:: US$870 Million for Chile Copper Project

The owners of the Escondida copper mine in northern Chile have announced approval of the US$870 million Escondida sulphide leach project in Chile. The project will produce 180,000 tonnes of copper cathode per annum for more than 25 years and is scheduled to begin production during the second half of 2006. BHP Billiton is the operator of the project and is contributing US$500 million, Rio Tinto is contributing US$261 million and other participants include Japan Escondida Corporation (owned beneficially by Mitsubishi Corporation, Mitsubishi Materials Corporation and Nippon Mining and Metals Company Ltd) with a 10 percent interest and International Finance Corporation, which holds 2.5 percent.

The project will utilise a bacterially-assisted leaching process on low-grade run-of-mine sulphide ore from the existing Escondida pit and the currently in-development Escondida Norte pit. The resulting solutions from the leaching will then be treated in solvent extraction and electro-winning plants to produce copper cathode.

BHP Billiton's President Base Metals Diego Hernandez said: Escondida has been stockpiling low-grade sulphide material since its inception and has been conducting studies on leaching this material since the mid 1990s. New technological developments allow us today to economically process this low-grade material, previously mined as waste. We are excited about this project and the prospects for further application of this technology at other BHP Billiton copper projects.

The total, combined sulphide leach ore reserve to be extracted from both the Escondida and Escondida Norte pits, is estimated at 1.134 billion tonnes at an average copper grade of 0.52 percent, contained within a copper cut-off grade range of 0.3 to 0.7 percent. These ore reserves are sub-divided into 249 million tonnes at 0.52 percent copper of proved reserve and 884 million tonnes at 0.52 percent copper of probable reserve.

Water supply will come from a 500 litre per second desalination plant to be constructed at the Escondida port-site of Coloso near Antofagasta, Chile. Water will be pumped to the Escondida mine facilities, 170km southeast of Antofagasta.