed between 2008 and 2009 to explore covered zones in Chile, between the 1st and 6th Region.
New studies included preliminary assessment of lithium brine contained in the salt flats with mining property owned by Codelco and conceptual studies for new water resources in underground aquifers.
Codelco has mining joint ventures with six companies. The different projects are: Pasaca, with Rio Tinto; Puntilla-Galenosa with Pucobre; Anillo with Fortune Valley Resources; Los Lobos with Hot Chili; Nueva Quebrada Valiente with Compañia Minera Mantos de Oro; and Cumbre with Antofagasta Minerals.
Brazil
In 2010, Codelco’s activities and exploration portfolio in Brazil increased as a result of work focused on finding and assessing new opportunities in property with potential to contain large mineralised bodies required by Codelco, in the well known Carajas mining district, State of Para; and also in the state of Rio Grande do Sul, Goiás and Mato Grosso.
Additionally, joint ventures were entered into with Xstrata and Pan Brasil, in the Caraja mining district, that include five mining property groups. Test drilling began towards the end of 2010 and exploration is scheduled to be completed during 2011.
Ecuador
In 2010, the Company continued prospecting in the framework of the ENAMI EP agreement, legal successor for this purpose of Ecuador’s Ministry of Mining and Petroleum, this enables Codelco to have access to an important number of areas of interest and maintain an active portfolio of prospects under consideration.
At the same time, contact with the private sector was stepped up, which ensured a lease-purchase agreement in El Palmar prospect, located 80 km north of Quito. In 2011, the initial exploration drilling will begin, once it has the environmental permit, required before carrying out any drilling.
