Chilean Company Plans to Develop New Iron Project

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Researched by Industrial Info Resources (Sugar Land, Texas)--Compania Minera del Pacifico (CMP) (La Serena, Chile) is scheduled to finish the scope study at its El Laco iron deposit by June 2008. Although the project is in an early stage, the company estimates that the project could cost no less than $300 million. The project involves the construction of a crushing and grinding circuit and a processing plant to produce 10 million tons per year of iron lump and iron fines for more than 15 years. The deposit contains identified resources of 320 million tons containing 61.9% of iron, but it has not been extensively mined in the past. Drilling continues in order to increase the resources.

El Laco is in the Chilean Iron Belt, a 600-kilometer area that comprises the Atacama and Coquimbo regions, with reserves of approximately 2 billion tons of iron. Particularly, the project is located in the Andean Mountains, at 4,500 meters above sea level and 125 kilometers southeast of the city of San Pedro de Atacama in the Antofagasta Region.

El Laco is just one of CMP's several projects that aim to increase iron production. In this regard, CMP recently finished constructing Phase I of its Hierro Atacama project worth $177 million and 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. The company is also in the process of approving Hierro Atacama Phase III, a $230 million project currently under study, involving the construction of an iron-pelletizing plant in Punta Totoralillo Seaport to produce 5 million tons per year of iron pellets. For more information, see related November 14, 2007, article - Construction of Hierro Atacama Iron Project in Chile Nears Completion.

As a consequence of more production and better prices, CMP's 2007 sales reached $291,775 million, an increase of 28.8% compared with 2006. CMP expects to produce 15 million tons of iron by 2010. 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, the leading producer of flat and long steel and iron ore in Chile, holding exploration and mining rights of most of the known iron ore deposits in Chile.

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