San Jorge: Argentina's first copper mining project advances

While on the other side of the Andes, in Chile, some 6 million tons of copper are produced annually, this mineral is not yet being extracted in Argentina , although there are five large projects in the country with a certain degree of progress: El Pachón, Los Azules, Josemaría, Taca Taca, and MARA. PSJ Cobre Mendocino , on the other hand, is medium-sized, but could be the first in the country to begin the mining phase (and the first metalliferous project in Mendoza).

The company, formed by the Swiss company Zonda Metals GmbH and the Argentine company Alberdi Energy, estimates that they could obtain the Environmental Impact Statement this year. The mining company submitted the Environmental Impact Report in January, and the document was analyzed by interdisciplinary teams from the National University of Cuyo Foundation (FUNC) and the Mining and Environmental Management and Oversight departments.

The PSJ received the recommendations indicated and submitted an expanded report to address these requests. Based on this, the Mining Environmental Authority forwarded the file to fifteen agencies—including the Municipality of Las Heras, the General Department of Irrigation, the Hydraulics Directorate, the Argentine Institute for Arid Zone Research (Iadiza), and the Argentine Geological and Mining Service (Segemar)—for analysis of the aspects within their jurisdiction.

The next planned stage in the process will be for the provincial executive branch to issue the EIA—following a public hearing—for subsequent submission to the legislature for ratification.

Once the project has the permits, it is estimated that it will take a year to complete the final economic and financial feasibility study, which will provide greater certainty regarding all processes, accompanied by detailed engineering. Only then will construction of the processing plant and other facilities begin, with an estimated timeframe of 18 to 24 months and an estimated investment of US$559 million.

In parallel, work will begin on removing the surface of San Jorge Hill, where copper oxide is found. It cannot be used because its extraction requires the use of sulfuric acid, which is prohibited by Law 7,722.

Fabián Gregorio, CEO of PSJ Cobre Mendocino , explained that they estimate there are approximately 40 million tons of oxidized ore, which will be left in one of the three planned waste dumps, since, under current conditions, transporting it for treatment elsewhere is not profitable.

The enriched primary sulfides, which can be exploited, are found at a depth of 60 meters, and the deposit is located at about 100 meters—almost at the base of the hill. At this level, the "open pit" will be located, measuring 900 meters long by 400 meters wide. From there, the material resulting from the planned daily detonation will be extracted and transported to the processing plant.

Estimated production is approximately 40,000 tons of fine copper per year, which will be obtained through a flotation process, with an initial useful life of 16 years, with the possibility of extending to 27 years. OPEX, or operating costs, are estimated at approximately US$120 million per year, and the plant will require approximately 600 workers, in addition to approximately 1,800 indirect employees.

During the full operating cycle, PSJ will contribute more than US$1.315 billion in tax revenue (provincial and national), including taxes, fees, and royalties.

Gregorio commented that they are optimistic about extending this initial mine life estimate because the latest indicators from the exploration, which concluded in 2016, were very favorable. Therefore, once they begin the extraction phase, they plan to resume exploration of the area.

He emphasized that the PSJ Cobre Mendocino project is part of the National Copper Roundtable and, although it is the smallest in that space, it has the potential to be completed sooner due to its size, mining method, and accessibility. Furthermore, it will be the first mining project in the province to join the RIGI (Large Investment Incentive Scheme).

The original operating proposal, presented in 2008, has been reformulated since the 15 years since, as new technologies have emerged, allowing for the optimization of processes and the implementation of additional controls. Furthermore, it must meet new international quality standards.

The company is in advanced talks with refineries and smelters in Europe, as well as with international financing agencies, to secure funding for the construction of the facilities. The mining company has already invested approximately US$62 million in exploration drilling and engineering studies, but nearly US$560 million is needed to reach the operational phase.

They emphasized that the high global demand for this mineral, essential for the energy transition and currently priced at nearly US$10,000 per ton, allows buyers to choose. Furthermore, compliance with responsible copper production standards adds value to the product.

"The 'off-takers,' who take over the supply, are required to be responsible for the origin of the copper. And international financing agencies demand environmental parameters that are often higher than those established by the nation and the provinces. Therefore, early adaptation to these international standards has been a necessity and an obligation we have assumed," Gregorio emphasized.