The announcement follows the revision of the estimated project cost by Canadian mining company Teck Resources, which is also a stakeholder and operator of the project, to $6.9-7bn from the initial $4.7bn
Sumitomo Metal Mining and Sumitomo Corporation have increased their share of the cost estimate for the construction of the Quebrada Blanca phase 2 (QB2) copper project in Chile.
The cost estimate has been increased to around $7.5bn, which is nearly 60% higher than the initially approved $4.7bn and is primarily due to the impact of the Covid-19 pandemic.
The Canadian mining company Teck Resources, which also holds a 66.67% stake, is the operator and is responsible for the construction of the QB2 copper project.
Sumitomo’s announcement follows the revision of the estimated project cost by Teck.
In its recent Q2 financial results, Teck has revised its capital cost for the project to $6.9-7bn from the initial $4.7bn, based on the assumption foreign exchange rate.
QB2 is a two-phased open-pit mining operation, being developed in the Tarapacá Region, Republic of Chile, 1500km from Santiago, and 240km southeast of Iquique.
Alongside Teck, Japanese miner and smelter Sumitomo Metal owns a 27.77% stake, while Japanese trading house Sumitomo Corporation holds a 5.56% interest in the QB2.
The Canadian mining company started construction at QB2 in 2019 but was delayed due to an increase in construction expenses resulting from the impact of the Covid-19 pandemic.
The impacts include costs related to infection control, the extension of the construction period and a decline in construction efficiency due to Covid-19 infection in workers.
The QB2 Project is now focused on system completion and handover, with plans to start construction and first production expected by the end of this year, said Sumitomo.
The company said in its statement: “As a result of a review of the resource assessment based on exploration activities to date, the resources of the Quebrada Blanca copper mine have increased by approximately 6 million tons (amount of copper metal) since 2019.”
In a separate development, Chilean authorities are reportedly planning to impose harsh sanctions on those responsible for a large sinkhole near a copper mine.
The hole measuring 36.5m (120ft) in diameter emerged in late July and has grabbed the attention of local authorities and local and foreign media.
The Chilean mining regulator suspended the operations of a nearby mine owned by Canadian mining company Lundin, in the northern district of Candelaria.
Lundin owns 80% of the property, while the remaining stake is owned by Sumitomo Metal Mining and Sumitomo Corp.