Initial underground ore production has started at Xstrata Copper’s Ernest Henry mine in north west Queensland.
This announcement marks the move of the mine from an open cut into underground operation.
It also extends the mine’s life until at least 2024.
In the first phases of underground work, around three million tonnes of ore will be trucked from the mine, generating 25 000 tonnes of copper and 35 000 ounces of gold
After commissioning of the underground shaft in 2013, production is planned to ramp up to six million tonnes per annum, generating 50 000 tonnes of copper and 70 000 ounces of gold.
This underground extension also marks the miner’s move into magnetite.
Ernest Henry’s general manger Myles Johnston said the new underground shaft and magnetite processing plant will create new jobs in the region.
"The project creates 330 jobs during the construction phase and 400 full-time jobs from 2013, extending the operations by at least another 12 years.
"An additional 100 full-time jobs are expected to be created from the development of our newly acquired Mount Margaret Mining Project, purchased from Exco Resources Limited earlier this year. If approved, this project will further add to the production profile of Ernest Henry from the second half of 2012."
Cloncurry shire mayor Andrew Daniels stated that the mine’s expansion will provide economic security for the region.
"Ernest Henry Mining is a major contributor to our shire. Extending the mine’s life by another 12 years has helped to provide job security for many people and will underpin the ongoing economic and social development in the shire," he said.
Steve de Kruijff, Xstrata Copper North Queensland’s COO, said this operation is a critical part of the miner’s business in the region.
"Ernest Henry Mining’s transition is part of our long term operational plan that will see significant investment in north Queensland to focus on exporting mineral concentrates, along with the development of necessary infrastructure to increase rail and port capacity," de Kruijff said.
This announcement comes as the miner is phasing out its copper smelting activities in the region.
Xstrata Mount Isa Mines will phase out copper smelting and refining operations in Townsville by the end of 2016.
The miner announced the move as part of its long term vision for its North Queensland operations.
Steve de Kruijff, Xstrata Copper NQ’s chief operating officer, said phasing out the copper smelting and refining operations in North Queensland and moving the focus to on the development of mining and copper concentrate was a response to changing global demand.
“Market conditions have been very challenging for copper smelting and refining operations due to over capacity in the global market, low treatment and refining charges and increasing operating costs.”
de Kruijff explained that copper smelting and refining operations have been under increasing pressure for a number of years and could not be sustained in the long term.
The Queensland Government has set up a taskforce to help workers affected by Xstrata shutting down its copper smelting and refinery works.