Open pit mining has begun at Xstrata's Mount Margaret mine in north west Queensland.
The mine is made up of the E1 and Monakoff copper tenements Xstrata acquired from Exco Resources last year.
At the time Xstrata said production from these deposits would make an “incremental contribution” to Ernest Henry’s production profile from the second half of 2012.
Ore mined from the $124 million project will be processed through Xstrata's existing Ernest Henry concentrator, with first ore production expected by the end of August.
Ernest Henry Mining's general manager Myles Johnston welcomed the commencement of operations.
"Mount Margaret will add around 30,000 tonnes of annual copper production to Ernest Henry over a five year period, strengthening the economics of the complex and taking immediate advantage of the available installed capacity of the concentrator and associated infrastructure," he said.
"In total, the project will add an additional 20 million tonnes of ore to our existing ore production profile throughout its five year life, producing around 140,000 tonnes of copper, 83,000 ounces of gold and 560,000 tonnes of magnetite in concentrate over that time. We also plan further exploration at Mount Margaret to identify any additional ore resources for future development."
Jonhston went on to say that the mine will create at around 300 full-time jobs in the region, in addition to the 330 construction jobs and 400 full-time jobs generated by the transition from open pit to underground mining and magnetite processing at Ernest Henry.
"We’ve already transitioned some employees from our previous open pit mining workforce at Ernest Henry to work on the project," he added.
Xstrata Copper North Queensland COO Steve de Kruijff said Mount Margaret demonstrates the miner's continuing commitment to the region, and follows on its decision to extend the life of the Ernest Henry mine.
"Our mining operations in the Cloncurry region are an important part of our integrated North Queensland business, which last year contributed almost AUD1.6 billion to the Queensland economy and employed nearly 4,000 people," de Kruijff said.
Mount Margaret is located eight kilometres east and 21 kilometres south rof Ernest Henry Mining.
It has a five year mine life with a combined resource of 52.1 million tonnes grading at 0.77 per cent copper and 0.23g/t gold.