Xstrata approves $589 million facelift for Ernest Henry Mining

Xstrata Copper has approved a $589 million investment to transform its open-cut Ernest Henry Mining to an underground mine and become Queensland's first iron ore producer.

Xstrata Copper has approved a $589 million investment to transform its open-cut Ernest Henry Mining to an underground mine and become Queensland’s first iron ore producer.

Xstrata Copper yesterday approved a $589 million plan to transform its Ernest Henry Mining (EHM) operations in north-west Queensland from an open-cut mine to an underground mine.

The company will also build a magnetite extraction plant on-site, meaning it will become Queensland’s first iron ore producer.

According to Xstrata, the development will extend the lifespan of the mine, located near Cloncurry, to at least 2024.

The plan was approved after a series of studies lead to the mine’s ore reserves being revised to 72 million tonnes at a grade of 1% copper, 0.5 grams per tonne gold and 22% magnetite.

The company said this was a 600% increase on previously published underground reserves.

According to Xstrata Copper chief executive Charlie Sartain, the expansion is an important step towards sustaining the operations and will make a significant contribution to the State’s economy.

“This is the second of five brownfield projects Xstrata Copper is planning to move into the construction phase over the next nine months, following the approval of the Lomas Bayas extension project in October,” he said.

“Overall, these projects form an integral part of our near-term organic growth program, which will see total copper production increase by 60% to 1.5 million tonnes per annum by the end of 2014.”

The company’s north Queensland chief operating officer Steve de Kruijff said the project would provide 400 long term jobs at the EHM site.

“The operation is a critical part of Xstrata Copper’s integrated north Queensland operations,” he said.

“The project will ensure a sustainable future for our EHM operations and the continued supply of copper concentrate to our smelter in Mount Isa, which in turn supports our refining operations in Townsville.

“It will generate an additional 330 jobs during construction and 400 full-time jobs from 2013.

“This investment decision demonstrates our commitment to the future of north west Queensland as one of the premier mining regions of the world.”

Queensland Resources Council chief executive Michael Roche said the move was a vote of confidence in the future of the mining industry in the region.

“It is extremely exciting that the expansion will mean that Xstrata Copper will become Queensland’s first iron ore producer,” he said in a statement.

“The diversity of the resources sector in Queensland is a key to its resilience and why it continues to contribute so much to the State’s economy.”

The mine’s main underground shaft will be sunk to a depth of 1000 metres and will produce around six million tonnes per annum of ore at full capacity.

When processing from the open-cut operations ceases in 2012, the mine will be able produce 50,000 tonnes of copper and 70,000 ounces of gold in concentrates.

The EHM Concentrator, which won Minerals Processing Plant of the Year at last month’s Australian Mining Prospect Awards, will also be reconfigured to meet the underground mine production rate.

A separate extraction circuit will be installed to produce the magnetite concentrates at a rate of approximately 1.2 million tonnes per annum.

The project is awaiting final Queensland Government environmental approvals.

Construction is expected to get underway in the first half of 2010.

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