April 7, 2010 / 8:11 PM / in 7 years

CRU/CESCO-UPDATE 1-Teck begins ramping up Andacollo output

* First concentrate shipment to occur in two weeks

* Also mulls concentrate project at Quebrada Blanca

By Euan Rocha

SANTIAGO, April 7 (Reuters) - Teck Resources TCKb.TO has begun to ramp up production from the copper concentrator project at its Carmen de Andacollo mine in Chile and expects its first concentrate shipment in two weeks, a top company executive said on Wednesday.

“The Andacollo expansion is operating now. Our target ramp-up is the end of the third quarter. Our first shipment of concentrate will leave the port of Coquimbo on April 20,” Roger Higgins, the head of Teck’s copper business, told Reuters along the sidelines of the Cesco/CRU conference in Santiago.

The Andacollo mine, located near the southern end of the Atacama Desert, is transitioning from copper cathode production to producing copper in concentrate, a move that will help quadruple copper production from the mine.

The new plant is expected to produce 80,000 tonnes of copper and 55,000 ounces of gold in concentrate annually over the first 10 years of the operation.

In January, Teck completed the sale of an interest in future gold production at Andacollo to Royal Gold (RGLD.O). Royal Gold will get 75 percent of the payable gold produced from the mine until total production reaches 910,000 ounces, and 50 percent thereafter.

Higgins said Teck is doing a prefeasibility study to look at the possibility of moving from cathode production to concentrate production at its Quebrada Blanca mine in northern Chile.

This move would raise copper output at Quebrada Blanca from about 80,000 tonnes a year to about 200,000 tonnes, Higgins said.

Higgins said this plan was still contingent on board approval. Construction, if approved, would likely not begin until 2012.

The conversion at Andacollo is expected to cost Teck about C$485 million, including the cost of a pipeline to secure water supply. (Reporting by Euan Rocha; editing by Jim Marshall)

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