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Mining industry

Chilean Copper Mine Escondida Considers Molybdenum Production Amid Sky-High Prices

Strategic Insights

— 1 min read

Chilean copper mine Escondida, the world's largest privately held copper supplier, is exploring the possibility of producing molybdenum, a rare and valuable metal, after record-setting prices reached $32 per pound on international markets. Escondida's vice president of operations, Marcelo Villouta, revealed that the mine's majority shareholders, Anglo-Australian giants BHP Billiton and Rio Tinto, are assessing the feasibility of mining the steel additive. This move is part of a broader trend among Chilean copper producers to invest in molybdenum production, as the metal has become the country's second-largest export, after copper.

Key Takeaways:

  • Escondida, the world's largest privately held copper supplier, is considering producing molybdenum due to record-setting prices reaching $32 per pound on international markets.
  • The molybdenum project would require a $70-$80 million investment and a "pre-conceptual" study will be ready by the end of the year, according to Marcelo Villouta, Escondida's vice president of operations.
  • Chilean copper producers are stepping up investment in molybdenum production, with the metal becoming the country's second-largest export after copper.
  • Escondida is owned 57.5% by BHP Billiton, 30% by Rio Tinto, 10% by a Mitsubishi-led Japanese consortium, and 2.5% by the International Finance Corp.
  • Mining companies are taking advantage of high molybdenum prices, with several Andean nation mines finding the metal as a byproduct of copper production.

Statistics:

  • Escondida produced 313,983 metric tons of copper in the second quarter, down 3.3% from the same period a year earlier.
  • Molybdenum prices have reached a record high of $32 per pound on international markets.
  • The molybdenum project at Escondida would require a $70-$80 million investment.
  • Escondida is owned 57.5% by BHP Billiton and 30% by Rio Tinto, the majority shareholders.

Sources:

  • "Chilean copper mine mulls molybdenum production" by Valor Futuro, as referenced by Marcelo Villouta, vice president of operations at Escondida.
  • "Dow Jones Commodities News" via Comtex, dated October 24, 2005.
  • "Escondida mine's profile" on the official Escondida Mining Company website (http://www.escondida.cl).

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