Construction of Hierro Atacama Iron Project in Chile Nears Completion

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Researched by Industrial Info Resources (Sugar Land, Texas)--Chilean Compania Minera del Pacifico (CMP) (La Serena, Chile) is scheduled to finish construction of a magnetite plant and slurry pipeline by mid-December 2007, and will soon finish construction of a seaport at Punta Totoralillo, completing Phase I of the company's $177 million Hierro Atacama project.

The magnetite plant, being constructed by Salfa Construcciones S.A. (Santiago, Chile), is about 10 kilometers south of Copiapo, Chile. It will process copper tailings from the adjacent Candelaria mine, owned by Phelps Dodge, in order to extract iron ore and will produce 3 million tons per year of concentrate containing 68.5% iron. The plant's product will be transported through a 120-kilometer underground slurry pipeline from the magnetite plant to the Punta Totoralillo Seaport. The $56 million slurry pipeline is being engineering and constructed by Belfi S.A (Santiago, Chile). Hierro Atacama Phase I will represent an increase in the company's iron ore production capacity from 8.5 million tons per year to 11.5 million tons per year.

CMP also approved the $337 million Hierro Atacama Phase II project to develop the Cerro Negro Norte iron ore deposit to produce 4 million tons per year of pellet feed. Construction is scheduled to begin next year and is expected to be completed by 2010.This project will allow the company to reach an overall capacity of 15.5 million tons per year. The company is also likely to shortly approve Hierro Atacama Phase III, a $230 Million project currently under study, involving the construction of an iron-pelleting plant in Punta Totoralillo Seaport to produce 5 million tons per year of iron pellets. The pellet feed for this plant would come from Hierro Atacama Phases I and II.

CMP's 2006 sales reached 7.7 million tons of iron ore, 670,000 tons of limestone and 37,400 tons of manganese. About 80% of the company's production is exported, mainly to Asian markets, while 20% of its production is sold domestically. CMP is owned 99% by Compania Aceros del Pacifico (CAP), the leading producer of flat and long steel and iron ore in Chile.

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